Nebraska farmers are receiving help for last year’s low commodity prices.
Those who enrolled in safety-net programs in the state will split $645 million from the USDA Farm Service Agency.
Dan Steinkruger, Nebraska FSA executive director, says the large payout is due to the steep decline in prices.
“There are several factors (for the decline),” Steinkruger tells Nebraska Radio Network. “We did see some expansion in crop production in those years when we had high commodity prices. We’ve seen an increase in the value of the dollar, which impacts exports. Then there’s just a large crop that we’ve harvested the last two or three years, so we have just a large domestic supply right now.”
There are approximately 85,000 Nebraska farms enrolled in the safety-net programs, known as Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC).
Along with crop insurance, these are designed to protect against unexpected drops in crop prices or revenues due to market downturns.
“Right now, our commodity prices are below the cost of production, and have been since at least 2015,” Steinkruger says. “So, on a per acre basis, most of our farmers are operating at a loss.”
The earmark for Nebraska averages roughly $7,500 per farmer.
Steinkruger says it will take a large event to increase demand and improve prices.
“Whether that’s weather related, whether we see over the long haul an increase in exports, an increase in commodities for ethanol use, or perhaps a combination of those factors,” he says.