USDA Unveils Key New Programs to Help Farmers Manage Risk

September 25th, 2014

End of Direct Payments Represents One of the Most Significant Farm Policy Reforms in Decades

USDA Launches Education Efforts to Help Producers Choose New Program Right for Them

WASHINGTON, Sept. 25, 2014 – U.S. Department of Agriculture (USDA) Secretary Tom Vilsack today unveiled highly anticipated new programs to help farmers better manage risk, ushering in one of the most significant reforms to U.S. farm programs in decades.

Vilsack also announced that new tools are now available to help provide farmers the information they need to choose the new safety net program that is right for their business.

“The 2014 Farm Bill represented some of the largest farm policy reforms in decades. One of the Farm Bill’s most significant reforms is finally taking effect,” said Vilsack. “Farming is one of the riskiest businesses in the world. These new programs help ensure that risk can be effectively managed so that families don’t lose farms that have been passed down through generations because of events beyond their control. But unlike the old direct payment program, which paid farmers in good years and bad, these new initiatives are based on market forces and include county – and individual – coverage options. These reforms provide a much more rational approach to helping farmers manage risk.”

The new programs, Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC), are cornerstones of the commodity farm safety net programs in the 2014 Farm Bill, legislation that ended direct payments. Both programs offer farmers protection when market forces cause substantial drops in crop prices and/or revenues. Producers will have through early spring of 2015 to select which program works best for their businesses.

To help farmers choose between ARC and PLC, USDA helped create online tools that allow farmers to enter information about their operation and see projections about what each program will mean for them under possible future scenarios. The new tools are now available at www.fsa.usda.gov/arc-plc. USDA provided $3 million to the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri and the Agricultural and Food Policy Center (AFPC) at Texas A&M (co-leads for the National Association of Agricultural and Food Policy), along with the University of Illinois (lead for the National Coalition for Producer Education) to develop the new programs.

“We’re committed to giving farmers as much information as we can so they can make an informed decision between these programs,” said Vilsack. “These resources will help farm owners and producers boil the information down, understand what their options are, and ultimately make the best decision on which choice is right for them. We are very grateful to our partners for their phenomenal work in developing these new tools within a very short time frame.”

Starting Monday, Sept. 29, 2014, farm owners may begin visiting their local Farm Service Agency (FSA) offices if they want to update their yield history and/or reallocate base acres, the first step before choosing which new program best serves their risk management needs. Letters sent this summer enabled farm owners and producers to analyze their crop planting history in order to decide whether to keep their base acres or reallocate them according to recent plantings.

The next step in USDA’s safety net implementation is scheduled for this winter when all producers on a farm begin making their election, which will remain in effect for 2014-2018 crop years between the options offered by ARC and PLC.

Today’s announcement was made possible through the 2014 Farm Bill, which builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for the taxpayer. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America. For more information, visit www.usda.gov/farmbill.

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This Big Crop Got Bigger

September 11th, 2014

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

Hart_Chad-thumbThis Big Crop Got Bigger (9/11/14)

The word “record” continues to fly around agriculture as USDA released its WASDE and Crop Production reports. In August, USDA projected record corn and soybean crops. In September, USDA increased the size of those records. In both cases, crop acreage was held steady, going against some suggestions that acreage might be reduced, based on certified plantings from the Farm Service Agency. The national average corn yield was raised to 171.7 bushels per acre. USDA also raised the corn yield estimates in 24 states.  Only one state (Pennsylvania) saw a reduction in expected corn yield. These yield estimates increase projected 2014 corn production to 14.395 billion bushels, roughly 470 million bushels more last year’s record crop. The national average soybean yields increased to 46.6 bushels per acre, 1.2 bushels above last month’s estimate. Twenty state soybean yields were also increased.  Soybean production is now pegged at 3.913 billion bushels, that’s over 550 million bushels more than the previous record.

On the demand side, USDA put forward increases in feed and residual, ethanol, food, seed, and export uses for corn. The shifts brought corn demand to a record 13.605 billion bushels.  But with supplies still outracing demand, corn ending stocks are projected to exceed 2 billion bushels. With the increased ending stocks, USDA lowered the midpoint of its season-average price range by 40 cents to $3.50 per bushel. Domestic crush and export demand increased for soybeans. But the general story is the same as it is for corn, higher ending stocks and lower crop prices. The midpoint of the season-average price range fell 35 cents to $10 per bushel.

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Worksheet Helps Producers Identify Selections for 2014 Farm Bill

September 5th, 2014

The Agricultural Act of 2014 is important legislation. It provides farmland owners and operators the opportunity to make a one-time election of a commodity program for 2014 through 2018. The legislation also allows the operator to enroll annually in a chosen program. Iowa State University Extension and Outreach provides several resources to assist in this decision-making process.

