Surprise: According to a USDA report, the farm bill could end up costing way more than it’s supposed to

posted at 7:21 pm on February 13, 2014 by Erika Johnsen

This farm bill is new and improved!, they said. Congress finally came together and achieved something on a bipartisan basis!, they said. This new bill replaces old agricultural payout programs with new ones that, if all goes as planned, could save some big bucks!, they said.

Too bad it took about five seconds for things to stop going as planned.

As I mentioned the other day, corn prices have been dropping (and will sink even lower if the EPA decides to move forward with their proposal to relent on the ever-increasing ethanol requirements of the Renewable Fuel Standard — fingers crossed), and Politico reports on some new economic projections released by the USDA today that, if they prove correct, have the potential to hike up the supposed price tag of the farm bill. Unexpectedly.

New economic projections released by the Agriculture Department Thursday carry a sober warning of what lower corn prices could mean for the cost of the new farm bill over the next few years.

For the 2014-2015 marketing year beginning Sept. 1, the report projects a seasonal average farm price of just $3.65 per bushel of corn–compared to $4.50 for the current year. In 2015-2016, the price drops further to $3.30 per bushel before beginning a slow but steady climb back up to $4.10-$4.20 per bushel by 2023 and 2024.

That’s a much steeper decline than many had expected and well below the corn prices assumed by the Congressional Budget Office in scoring the new farm bill.

Just a year ago, the department was forecasting about $1 more per bushel for corn in the same 2015-2017 period. If the revised projections prove accurate, it will surely impact the cost of new counter-cyclical programs signed into law last week by President Barack Obama.

Read the rest of the Politico article for more details, but the point is that the CBO (as ever) scored the farm bill off of a set of assumptions that could really end up swinging any which way, by a little or by a heck of a lot — and that Congress not only largely created a lot of this mess in the first place with the Renewable Fuel Standard, but is ready and waiting to catch agribusiness with all manner of subsidies when it subsequently falls.

Only the federal government, through their ever-august and well-meaning largesse, could accomplish such an exquisitely tangled and entrenched web of self-inflicted artificial market signals and costly taxpayer losses.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

bishop?

307wolverine on February 13, 2014 at 7:26 PM

So???

rik on February 13, 2014 at 7:29 PM

Wait. Was the Agricultural Act of 2014 a comprehensive farm bill?

de rigueur on February 13, 2014 at 7:30 PM

Personally, I prefer my water laced with MTBE and my engine ruined from ethanol. But, that’s because I trust the party of science.

/s

xNavigator on February 13, 2014 at 7:30 PM

Is there anyone on this site that can give me an example of any federal government activity that costs less than budgeted or expected?

Franklin100 on February 13, 2014 at 7:32 PM

It’s a great day in the life of a noob when he nabs his first Bishop. My life is now complete.

307wolverine on February 13, 2014 at 7:34 PM

I have family in the farming business. Right now they do not farm much because it is easier to rent their land to lawyers and doctors from the city so that the lawyers and doctors can collect crop insurance from the government if prices go down or the weather is not right. Third party outsourced labor working for an investment partnership does the farming.

percysunshine on February 13, 2014 at 7:35 PM

Grass is green.

bgibbs1000 on February 13, 2014 at 7:36 PM

It’s a great day in the life of a noob when he nabs his first Bishop. My life is now complete.

307wolverine on February 13, 2014 at 7:34 PM

Congrats. Don’t know if Bishop still makes night calls on Bishop! claimants, but best tug your forelock if he does.

de rigueur on February 13, 2014 at 7:39 PM

R.G. Tugwell’s hand reaches up from the grave, like Carrie’s.

Akzed on February 13, 2014 at 7:47 PM

Big Ag is farming the federal government.

