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NW Indiana | First off I hate the idea of MFP at all, stated that weeks ago. But it isn't my choice, however it should be fair and not distort markets. EPIC FAIL
So here is the wording "will receive a payment based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019. Those per acre payments are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions. Moreover, total payment-eligible plantings cannot exceed total 2018 plantings."
So in an effort to not influence planting rotations they decided to say "total planting to those crops in aggregate in 2019". So basically plant whatever of the list and you get paid. Ok fair enough but first it appears you have to plant. Lets look at that closer
First off Jon Gruden and others that say "getting paid to not plant" lets ask why do we have PP?? Imo it is two fold, first in an effort to insure growers are willing to risk planting all the acres we typically do, it is a safety net. Lots of acres are planted that every few years take PP so on an average they increase supply a bunch. Also it insures a better quality product. Typically late planted crops tend to be lower in test weight if they can't mature properly. If we had a ton of low quality product that would impact the value of all the product(reference the 2009 event) which means even YOURS
So those not upset that PP acres aren't included in the mfp payment lets look at that a couple different ways. First how about your neighbor a couple miles down the road that didn't get the same rain and maybe different soil was able to plant, you aren't. How do you feel about him getting a big check and you don't? His financial position maybe helped allowing them to compete that much more, maybe buy a farm you wanted, rent more acres etc. He rolls into the coffee shop this winter with a new pickup, meanwhile you are dreading seeing your banker.
Second this payment structure basically has incentivized making sure you plant. Bean prices so low that really even with the payment I think for most PP corn will still be about equivalent or better. So now we have a large per acre payment incentive to keep planting corn(20-70 per acre depending on location would be my guess). Why should every farmer be pissed?? Because we are going to keep planting corn. Imo this move just knocked 20-30 cents off our potential corn market prices FOR ALL OF US. Unless mother nature just simply doesn't allow it we are going to get more corn planted then what most are thinking, the carrot was just dangled.
In one announcement my targets just went down, maybe you disagree but how you can't expect those that feel that way to be pissed is beyond me.
PP corn acres aren't going to be near as high as many think, Boone-Conan you got what you asked for.
Frogman- to respond to your question I personally am going by the usda reports and then trying to anticipate the usda reports. They are the house and all that matters
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Why the MFP annoucement is negative corn
