Farmer\u27s choices under the 1964 volunteer wheat certificate program addresses decisions to make about the program, the main provisions of the program, and budgeting for the program

Anderson, A. W.

Pates, J. L.

English

Public Research Access Institutional Repository and Information Exchange

South Dakota State University Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange SDSU Extension Fact Sheets SDSU Extension 1964 Farmer's Choices Under the 1964 Voluntary Wheat Certificate Program A. W. Anderson J. L. Pates Follow this and additional works at: https://openprairie.sdstate.edu/extension_fact Recommended Citation Anderson, A. W. and Pates, J. L., "Farmer's Choices Under the 1964 Voluntary Wheat Certificate Program" (1964). SDSU Extension Fact Sheets. 1283. https://openprairie.sdstate.edu/extension_fact/1283 This Fact Sheet is brought to you for free and open access by the SDSU Extension at Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange. It has been accepted for inclusion in SDSU Extension Fact Sheets by an authorized administrator of Open PRAIRIE: Open Public Research Access Institutional Repository and Information Exchange. For more information, please contact michael.biondo@sdstate.edu. Historic, archived doculllent Do not assume content reflects current scientific knowledge, policies, or practices. SDSU ® Extension For current policies and practices, contact SDSU Extension Website: extension.sdstate.edu Phone: Email: 605-688-4 792 sdsu.extension@sdstate.edu SDSU Extension is an equal opportunity provider and employer in accordance with the nondiscrimination policies of South Dakota State University, the South Dakota Board of Regents and the United States Department of Agriculture. F.S. 204 FARMER'S CHOICES UNDER THE 1964 VOLUNTARY WHEAT CERTIFICATE PROGRAM By A. W. Anderson, Extension Economist J. L. Pates, Extension News Editor SOUTH DAKOTA STATE Published and distributed in furtherance of the Acts of Congress of May 8 and June 30, 1914, by the Cooperative Extension Service of South Dakota State College of Agriculture an<l Mechanic Arts, Brookings, John T. Stone, Director, and the U. S. Department of A_gricul tu re. 7.5.M-4-64- File: 3.3132-1204 FARMERS' CHOICES UNDER THE 1964 VOLUNTARY WHEAT CERTIFICATE PROGRAM I. Deciding About The Program The 19 64 voluntary wheat program offers three incentives to wheat producers who sign up and fulfill the requirements: (1) Payments for diverting wheat acres to conservation uses. (2) Price support through loans. (3) Two types of cashable certificates for wheat. You are free to decide whether or not you want to participate, the extent of participation, and the use of diverted acres. Winter wheat growers who over-planted may want to participate by plowing up some acreage. Others may want to divert a larger percentage based on their wheat stand this spring. This pamphlet is aimed at helping you make wheat program decisions for 1964. Apply the provisions and requirements to your own farm. Budget forms on pages 2 and 3 are designed for your own individual use. II. Main Provisions A new concept in wheat programs. For the first time in history U.S. wheat farmers have a three-price system for wheat. Participants in the wheat program will have a basic support (loan rate) of $1. 30 per bushel national average. In South Dakota the county support rate will likely range between $1.16 and $1. 44. In addition, two kinds of certificates will be issued to participants. Domestic certificates, worth 70 cents per bushel, will be issued on 45 per cent of the normal production on allotted acres. Export certificates, worth 25 cents a bushel, will be issued on about 45 per cent of your normal production. The remaining 10 per cent will be called non-certificate wheat and can be sold on the market, fed, or stored under support loan. In case of underplanting or extra diversion, certificates will be issued first on the "domestic" portion and then on the remaining "export" portion covered by certificates. The certificates may be redeemed for cash at the County ASC office. If you sign up for the program and suffer a total crop loss, you will still be eligible for domestic and export certificates based on normal production on planted acres. The 1964 Allotment and Minimum Diversion. Your 1964 allotment figure, which you received before the wheat referendum, already contains a 10 % cut from the allotment figure you had in 19 63. If you plant your entire 19 64 allotment and set aside an acreage equal to 11.11 % of that figure (which is really the difference between your 19 63 and 19 64 allotments), you have complied with one part of the program. Additional or Maximum Diversion. As a participating wheat grower you may divert up to 20% more (or 15 acres, whichever is larger) o If the allotment is 13 o 5 acres or less, the entire acreage may be diverted. ( Continued on page 4) 1964 WHEAT PROGRAM FARM BUDGET or ESTIMATING FORM A. Begin with some information you have received from your county ASCS office. B. Estimate your: a. Your 1964wheatallotment,~acres. b. Your "normal yield 11 , '2_0 bu. per ac. e. "Variable 11 1) costs of production per acre$//, ee. ($8 to $14 range) f. "Variable 11 1) costs on land di-verted, $ L/, Q!2. per acre. ( $2 to $6) c. Your county price support loan rate, $ /. 