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Cash Flows Tight on Many Grain Farms Because of Reduced Government Payments

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After four years of low grain prices, this summer’s price upswing has been welcomed by producers. However, higher prices may not completely offset lower revenue caused by lower yields as a result of adverse weather conditions. In addition, higher grain prices will reduce the amount of farm program payments. There will be little, if any, loan deficiency and counter cyclical payments this fall. In addition, the new farm bill does not contain provisions for market loss assistance and oilseed payments that have been paid out the past few years. These payments came about due to additional legislative action in response to low market prices.

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