News

Study finds potential solution for timelier commodity program payments

An ag economist says a multiyear risk program (MYR) could offer farmers a timelier method for delivery of commodity program payments than the current ARC/PLC programs.

Carl Zulauf, a professor emeritus at Ohio State University, co-authored a study that suggests shifting payments to the beginning of the year.

“It really does help to have the payments sooner rather than later because it gives the managers, in this case farmers, more of a flexibility to adjust their particular situation to the change in the macro or market situation,” he says.

No sizeable payments are expected until fall of 2026. Zulauf tells Brownfield the study proposes using futures prices for crop insurance.

“Over time, futures and cash prices are pretty integrated, so I wouldn’t expect a big difference,” he says.

But he says that could vary from year to year.

“I would be surprised if it’s a huge difference, but there could be some difference because futures prices are related to but not the same as the marketing year average price,” he says.

Zulauf says the concept has been utilized at least three times in the U.S. since 1980.

The study was co-authored by the Department of Agricultural and Consumer Economics at the University of Illinois.

AUDIO: Carl Zulauf, Ohio State University