“While the Farm Bill of 2014 provides opportunities for farmers to update their farm selections, it is important that they consider several factors before making these decisions,” said Ann Johanns, extension program specialist. Johanns coordinates Ag Decision Maker, an agricultural economics and business website sponsored by Iowa State University Extension and Outreach.

“We have developed several tools, including the Base Acreage Reallocation and Payment Yield Update, to assist owners and operators as they determine what is best for their business and family,” Johanns said.

Alejandro Plastina, an extension economist with Iowa State University Extension and Outreach, developed the Base Acreage Reallocation and Payment Yield Update.

“Opportunities to update base acres and payment yields for commodity programs are few and far between,” Plastina said. “So farmers should seriously consider this opportunity provided by the 2014 Farm Bill.”

“The worksheet is a simple tool to evaluate the convenience of having the payment formulas for some commodity programs updated to better reflect current production patterns on a farm-by-farm basis,” Plastina added. He noted that the decision tool includes multiple worksheets to allow information for up to five farms.

The Base Acreage Reallocation and Payment Yield Update worksheet was designed to help Iowa farmland owners with base acreage reallocation decisions for the Agricultural Risk Coverage-County (ARC-CO) program and the Price Loss Coverage (PLC) program, and with payment yield update decisions for the PLC program. To access this and other online tools, go to www.extension.iastate.edu/agdm.

To further support producers, a series of workshops will be held across Iowa to provide information about the Farm Bill and the impact it has on producers. The meetings will be held once final regulations are set. A complete schedule will be posted on the AgDM Farm Bill Web page at www.extension.iastate.edu/agdm/info/farmbill.html.

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Livestock Producers Urged to Enroll in Disaster Program by Oct. 1

September 5th, 2014

Contacts:
USDA Office of Communications
PH (202) 720-4623
Livestock Producers Urged to Enroll in Disaster Program by Oct. 1

Congressionally Mandated Payment Reductions to Take Effect at Beginning of New Fiscal Year
Ranchers Applying for LFP Support Who Have Scheduled Appointments by Sept. 30th Will not be Impacted
WASHINGTON, Sept. 2, 2014 – The U.S. Department of Agriculture (USDA) is encouraging producers who have suffered eligible disaster-related losses to act to secure assistance by Sept. 30, 2014, as congressionally mandated payment reductions will take place for producers who have not acted before that date. Livestock producers that have experienced grazing losses since October 2011 and may be eligible for benefits but have not yet contacted their local Farm Service Agency (FSA) office should do so as soon as possible.

The Budget Control Act passed by Congress in 2011 requires USDA to implement reductions of 7.3 percent to the Livestock Forage Disaster Program (LFP) in the new fiscal year, which begins Oct. 1, 2014. However, producers seeking LFP support who have scheduled appointments with their local FSA office before Oct. 1, even if the appointment occurs after Oct.1, will not see reductions in the amount of disaster relief they receive.

USDA is encouraging producers to register, request an appointment or begin a Livestock Forage Disaster Program application with their county FSA office before Oct. 1, 2014, to lock in the current zero percent sequestration rate. As an additional aid to qualified producers applying for LFP, the Farm Service’s Agency has developed an online registration that enables farmers and ranchers to put their names on an electronic list before the deadline to avoid reductions in their disaster assistance. This is an alternative to visiting or contacting the county office. To place a name on the Livestock Forage Disaster Program list online, visit http://www.fsa.usda.gov/disaster-register .

Producers who already contacted the county office and have an appointment scheduled need do nothing more.

“In just four months since disaster assistance enrollments began, we’ve processed 240,000 applications to help farmers and ranchers who suffered losses,” said Agriculture Secretary Tom Vilsack. “Eligible producers who have not yet contacted their local FSA office should stop by or call their local FSA office, or sign up online before Oct. 1 when congressionally mandated payment reductions take effect. This will ensure they receive as much financial assistance as possible.”

The Livestock Indemnity Program, the Tree Assistance Program and the Noninsured Disaster Assistance Program Frost Freeze payments will also be cut by 7.3 percent on Oct. 1, 2014. Unlike the Livestock Forage Disaster Program, applications for these programs must be fully completed by Sept. 30. FSA offices will prioritize these applications, but as the full application process can take several days or more to complete, producers are encouraged to begin the application process as soon as possible.

The Livestock Forage Disaster Program compensates eligible livestock producers who suffered grazing losses due to drought or fire between Oct. 1, 2011 and Dec. 31, 2014. Eligible livestock includes alpacas, beef cattle, buffalo, beefalo, dairy cattle, deer, elk, emus, equine, goats, llamas, poultry, reindeer, sheep or swine that have been or would have been grazing the eligible grazing land or pastureland. Producers forced to liquidate their livestock may also be eligible for program benefits.

Additionally, the 2014 Farm Bill eliminated the risk management purchase requirement. Livestock producers are no longer required to purchase coverage under the federal crop insurance program or Noninsured Crop Disaster Assistance Program to be eligible for Livestock Forage Disaster Program assistance.

