Northern Plains – Wheat, Barley
and Minor Oilseeds
2014 Farm Bill Education Conference
Kansas City, MO
September 3, 2014
Dwight Aakre
Farm Management Specialist
The Northern Plains – Then and Now
• Historically
– Wheat was the dominant crop, therefore high wheat base
– Produced a major share of the U.S. barley crop
– Very little precipitation from mid July through August
• Currently
– Average annual precipitation has increased 20% in the
last 20 years
– Much of this increase coming in July and August
– Increased disease pressure and difficult harvest
conditions for small grain
– Improved environment for corn and soybeans
State Average Counter-Cyclical
Payment Yields, North Dakota
Wheat
29.7 bu
Barley
43.6 bu
Soybeans
30.4 bu
Corn
81.0 bu
Sunflowers 1151 lbs
Canola
1097 lbs
Oats
44.6 bu
Flaxseed
13.2 bu
State Averages, North Dakota
Crop
Wheat
Barley
Sunflowers
Canola
Flax
Soybeans
Corn
Current C-C
Yield
90% of
2008-12
Average
Change
29.7
43.6
35.8
49.9
+21%
+14%
1151
1097.5
1348
1426
+17%
+30%
13.2
30.4
81
17.5
27.9
107.6
+33%
-8%
+33%
Payment Yield Update
Farm’s current CC wheat yield: 32bu
2008
Zero
Plant
2009
Zero
Plant
2010
90bu
2011
Zero
Plant
2012
Zero
Plant
Average PLC Yield
Yield
(90%)
Will this impact reallocation of base?
Will this impact ARC vs PLC decision?
90bu
81bu
Existing Crop Base as a Percent of
Total Base Acres, North Dakota
Wheat
64%
Barley
12%
Soybeans
7%
Corn
6%
Sunflowers 5%
Canola
3%
Oats
2%
Flaxseed
1%
2009-2012 Average Planted and Prevented
Planted as a Percent of Total Covered
Commodities
Wheat
44%
Barley
4%
Soybeans
22%
Corn
14%
Sunflowers 5%
Canola
6%
Oats
1%
Flaxseed
2%
Base Reallocation Strategies
1. Safety Net
2. Maximum Payments
Enter Existing Base Acres, and Planted and Prevented Planted (PP) Acres, 2009-2012*
Crop
Wheat
Soybean
Corn
Barley
Oats
Flax
Canola
Sunflower
Dry Peas
Lentils
Safflower
Mustard
Lg.Ckpea
Sm.Ckpea
Total Acres
Existing
2009
2010
Base Ac. Planted
PP
Planted
PP
378.9
70.0
34.5
56.7
653.5
74.1
28.0
435.6
21.4
41.2
28
2011
Planted
PP
178.7
114.0
252.8
214.0
16.0
2012
Planted
PP
211.4
61.0
192.8
65.0
196.5
526.2
832.1
725.1
775.5
465.2
2009-2012 Base Real-
Avg
location
79.0
59.4
217.4
163.5
232.0
174.5
48.2
36.3
16.3
12.3
57.5
43.3
49.1
36.9
699.5
526.2
*You ma y ei ther keep your exi s ting (ol d) ba s e a cres or rea l l oca te your ba s e. The ba s e rea l l oca tion formul a for ea ch crop i s i ts 2009-2012
a vera ge a crea ge di vi ded by the total 2009-2012 a vera ge a crea ge of a l l progra m crops mul tipl i ed by the total exi s ting (ol d) ba s e a cres .
Ba s e rea l l oca tion ma y cha nge Indi vi dua l crop ba s e a cres but not total FSA fa rm ba s e a cres .
