Would You Grow Grain Sorghum for $3.95/Bushel Guaranteed—Under the PLC provision of the farm bill, that is the reference price or true floor price despite any market gains made above $3.95. In other words, if you sell grain for $4/bushel and the average received price for grain is below $3.95 (average national price received today is around $2.90/bushel), you still receive the difference between the average national price and the $3.95 reference price. Today we estimate that number to be $1.05 per bushel in PLC payments on your FSA sorghum PLC production number. You must have signed up for the PLC coverage with your base acres provision, which will adjust to 85% of base, and are only covered under those base acres. In addition, generic (cotton) base acres, can also be planted in sorghum and receive the same payment scenario. PLC payments also count toward your payment limitations as well.
Example using 200 acres:
Sorghum Base 100 acres
Generic Base 100 acres
Sorghum PLC Yield 70 bu/ac
Estimated PLC payment $1.05 WASDE estimate
Planted Sorghum acres 100
Planted Generic Acres 100
Effective Sorghum Base 200
Payment Base (85%) 170
Total Sorghum Payment $12,495 (170 x 70 x $1.05)
Payment per acre $62
Balancing Act—The 85th Texas Legislature convened on Tuesday January 10. Although the House and Senate are still months away from passing any legislation, both chambers did release their respective budget proposals this week. The budgets – aligned in many areas, yet disparate in certain key matters – will set the stage for contentious discussions over the state’s fiscal responsibilities as this session progresses. The House’s proposal calls for $221.3 billion in spending over the next biennium, about $8 billion more than its Senate companion ($213.4 billion). Greater commitments to education and health and human services, two of the most discussed issues during the interim, constitute roughly $5 billion of that $8 billion difference. The other burning issue from the interim – the Child Protective Services crisis – received comparable funding increase proposals from both chambers. Last week, Comptroller Glenn Hegar released a revenue estimate projecting that the state would have $104.9 billion available in general revenue over the biennium. The remaining $100 billion or so comes from federal funds and other sources that state lawmakers have less control over than they do the general revenue funds. The Senate’s budget authorizes spending $103.6 billion of that $104.9 billion, whereas the House calls for $108.9, or $4 billion more than what is estimated to be available. How the House intends to fund their budget is yet to be determined. Legislators have already begun discussing the prospect of tapping into the state’s Economic Stabilization Fund (aka the “Rainy Day Fund”) to cover the spillover. The ESF is projected to hold $11.9 billion by the end of the biennium. The Texas Legislature is constitutionally tasked with only one objective each session: pass a balanced budget. Stay tuned to this newsletter and announcements from TGSA as to how the negotiations in Austin over the next four months will affect you and your community.
Upcoming Feed Grains Marketing Workshop—The feed grains workshop, co-sponsored by the Plains Land Bank and Capital Farm Credit, will be from 9 a.m. to 4 p.m. January 25 and 26, at the Amarillo Texas A&M AgriLife Research and Extension Center. The registration fee is $125, which covers the cost associated with instruction, breaks, meals and materials. The course is limited to 50 participants. To register and pay for this course, go to: https://agriliferegister.tamu.edu/Grain. All registrations must be completed by Jan. 23, either online or by phone. Dr. Steve Amosson, Texas A&M AgriLife Extension Service economist in Amarillo, and Dr. Mark Welch, AgriLife Extension grain marketing specialist in College Station, will be the primary instructors during the workshop, which will dissect the feed–grain market and analyze each of its components. Click here for more information.
Grain Indemnity Fund Fails—TDA recently announced Texas grain producers have voted against the establishment of a producer assessment to self-insure against financial risks associated with selling or storing grain. TDA certified all the ballots, and the final results were 148 in favor of establishing the fund and 665 against. A total of 813 valid ballots were cast.
Trump Nominates Sonny Perdue for Agriculture Secretary—President Trump is nominating former Georgia Governor Sonny Perdue as the next Secretary of Agriculture, according to Trump’s incoming press secretary. Perdue is an original member of Trump’s Agricultural Advisory Committee. He grew up on a row crop farm in central Georgia and, following his stint as Governor, started an Atlanta-based export facilitation venture.
Market Perspectives—Sorghum: Net sales of 14,900 MT were up noticeably from the previous week, but down 84 percent from the prior 4-week average. Increases were reported for Japan (10,000 MT), China (6,800 MT, including decreases of 2,400 MT), and Indonesia (100 MT). Reductions were reported for unknown destinations (2,000 MT). Exports of 180,500 MT were up noticeably from the previous week and up 31 percent from the prior 4-week average. The destinations were China (179,800 MT) and Indonesia (700 MT).