U.S. farmers will likely receive the highest government aid in a decade due to the surplus of crops accompanied by low commodity prices.
The U.S. Department of Agriculture (USDA) estimates about $13.9 billion of net farm income this year will be federal payments, or about 25 percent of total profit estimated at $54.8 billion. That is the largest payout since 2006.
“This is a sign of a weak farm economy that is much weaker than even a couple years ago,” Patrick Westhoff, director of the Food & Agricultural Policy Research Institute at the University of Missouri in Columbia, told Bloomberg.
Farmers are expected to lose money on every acre of corn and soybeans that they plant this season, according to Bloomberg. Those crops are the biggest in the U.S. so that puts a larger burden on government safety nets for agriculture.
Corn is the most valuable crop in the U.S. And, according to experts, the price of corn will be the deciding factor on whether the government’s percentage of farm income increases or declines in the future.
Corn will average $3.60 and $3.75 a bushel until 2025, according to USDA estimates. If corn stays above the USDA’s forecast, payments may remain similar to what they would have been under previous farm programs.
Should they plunge near $3, “you would see the cost rise dramatically,” Vincent Smith, an agricultural economist at Montana State University in Bozeman, told Bloomberg. “That’s the snake in the woodpile.”