ANALYSIS SUMMARY.Reallocation of base acres is the best option, assuming your projected yields and prices*
Crop
Wheat
Soybean
Corn
Barley
Oats
Flax
Canola
Sunflower
Dry Peas
Lentils
Safflower
Mustard
Lg.Ckpea
Sm.Ckpea
Totals
Old
Base
378.9
56.7
21.4
41.2
28.0
526.2
EXISTING BASE
REALLOCATION OF BASE
2014 Pmt
Total 2014-2018 Pmt Base
2014 Pmt
Total 2014-2018 Pmt
Program Amount Program Amount Realloca. Program Amount Program Amount
59.4
ARC
556
ARC
1,759
163.5
ARC
1,604
ARC
5,071
174.5
ARC
9,468
ARC
24,284
36.3
PLC
401
PLC
2,006
PLC
408
PLC
2,042
PLC
306
PLC
1,530
12.3
43.3
36.9
1,271
5,331
526.2
11,474
31,361
*Hi gher of ARC or PLC pa yment i s s el ected by crop. It i s a s s umed tha t a nnua l FAV pl a ntings do not exceed non-ba s e + 15% of ba s e a cres .
Marketing Year Average Prices
All Wheat
All Barley
All
Sunflower
2013
6.87
6.06
21.70
20.60
13.70
4.45
13.00
2012
7.77
6.43
25.40
26.50
13.60
7.20
14.30
2011
7.24
5.35
29.10
24.00
13.90
6.22
12.50
2010
5.70
3.86
23.30
19.30
12.20
5.18
11.30
2009
4.87
4.66
15.10
16.20
8.15
3.55
9.59
2008
6.78
5.37
21.80
18.70
12.70
4.06
9.97
2007
6.48
4.02
21.70
18.30
13.00
4.20
10.10
2006
4.26
2.85
14.50
11.90
5.80
3.04
6.43
2005
3.42
2.53
12.10
9.62
5.94
2.00
5.66
2004
3.40
2.48
13.70
10.70
8.07
2.06
5.74
Canola
Flax
Corn
Soybean
Marketing Year Average Barley Price
All Barley
Feed Barley
Malting Barley
2012
$6.43
$5.62
$6.58
2011
$5.35
$4.91
$5.44
2010
$3.86
$3.22
$4.05
2009
$4.66
$2.61
$5.02
2008
$5.37
$3.82
$5.71
2007
$4.02
$4.35
$3.87
Wheat – Walsh County
Estimated Payment per Acre
Prices
Stable
Stable
Rising*
Declining*
6.30
6.30
6.30
6.30
7.00
6.30
Rising*
Declining*
ARC
PLC
ARC
PLC
ARC
PLC
2014
-0-
-0-
-0-
-0-
-0-
-0-
6.20
2015
-0-
-0-
-0-
-0-
-0-
-0-
7.50
6.00
2016
-0-
-0-
-0-
-0-
1.54
-0-
6.30
8.15
5.75
2017
-0-
-0-
-0-
-0-
2.36
-0-
6.30
8.50
5.30
2018
-0-
-0-
-0-
-0-
-0-
7.31
*Price estimates provided by Frayne Olson, NDSU crops economist.
Barley – Bottineau County
Estimated Payment per Acre
Prices
Stable
Stable
Rising*
Declining*
4.75
4.75
4.75
4.75
4.75
4.75
Rising*
Declining*
ARC
PLC
ARC
PLC
ARC
PLC
2014
-0-
9.52
-0-
9.52
-0-
9.52
3.95
2015
-0-
9.52
-0-
9.52
29.63 47.60
5.30
3.75
2016
-0-
9.52
-0-
-0-
29.35 57.12
4.75
5.50
3.55
2017
-0-
9.52
-0-
-0-
28.83 66.64
4.75
5.60
3.05
2018
-0-
9.52
-0-
-0-
26.93 90.44
*Price estimates provided by Frayne Olson, NDSU crops economist.
Canola – Cavalier County
Estimated Payment per Acre
Prices
Stable
Stable
Rising*
Declining*
18.60
18.60
18.60
18.60
20.00
18.60
Rising*
Declining*
ARC
PLC
ARC
PLC
ARC
PLC
2014
2.99
21.84
2.99
21.84
2.99
21.84
18.00
2015
1.10
21.84
-0-
2.11
10.40 30.30
21.50
17.00
2016
-0-
21.84
-0-
-0-
18.93 44.39
18.60
22.50
16.00
2017
-0-
21.84
-0-
-0-
22.62 58.49
18.60
23.50
13.75
2018
-0-
21.84
-0-
-0-
31.26 90.20
*Price estimates provided by Frayne Olson, NDSU crops economist.
