Pressure mounts to pass farm bill

Soybeans, shallow loss, SCO

On irrigated soybeans…

“The reference price for soybeans isn’t particularly good (under PLC). Neither is the ARC payment. Soybeans don’t get much in these scenarios, but that reflects that baseline market price projections are relatively stronger.”

On shallow loss…

“These numbers show that shallow loss is really not a serious problem for soybeans.

“However, shallow loss is an important problem for rice. Rice prices are made overseas and they’re volatile.

“Having a price guarantee is important for rice farmers because there is not an attractive crop insurance product that can provide stability on the revenue side and deal with the cost uncertainty of rice farming.”

On the SCO potential to impact the Mid-South…

“It looks to me that SCO makes sense for rice producers.

“Under the House farm bill if you’re enrolled in RLC, however one isn’t qualified for SCO. That’s another knock against enrolling in the county RLC program and provides more incentive to enroll in the PLC program.

“Fortunately, in the House bill, you have the discretion by commodity, by crop, to enroll in either the PLC or RLC.

“For Arkansas, the House (options) provide a much better safety net mechanism. When market price is above $14, most producers are going to be comfortable covering costs.

“Rice farmers will begin to get into financial trouble when prices drop below $14, though. That’s particularly true when $90 per acre of direct payments have been removed.

“Bankers are very concerned about this and they understand that the PLC is not a certainty.”