Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana    
December 29, 1967
THE 1968 FEED GRAIN PROGRAM
Pawl R. Robbins, Agricultural Economics
IHE USDA HAS SET A TARGET to divert at least 30 million
feed grain acres in 1968. This will
be about 10 million more than
were diverted in 1967.
Major Provisions of the 1968
Feed Grain Program
1. Price support loan levels
(national average) under the 1968
program will be at the 1967 level:
for corn, $1.05 per bushel; sorghum, $1.61 per hundredweight;
barley, 90 cents; oats, 63 cents and
rye $1.02 a bushel.
2. Price support payments will
continue at 30 cents per bushel
for corn and 53 cents per Cwt. for
sorghum, based on planted acreage up to one-half the farm feed
grain base acres times projected
yield.
3. Required acreage diversion
to conserving use to qualify for
price support loans and payments
is continued at 20 percent of a
farmer's base acreage of corn and
sorghums. No diversion payments
will be made for this minimum
20 percent diversion, except for
small farm acreages—the same as
in 1966 and 1967.
4. Additional acreage diversion
will be possible up to a total of
50 percent of the base or 25 acres,
whichever is larger, the same as
in 1966. The acreage diversion
payment rate will be at 45 percent
of the total price support times
the projected yield.
5. Small farms with a base of
25 acres or less, as in 1966 and
1967, will get payment on the first
20 percent acreage diversion at
20  percent  of  the  total  support
* Assistance in the interpretation of
details of the program was provided
by program specialists of the State
ASC office.
rate times projected yield, and at
the regular 45 percent payment
rate on the remaining acreage diverted to a conserving use. This
will be accomplished by applying
the 45-percent rate to the intended diversion minus 11.1 percent of the farmer's base.
6. Conserving base features
will continue in 1968 the same as
in 1966 and 1967.
7. Substitution provisions relating to wheat and feed grain
acreage will be continued. Substitution of feed grains for wheat
will reduce the acres eligible for
diversion payments, acre for acre,
until reduced to zero.   Generally
if a producer plans to substitute
feed grains for wheat, it will be
to his advantage to sign only for
the minimum 20-percent diversion.
8. Signup for participation in
the 1968 Feed Grain Program
will take place during February
and March.
See your county ASC Committee for program details.
Budgeting Your Farm Situation
What costs can be saved if you
decide to participate? Some of
your costs are already fixed for
1968. Taxes and interest on land
as well as depreciation, interest,
Table  1.     Budgeted returns above variable costs for selected crops at
various yield levels.
Assumed
Income
Assumed
harvest
Gross
Variable
above
yield
price
return
costs
variable
per
per bu.
per
per
costs per
Crop
acre
or ton3
acre
acreb
acre8
Corn
85
$1.00
$ 85
$ 38
$ 47
Corn
100
1.00
100
43
57
Corn
115
1.00
115
46
69
Soybeans
25
2.45
61
24
37
Soybeans
30
2.45
74
26
48
Soybeans
35
2.45
86
28
58
Wheat
40
1.30
52"
22
30"
Wheat
55
1.30
72''
27
45"
Oats
50
.65
33
18
15
Oats
70
.65
45
21
24
Meadow
M/2 hay,
Vi
pasture)
3.4
C
51
23
28
Meadow
(Vi hay,
I 2
pasture)
4.0
If
60
28
32
Meadow
(V2 hay,
\l
pasture)
4.6
r
69
33
36
a This is assumed harvest time price at the farm. If storage facilities are available and crops
are to be stored either for feeding or for sale, it is suggested that you increase crop prices as
follows:   corn  4-   lOtf, soybeans  +   15<f, oats 4-  5<? per bushel, and hay 4-  $1.00 per ton.
I) Variable costs include fertilizer, limestone, seed, weed and insect control chemicals, labor at
$2.00 per hour, fuel, oil, grease, and machinery repair. For a detailed breakdown of crop costs
and returns, see Purdue Publication   ID-68.
c Assumes pasture at $7 per ton of hay equivalent which approximates rental rates. Harvest
prices of hay was computed at $21 per ton. Meadow also was given a fertility value of $1 per
ton of hay equivalent produced.
d This does not include domestic certificate payments. Average yield times 50tf per bushel
equals approximate value of certificates per acre for wheat base acres. Add the value of certificates to the market value of wheat to get total  returns  if you qualify for certificate payments.
This is the return to management and to cover fixed costs in real estate, power and equipment.