Uncertain Harvest High Wheat Prices Could Mean Farmers Send Checks To Feds
Who says farmers are a drain on taxpayers? Farmers this year may be writing checks to the federal government.
In a strange twist of fate that comes in a critical year for the farm program, wheat prices have hit their highest point in two decades.
If that continues through October, the government could be excused from subsidizing farmers and might call back price-support payments it advanced earlier in the year.
In Washington, that amounts to $43 million.
“If the price stays up, there could be a chance of a refund, but it’s way too early to know for sure,” says Steve Hoag with the USDA’s Consolidated Farm Service Agency state office in Spokane.
The government has never sought a refund on wheat payments. It predicted earlier this year that farmers will need 75 cents a bushel in subsidies for the 1995 crop. Refunds on corn occurred in 1991 and barley in 1989.
Wheat payments are based on a five-month national market price, June through October. If the average price exceeds $4 a bushel, then subsidies are not paid.
The national wheat average for June was $3.85, but prices this month are close to $5.