To learn more about USDA disaster relief program, producers can review the 2014 Farm Bill fact sheet at www.fsa.usda.gov/farmbill, the LFP program fact sheet, http://go.usa.gov/5JTk, or contact their local FSA office.

The Livestock Forage Disaster Program was made possible through the 2014 Farm Bill, which builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for the taxpayer. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America. For more information, visit www.usda.gov/farmbill.

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USDA Conservation Reserve Program: Early Outs for Some Contracts

September 2nd, 2014

The Agriculture Act of 2014 (the 2014 Farm Bill) requires the U.S. Department of Agriculture (USDA) to allow a limited number of CRP participants who meet specific qualifications an opportunity to terminate (referred to as “opt-outs”) the CRP contract during fiscal year 2015, if those contracts have been in effect for at least five years and if other conditions are also met. View the USDA FSA Conservation Fact Sheet for details on the opt out conditions.

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USDA Extends Deadline for the Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program

August 12th, 2014

WASHINGTON, July 31, 2014 — U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) Administrator Juan M. Garcia announced today that the enrollment deadline for the 2012 and 2013 Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program (ELAP) has been extended to Aug. 15, 2014. Originally, program sign-up was scheduled to end Aug. 1.

The new deadline gives livestock, honeybee, and farm-raised fish producers who experienced losses because of disease, adverse weather, wildfires or colony collapse disorder between Oct. 1, 2011 and Sept. 30, 2013, an additional two weeks to enroll in ELAP.

“Because ELAP is an important safety net for key sectors of American agriculture, we’ve provided this two week extension so that producers can submit required documentation and apply for program benefits,” said Garcia.

Producers are encouraged to contact their local FSA service center or visit FSA’s website at www.fsa.usda.gov for additional information regarding ELAP.

ELAP was authorized by the 2014 Farm Bill, which builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America. For more information, visit www.usda.gov/farmbill.

Government Programs

Record Crops, But Somewhat Smaller Than Expected

August 12th, 2014

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

Hart_Chad-thumbRecord Crops, But Somewhat Smaller Than Expected (8/12/14)

The USDA’s WASDE and Crop Production reports were released today. These reports were heavily anticipated by the markets as they represent the first set of estimates based on objective data from the field. The pre-trade expectations were for both crops to reach record production levels. And on that count, the reports agreed. But the production levels projected by USDA are slightly smaller than expected. For corn, the adjustments actually start with the 2013 crop. As we finish up the 2013 marketing year, corn demand has continued to build. In these latest numbers, USDA increased ethanol demand by 45 million bushels and export demand by 20 million bushels. Those changes cut ending stocks to 1.18 billion bushels, which was outside the range of pre-trade expectations. For the 2014 corn crop, there were a number of shifts on both the supply and demand front. The national yield was estimated at 167.4 bushels per acre. That’s up 2.1 bushels from USDA’s original estimate and up 8.6 bushels from last year. Given that yield, production is pegged at just over 14 billion bushels, topping last year’s record. However, the trade was looking for production in 14.2 billion bushel range, so the corn crop is a little lighter than anticipated. Feed, ethanol, and export demand were all increased, raising total demand to 13.435 billion bushels. Carryout stands at 1.8 billion bushels. The midpoint of the 2014/15 season-average price range was lowered to $3.90 per bushels, down 10 cents from last month.

For soybeans, the shifts for the 2013 crop basically offset each other, leaving ending stocks at 140 million bushels and a season-average price of $13 per bushel. For the 2014 crop, the yield was increased by 0.2 bushels per acre to a national average of 45.4 bushels per acre. That puts production at 3.816 billion bushels. Demand for the 2014 crop was left unchanged, so the production increase was absorbed into ending stocks. Carryout was raised to 430 million bushels for the 2014/15 crop and the midpoint of the 2014/15 season-average price range was lowered 15 cents to $10.35 per bushel.

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Crop Outlook

USDA Extends Deadline for the Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program

August 12th, 2014

WASHINGTON, July 31, 2014 — U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) Administrator Juan M. Garcia announced today that the enrollment deadline for the 2012 and 2013 Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program (ELAP) has been extended to Aug. 15, 2014. Originally, program sign-up was scheduled to end Aug. 1.

The new deadline gives livestock, honeybee, and farm-raised fish producers who experienced losses because of disease, adverse weather, wildfires or colony collapse disorder between Oct. 1, 2011 and Sept. 30, 2013, an additional two weeks to enroll in ELAP.

“Because ELAP is an important safety net for key sectors of American agriculture, we’ve provided this two week extension so that producers can submit required documentation and apply for program benefits,” said Garcia.

Producers are encouraged to contact their local FSA service center or visit FSA’s website at www.fsa.usda.gov for additional information regarding ELAP.

ELAP was authorized by the 2014 Farm Bill, which builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America. For more information, visit www.usda.gov/farmbill.

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