ISU Extension Farm Bill – Program Overview Meetings

October 17th, 2014

Iowa farmers and landowners will learn about the new programs authorized by the Agricultural Act of 2014 (commonly referred to as the Farm Bill) at informational meetings conducted by Iowa State University Extension and Outreach and local USDA Farm Service Agency staff members. Meetings will be held across the state to explain options available under the new Farm Bill.

Farm Bill – Program Overview meetings will focus on the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) that will be administered by USDA Farm Service Agency, and the Supplemental Coverage Option (SCO) administered by USDA Risk Management Agency through federal crop insurance providers.

“Extension farm management specialists are prepared to discuss decisions farmers and landowners need to make in the coming months regarding Price Loss Coverage, and Agricultural Risk Coverage Individual and County options,” said Chad Hart, ISU Extension and Outreach economist and program coordinator. “Local FSA staff members who administer the programs will be available to answer questions.”

The timeline for when decisions need to be made along with information about online Farm Bill decision tools also will be shared at the meetings. Topics that will be covered during the meetings include:

  • Base reallocation
  • Yield updating
  • Price Loss Coverage (PLC)
  • Ag Risk Coverage (ARC)
  • Implications of PLC and ARC on participation in the Supplemental Coverage Option (SCO)
  • Dairy Margin Protection Program (MPP)
  • Noninsured Crop Disaster Assistance Program (NAP)

Locate a Farm Bill – Program Overview meeting
Farm Bill meetings for upcoming months continue to be added to the ISU Extension and Outreach Statewide Calendar. For the most current listing of meeting locations and dates visit the Ag Decision Maker Farm Bill website at www.extension.iastate.edu/agdm/info/farmbill.html or contact your county extension office.

The Ag Decision Maker Farm Bill website also contains useful links and resources related to Farm Bill decision making. Contact a county extension office for additional details about upcoming local meetings.

PHOTO:
Steve Johnson, farm management specialist, and Chad Hard, extension economist, visited with 2014 Farm Progress Show visitors about  the farm bill.

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Acreage Reduced, But Yields Offset

October 10th, 2014

Acreage Reduced, But Yields Offset (10/10/14)

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

Hart_Chad-thumbOver the past couple of months, there had been significant discussion of crop acreage numbers and whether the NASS estimates would be adjusted downward. That adjustment occurred in the most recent reports. For corn, planted and harvested area were reduced by 700,000 acres. A similar downward adjustment took place for soybeans. But in both cases, the acreage losses were offset by higher yields so that total production continued to climb. The national average corn yield was raised 2.5 bushels to 174.2 bushels per acre. The corn yield estimates were raised in 22 states. And 22 states are projected to set state records as well. Illinois is projected at 200 bushels per acre. The jump in soybean yields isn’t quite as dramatic, but the end result is the same, larger production. The national average is projected at 47.1 bushels per acre, up 0.5 bushels. 13 states are expected to have record yields.

Putting it all together, USDA estimates a 14.475 billion bushel corn crop and a 3.927 billion bushel soybean crop. Both, by far, the largest crops the country has ever produced. In comparison, the demand projections were little changed. Corn feed and residual use was increased by 50 million bushels. That was the only shift in projected demand for the 2014 crops. Estimates for the 2014/15 market year average prices dropped 10 cents for corn to a midpoint of $3.40 per bushel. For soybeans, the price estimates held steady, with a midpoint of $10 per bushel.

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Crop Outlook

2013 ACRE revenue shortfall triggers corn payment

October 8th, 2014

Contributed by Steven D. JohnsonFarm Management Specialist, Iowa State University Extension, sdjohns@iastate.edu, 515-957-5790

Johnson_Steve_smThe Average Crop Revenue Election (ACRE), a counter-cyclical program created in the 2008 farm bill has had limited participation by Iowa producers. In addition to the Direct & Counter-Cyclical Payment (DCP) programs, a producer could also enroll by FSA farm number in this new ACRE program. There was a cost of participation, as a producer was required to give up 20% of their Direct Payment (DP) annually.

The ACRE program used a combination of state average yields, farm level yields and the national marketing year average (MYA) national cash price to determine levels of revenue guarantees and payments for each covered commodity on a farm enrolled. There were two revenue triggers that had to be met annually before any ACRE payments were generated, one at the state level and one at the farm level.

The price component of both of the state and farm level triggers is the average of the two most recent USDA marketing year prices. The marketing year runs from September through August each year and uses a weighted average to determine the national cash price. The marketing year average (MYA) national cash prices for the 2011 and 2012 crops were $6.22 and $6.89 per bushel, respectively. The 2013 MYA national cash price of $4.46 per bushel was released on September 29, 2014.