3 o per bu. g. Expected market price $ll£._perbu. d. Your diversion payment rate (1/5 of c times b), s ►,-: :/.0 per acre. h. Expected actual yield ::LO bu. per acre. C. Some alternatives: i. Acres you could produce j. Acres you would divert k. Your expected actual production (i times h) 1. Value of production (k times c or g) m. Certificates at 70¢ n. Certificates at 25¢ o. Value of certificates (m times 70¢ plus n times 25¢) p. Diversion payment (j times d) q. Total income (1 plus o plus p) r. "Variable II costs of production (i times e) s., "Variable II costs on land diverted. (j times f) t. Return over variable costs (q minus r and s) Non-Particip. If you exceed your allotment (Column 1) /20 xx ~ J./ 0 0 bu. $ 3,/~ 0 xx xx xx xx $~ /~0 s/320 ; xx s ~ too Participation Minimum Produce your alloted 19 64 wheat acreaqe (Column 2) ?!1 2) I f?tJ<2 bu. I $ Z. 3L/O /: Jo bu. 4) K Jo bu. 4) s____,7.......,,.7_0_ $====5=;;-=-= s . 2 It 2-, s ~Cjo s 'fo s J./YL , ---------Maximum Divert up to 20% additional wheat acreaqe (Column 3) /'fl/0 bu" s ~%72 /0 bu. 4) k 3 0 bu. 5) s J2tf $ It/?,, $2,JLfJ_ s 772-$ //2, - s_ ;_ ~ ! _g_ -1) "Variable II costs (such as seed, gas, oil, labor, etc .. ) are those that will vary accord-ing to the number of acres of wheat that you grow. They are distinguished from ''fixed II costs by the fact that the fixed costs are not changed by the number of acres of wheat. Fixed costs include taxes, interest, depreciation and other costs that are already incurred. With wheat, harvesting is a major variable cost. 2} 11. 11 percent of your 19 64 farm allotment. 3) Line j, Column 2 plus the difference between Line i, Column 2 and Line i, Column 3. 4) Line i, Column 2 times b times 45 percent. But Line m, Column 3 cannot be larger than Line i,. Column 3, times b. 5) Line i, Column 3 times b minus Line m, Column 3, but no larger than Line m, Column 3.. __,I 1964 WHEAT PROGRAM FARM BUDGET or ESTIMATING FORM A. Begin with some information you have received from your county ASCS office. B. Estimate your: e. "Variable 11 1) costs of production a. Your 19 64 wheat allotment, __ acres. peracre $ ___ • ($8to $14range) f. "Variable 11 1) costs on land di-b. Your "normal yield" , __ buo per ac. verted, $ ___ per acre. ( $2 to $6) c. Your county price support loan rate, $ ____ per bu. go Expected market price $ __per bu. d. Your diversion payment rate (1/5 of h. Expected actual yield __ bu. per c times b), $ ____ per acre. C. Some alternatives: i. Acres you could produce j. Acres you would divert k. Your expected actual production (i times h) 1. Value of production (k times c or g) m. Certificates at 70¢ n. Certificates at 25¢ o. Value of certificates (m times 70¢ plus n times 25¢) p. Diversion payment (j times d) q. Total income (1 plus o plus p) r. "Variable II costs of production (i times e) s. "Variable" costs on land diverted. (j times f) t. Return over variable costs (q minus r and s) Non-Particio. If you exceed your allotment (Column 1) xx bu. $ xx xx xx xx $ $ xx $ acre. Participation Minimum Produce your alloted 19 64 wheat acreaae (Column 2) 2) bu. $ bu. 4) bu. 4) $ $ $ $ $ $ Maximum Divert up to 20 % additional wheat acreaae (Column 3) 3) bu. $ bu. 4) bu. 5) $ $ $ $ $ $ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -1) "Variable" costs (such as seed, gas, oil, labor, etc.) are those that will vary accord-ing to the number of acres of wheat that you grow. They are distinguished from "fixed" costs bythe factthatthe fixedcosts are notchanged bythe numberofacres of wheat. Fixed costs include taxes, interest, depreciation and other costs that are already incurred. With wheat, harvesting is a major variable cost. 2) 11.11 percent of your 19 64 farm allotment. 3) Line j, Column 2 plus the difference between Line i, Column 2 and Line i, Column 3. 4) Line i, Column2 timesbtimes45 percent. But Line m, Column3 cannot be larger than Line i, Column 3, times b. 5) Line i, Column 3 times b minus Line m, Column 3, but no larger than Line m, Column 3. No automatic participation. Don't assume that you are automatically eligible for the program simply because you plant within your allotment and divert the needed acreage. YOU MUST SIGN AN AGREEMENT WITH YOUR COUNTY ASC OFFICE prior to May 15 before you qualify for ANY program benefits. Other Points To Remember: * You may qualify for the Wheat Program even though you are not partici-pating in the 1964 Feed Grain program. * Certificates must be divided between landlord and tenant in the same proportion in which wheat crop is divided. III. Budgeting Your Farm Wheat Program In the example farm illustrated by the completed budget form on Page 2, the assumption is made that the farm wheat allotment for 1964 is 90 acres, that the normal wheat yield is 20 bushels per acre, and that the basic county price support loan rate will be $1. 30 per bushel. It also assumes that expected market price will be the same as the county support rate, and that expected actual yield will be the same as the farm normal yield. These are estimates. Figures in Column 1 illustrate the calculations for Non-Participation, if the farmer exceeds his allotment by one-third and grows 120 acres of wheat. Figures in Column 2 illustrate Participation at the minimum level, or staying within the 1964 allotment of 90 acres and diverting 10 acres to conservation use. Figures in Column 3 illustrate Participation at the maximum level by diverting 28 acres and growing 72 acres of wheat. A word of caution. The figures on Page 2 are for purposes of illustration only. To determine the best combination for your farm, go to Page 3 and apply the same procedure. Insert your own 19 64 farm wheat allotment, normal yield, county support rate and other information. Calculate your own possible returns above variable costs under several different levels of wheat acreage. This process should help you decide your most profitable wheat program for 1964. 

Farmer\u27s Choices Under the 1964 Voluntary Wheat Certificate Program

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Farmer\u27s Choices Under the 1964 Voluntary Wheat Certificate Program

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