Consumption of biofuels is scheduled to ramp up to 36 billion gallons over the next 13 years if the timetable set in the Renewable Fuels Standard (RFS) is to be maintained. To ensure that fuel blenders meet this volume, the Environmental Protection Agency (EPA) uses the market for biofuel RINs (Renewable Identifi cation Numbers) to create a suffi cient incentive.

Although farm programs and crop insurance programs are increasingly similar, one feature continues to differentiate them: crop insurance programs use prices that refl ect market conditions at sign-up time, whereas farm programs do not. Crop insurance programs must use current price information to set guarantees to keep farmers from moving into or out of the program based on whether revenue guarantees are more or less likely to generate a payout. Because the government does not ask farmers to contribute toward meeting the costs of farm programs, there is less fi nancial need for the programs to refl ect current market conditions. But the lack of infl uence of current market conditions on the prices used to set farm program guarantees often means that these programs will offer too little or too much support to farmers.

One look at the long list of abbreviations used for U.S. farm programs indicates the pervasive role that government plays in providing subsidized risk management to the U.S. crop sector. To take full advantage of these subsidies, farmers and those who serve them need to be able to decipher not only what ACRE, GRP, SURE, GRIP, RA, CRC, APH, LDP, DP, CCP, and HRO stand for but also how the programs work and how they either substitute for or complement one another as well as other private risk management efforts.

Although uncertainties abound, the outlook for Corn Belt corn and soybean farmers is bright. Demand for corn and soybeans remains high despite cutbacks in corn exports, feed use, and the financial difficulties of the biofuels industry. World supplies have not grown as rapidly as expected because of moderating prices, less-than-ideal growing-season weather around the world, and credit constraints caused by the world financial crises. A comparison of the situation farmers face today with what they faced in April 2006 before the rapid run-up in commodity prices offers some perspective on how the fortunes of corn and soybean farmers have changed over the last three years.