Perhaps we can ask them to use some pesticide, while they are at it.

ajacksonian on February 13, 2014 at 7:49 PM

Why in the H…do we even have farm bills anymore? Answer: pork, votes, corruption, crony capitalism. Answered me own question.

vnvet on February 13, 2014 at 7:55 PM

This farm bill is new and improved!, they said. Congress finally came together and achieved something on a bipartisan basis!, they said. This new bill replaces old agricultural payout programs with new ones that, if all goes as planned, could save some big bucks!, they said.

Too bad it took about five seconds for things to stop going as planned.

Point of order – this is going exactly as planned.

Steve Eggleston on February 13, 2014 at 7:56 PM

Unfortunately, most Republicans talk like budget hawks while campaigning.

bw222 on February 13, 2014 at 8:06 PM

“USDA report, the farm bill could end up costing way more than it’s supposed to”

Crooked legislators have lied to you and cheated you.What a surprise! And yet we always act like it’s the first time.

MaiDee on February 13, 2014 at 8:08 PM

…surprised?

KOOLAID2 on February 13, 2014 at 8:22 PM

I’m surprise proof
shock proof
right about now
I could use some 80 proof
(and I don’t drink hard stuff)

31giddyup on February 13, 2014 at 8:23 PM

farm bill could end up costing way more than it’s supposed to ??!!??!! HELL YOU SAY ! Surely there’s been a mistake in calculations.

lel2007 on February 13, 2014 at 8:27 PM

Do any of those inept fools have any idea what they are doing?

rplat on February 13, 2014 at 8:29 PM

I’m so surprised you could knock me over with a sixteen ton weight.

rbj on February 13, 2014 at 8:33 PM

Point of order – this is going exactly as planned.

Steve Eggleston on February 13, 2014 at 7:56 PM

And that is exactly the problem with DC…

…we really don’t have a split government. The bulk of the argument is over how fast to get there, not the path to take.

Athos on February 13, 2014 at 8:40 PM

Only the federal government, through their ever-august and well-meaning largesse, could accomplish such an exquisitely tangled and entrenched web of self-inflicted artificial market signals and costly taxpayer losses.

If only FDR had adopted the same attitude Grover Cleveland had.

Can anyone explain to me how, as unconstitutional as these subsidies are, they are still being employed? One would think that, after 80 years, the initial reason (other than preserving Democrat power and votes) would’ve long expired.

Newtie and the Beauty on February 13, 2014 at 8:40 PM

307wolverine on February 13, 2014 at 7:26 PM

Well done, Wolverine! Well done, indeed!

[tips fedora]

Newtie and the Beauty on February 13, 2014 at 8:41 PM

Is there anyone on this site that can give me an example of any federal government activity that costs less than budgeted or expected?

Franklin100 on February 13, 2014 at 7:32 PM

Military pensions.

M240H on February 13, 2014 at 8:45 PM

It’s a great day in the life of a noob when he nabs his first Bishop. My life is now complete.
307wolverine on February 13, 2014 at 7:34 PM

OK, I’m a jealous newbie, but congrats none the less.

AppraisHer on February 13, 2014 at 9:21 PM

Wait. Was the Agricultural Act of 2014 a comprehensive farm bill?
de rigueur on February 13, 2014 at 7:30 PM

More like an incomprehensible farm bill.

LegendHasIt on February 13, 2014 at 9:48 PM

Who woulda thunk it?
It’s a sad thing that bureaucrats in Washington don’t actually have to apply their knowledge in a way that the results justify earning a paycheck, or not.

bobthm3 on February 13, 2014 at 10:12 PM

Surprise, huh? (We really need a sarcasm font.)

Government is referred to as a service operation, and when Congress passes a bill you know that, once again, you are about to be serviced. This becomes even more clear when the title of the Bill includes the word “comprehensive.” If there is one thing that Congress does well, it is to avoid reading anything more than half a page long, or with the word comprehensive at the top of the page. You can bet the mortgage on the fact that in that tome lies an almost unfathomable amount of bovine excretion.

Have any of you ever seen a Congressman of Congresswoman blush? I never have. I do believe they have lost their ability to be embarrassed.

TKPedersen42 on February 14, 2014 at 11:07 AM