Two agricultural economists say corn subsidies could cost $6 to $8 billion for this year’s record-large corn crop, says Reuters. The estimates are based on the projected U.S. average price of $3.50 a bushel for the crop, the price guarantees of the farm bill and the estimated crop of 14.4 billion billion bushels. Reuters quotes economist Chris Hurt of Purdue as saying, “It’s going to be expensive.”
Hurt said corn subsidies could cost $6 billion and other crops would add $2 billion to the total. Economist Patrick Westhoff, at a University of Missouri think tank, said the corn subsidies could be $8 billion. The 2014 farm law gives farmers two options for subsidies; a traditional target price system with a reference price of $3.70 a bushel for corn or a program that shields farmers from “shallow” declines in crop revenue. Federally subsidized crop insurance would cover steeper declines in revenue.