Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana  
December  31,   1965
New Feed Grain, Wheat Certificate And
Cropland Adjustment Programs1
by  Paul  R.   Robbins,   Agricultural   Economics
The Food and Agriculture Act of
1965 will be in effect for the 1966-
69 crop years. It continues to extend
the Feed Grain Program and Wheat
Certificate Program in much the same
form as for 1965. In addition, it authorizes a new Cropland Adjustment
Program designed to retire land
from production on a semi-permanent
basis.
Feed Grain  Program
As in the past, those who participate must divert a minimum of 20
percent of the feed grain base to
conserving uses. Conserving crops or
uses will be required on any additional acres diverted for payment as
well as for minimum diversion. As in
prior years, participants must maintain their normal acreage (1959-60)
in soil conserving crops.
Some of the major changes in 1966
as compared to 1965:
• Yields for determining payments
will be projected at higher levels. In
1965 average Indiana corn yield on
which payments were based was 74.5
bushels, in 1966 it will be 89.8 bushels.
• No diversion payment will be
made for minimum 20 percent diversion, except for small acreages.
• Price support payments will be
higher than in 1965 but payments will
be limited to 50 percent of a farmer s
base acreage.
• Loan rate will be lowered but
total support will be increased.
Assistance in the interpretation of details of the programs was provided by
Robert Cullen and Robert Lowe, program
specialists of the State ASCS Office.
A producer with a feed grain base
of 25 or fewer acres may divert all
of his acreage and receive diversion
payments on all of it. On the first
20 percent diversion, these farmers
will be eligible for a payment at a
rate of 20 percent of the county sup
port rate applied to the diverted acres
on the basis of projected yield. On additional diversion, the rate will be at
50 percent of the county support rate.
Small farmers who divert less than
the maximum will be eligible for
price support payments and loans.
Table 1. The 1965 and 1966 Feed Grain Programs Compared for
Corn1
Year
Item
1965
1966
Loan rate
$1.05
$1.00
Price support payment
20 cents per  bushel  based
on   smaller   of   planted   or
permitted  acreage
30 cents per bushel based
on smaller of planted acreage   or  one-half  of  base
Total support
$1.25
$1.30
Yield for payment
(Indiana average)
74.5 bu.
89.8 bu.
Diversion payment:
First 20%
20%    X   total   support
X yield
None unless base is 25
acres or less
50% diversion
50%  X total support
X yield
50% X total support X
yield on diversion in ex-
cess of 20%
1 Changes made for grain sorghum and barley for 1966 as compared to 1965 are similar
to changes made for corn.
Table 2. Budgeted Returns from Participation in the 1966 Feed
Grain Program At Various Levels of Participation, Different Projected Yields and Various Price Levels
Projected
yield
assigned
to farm
Expected
yield
Returns abo
100 acres
ve variable
feed grain
costs
base
per
l
Expected
price
% of feed grain base c
0                            20
iverted:
50
90
90
90
100
100
100
100
100
100
100
100
100
$1.00
1.10
1.20
1.00
1.10
1.20
$5,950
6,950
7,950
5,950
6,950
7,950
$6,310
7,110
7,910
6,460
7,260
8,060
$6,580
7,080
7,580
6,925
7,425
7,925
1 This is total gross returns per 100 acres feed grain base from corn produced plus program payments plus $10 per acre net fertility credit for each acre diverted less variable
costs at $40.50 per acre at 100 bushel yield level for each acre of corn produced. Fixed
production costs for such as taxes, interest on land investment, machinery, depreciation
and labor have not been deducted.