Posted 3/26/2020 10:41 (#8140131 - in reply to #8139954) Subject: RE: How to calculate MFP price?
Crete - 3/26/2020 08:29
It's not for last year tho. It's monthly for 2020.
Feb 5 area is $1.18 and change.
I honestly havent seen how they are going to do it for cattle, and i dont want to sound like a broken record on comparing it to grain mfp cause maybe it will be administered in a different way... but the reason they based the mfp off of previous years production instead of current is so it had a smaller impact on supply and demand. I believe the phrase the usda used at the time was "we dont want to distort market signals".
Yes, this negatively affected the guy that added land to the extent that you can be negatively affected getting subsidy dollars. If they admin it the same way on cattle as they did on grains, the guy feeding more cattle this year will not get the full amount of support on his this year production... unless they did it again next year.
And i know, you hear them saying "1 time payment"... well they said that in the grains too... then after a farmer gets 4-5 of them, well you see how they get to relying on them. Actually, i dont know that its so much the farmer relys on them as much as it is that the market signal to produce less is muted to the producer.
This is all classic american agriculture. Everyone is a republican till its their turn to go broke. There are economic forces at play that create consolidation pressure, there are human nature forces at play that dont want consolidation. This leads to government intervention and over the decades american competitiveness erodes.