Sunflower – Emmons County
Estimated Payment per Acre
Prices
Stable
Stable
Rising*
Declining*
20.90
20.90
20.90
20.90
22.00
20.90
ARC
Rising*
Declining*
PLC
ARC
PLC
ARC
PLC
2014 31.85
-0-
31.85
-0-
31.85
-0-
20.00
2015 26.96
-0-
15.22
-0-
29.08
1.91
23.50
19.00
2016
7.38
-0-
-0-
-0-
26.80 14.65
20.90
24.00
18.00
2017
-0-
-0-
-0-
-0-
20.90
25.00
15.25
2018
-0-
-0-
-0-
-0-
*Price estimates provided by Frayne Olson, NDSU crops economist.
-0-
27.39
21.78 62.43
Flax – Ward County
Estimated Payment per Acre
Prices
Stable
Stable
Rising*
Declining*
11.26
9.90
11.26
11.26
10.40
11.26
Rising*
Declining*
ARC
PLC
ARC
PLC
ARC
PLC
2014
6.94
0.31
6.94
0.31
6.94
0.31
11.00
2015
-0-
0.31
-0-
-0-
3.84
4.28
11.25
10.25
2016
-0-
0.31
-0-
-0-
9.85
15.76
11.26
11.75
9.70
2017
-0-
0.31
-0-
-0-
12.45 24.17
11.26
12.25
8.25
2018
-0-
0.31
-0-
-0-
20.13 46.36
*Price estimates provided by Frayne Olson, NDSU crops economist.
Corn – Barnes County
Estimated Payment per Acre
Prices
Stable
Stable
Rising*
Declining*
3.90
3.90
3.90
3.90
4.70
3.90
ARC
Rising*
Declining*
PLC
ARC
PLC
ARC
PLC
2014 51.52
-0-
51.52
-0-
51.52
-0-
3.80
2015 52.91
-0-
-0-
-0-
52.91
-0-
4.80
3.60
2016 19.16
-0-
-0-
-0-
47.71
9.86
3.90
4.95
3.40
2017
-0-
-0-
-0-
-0-
8.32
29.58
3.90
5.50
2.90
2018
-0-
-0-
-0-
-0-
36.91 78.88
*Price estimates provided by Frayne Olson, NDSU crops economist.
Soybeans – Stutsman County
Estimated Payment per Acre
Prices
Stable
Stable
Rising*
Declining*
10.35
10.35
10.35
2014
10.35
11.00
10.35
Rising*
Declining*
ARC
PLC
ARC
PLC
ARC
PLC
0.67
-0-
0.67
-0-
0.67
-0-
10.00
2015 10.54
-0-
-0-
-0-
19.46
-0-
11.90
9.40
2016
-0-
-0-
-0-
-0-
17.12
-0-
10.35
12.50
8.90
2017
-0-
-0-
-0-
-0-
16.91
-0-
10.35
13.00
7.60
2018
-0-
-0-
-0-
-0-
23.75 20.40
*Price estimates provided by Frayne Olson, NDSU crops economist.
Estimated Increase in Payment Per Acre
from Re-Allocation of Base Acres with
Alternative Price Projections, 2014-2018
Price Trend
Farm/Crop
Stable
Increasing
Decreasing
Wheat
$16
$5
$28
Barley
$7
$10
$15
Canola
$20
$3
$9
Sunflower
$6
$4
$14
Flax
$3
$1
($1)
Corn
$19
$6
$25
Soybean
$16
$5
$21
Conclusions
Base re-allocation will have the greatest
impact on potential payments
Base re-allocation and yield update are the
landowners decision
Yield update will be significant for most crops
Wheat and barley base acres will decline
The change from “feed” barley to “all” barley
significantly reduces potential payments for
barley