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Jim Meade / Iowa City
Senior Advisor

Farmer Owned Reserve

This old idea has been revived by the Farmers Union and has been studied by Darrell Good of the Universtiy of Tennessee, who says it offers considerable savings and some advantages.  Would you like to go back to RON?

 

http://www.farmgateblog.com/article/1473/would-you-like-to-see-a-return-to-the-farmer-owned-reserve

 

Here's a comment from one commentary from the above article. 

 

"...Farmer Owned Reserve, in which farmers would store grain on farm with grain not released for sale until it reached 160% of the loan rate. Supporters say it will allow grain to average higher prices than in recent years and will only cost taxpayers about one-third of what has been paid out in commodity programs over the past 13 crop years." 

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1 Reply
Nebrfarmr
Veteran Advisor

Re: Farmer Owned Reserve

My concerns would be:

What is the loan rate?

Can the government 'make' farmers sell grain in reserve?

If we have surplus grain, where will it go - will it be sold, or just stockpiled?

If we are short grain on a spot market, can farmers sell, even if the price isn't high enough?  (for example, can a feedlot that unexpectedly ran out of gran, buy it out of the reserve for less than 160% of loan rate?

 

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