2013 ACRE payment is approximately $45 per base acre for corn

To trigger a payment under ACRE the “actual” revenue for both the state and the farm must be less than their corresponding guarantees. The actual revenues are the current marketing year cash price multiplied by the state average yield and the actual farm level yield, respectively. If both triggers are reached, the payment to the farm will be the difference between the state revenue guarantee and the state actual revenue.

The payment level cannot exceed 25% of the state guarantee, however. It will also be adjusted up or down by the ratio of the farm Olympic average yield to the state Olympic average yield. For example, if the farm average yield is 10% above the state average yield, the ACRE payment will be increased by 10% for that farm. Because of this 10% limit, the state revenue guarantee for 2013 was $781. The actual state revenue was approximately $736 per acre or 165 bushel per acre state corn yield times $4.46 per bushel national cash price in 2013. This leaves a shortfall in revenue of approximately $45 per base acre of corn.

The 2013 ACRE payment was made on 85% of the farm’s base acres. However, the total planted acres that receive a payment cannot exceed the total base acres for all crops established for the counter-cyclical payments. Producers who signed up for the 2013 ACRE program did receive 80% of the direct payments that have been paid in 2013, regardless of actual prices or yields each year.

Check with your local Farm Service Agency (FSA) Office

For those 6,000 Iowa farms enrolled in the 2013 ACRE program, they were required to submit 2013 actual farm’s yields to their local FSA office by mid-July. Those same farms will still need to meet both the farm and state triggers. That payment to the farm will be the difference between the state revenue guarantee and the state actual revenue, which appears likely for corn for the 2013 crop. Since the MYA national cash price was not known until September 29, 2014, the ACRE payment is not made until October 2014. Payments to those farms enrolled and appropriate yield information is expected to be made by FSA after October 10, 2014.

Using the ACRE Payment Estimator

Iowa State University Extension created an Average Crop Revenue Election (ACRE) Payment Estimator, an online tool, in 2008 to assist producers as they determined if they should enroll in the ACRE program. The calculator has since been updated. You can use this same calculator now to estimate the potential 2013 ACRE payment for your farm, which appears likely for corn base acres. You can find an Information File and Decision Tool titled Average Crop Revenue (ACRE) on the Ag Decision Maker website.

For information related to the 2014 Farm Bill, visit the Ag Decision Maker Farm Bill webpage.

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USDA Farm Service Agency Announces Key Dates for New 2014 Farm Bill Safety Net Programs

October 3rd, 2014
Farmers can Update Yield History and/or Reallocate Base Acres through Feb. 27, 2015;
Producers Select the Safety Net Program Best for Their Operation Beginning Nov. 17, 2014 through March 31, 2015

 

WASHINGTON, Oct. 2, 2014 – The U.S. Department of Agriculture (USDA) is announcing key dates for farm owners and producers to keep in mind regarding the new 2014 Farm Bill established programs, Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC). The new programs, designed to help producers better manage risk, usher in one of the most significant reforms to U.S. farm programs in decades.

 

“The ARC and PLC programs are a significant reform in the farm safety net,” said Farm Service Agency (FSA) Administrator Val Dolcini. “FSA wants to keep producers well informed on all steps in the process. We will continue our outreach efforts and maintain resources online to help them understand the new programs before they come in to make decisions for their operations.”

 

Dates associated with ARC and PLC that farm owners and producers need to know:
  • Sept. 29, 2014 to Feb. 27, 2015: Land owners may visit their local Farm Service Agency office to update yield history and/or reallocate base acres.
  • Nov. 17, 2014 to March 31, 2015: Producers make a one-time election of either ARC or PLC for the 2014 through 2018 crop years.
  • Mid-April 2015 through summer 2015: Producers sign contracts for 2014 and 2015 crop years.
  • October 2015: Payments for 2014 crop year, if needed.
USDA leaders will visit with producers across the country to share information and answer questions on the ARC and PLC programs.

 

USDA helped create online tools to assist in the decision process, allowing farm owners and producers to enter information about their operation and see projections that show what ARC and/or PLC will mean for them under possible future scenarios. The new tools are now available at www.fsa.usda.gov/arc-plc. Farm owners and producers can access the online resources from the convenience of their home computer or mobile device at any time. 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 these online tools.

 

Covered commodities include barley, canola, large and small chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long grain rice, medium grain rice (which includes short grain rice), safflower seed, sesame, soybeans, sunflower seed and wheat. Upland cotton is no longer a covered commodity.

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.

Sept. 29, 2014 to Feb. 27, 2015
Nov. 17, 2014 to March 31, 2015
Mid-April through Summer 2015
October 2015
Land owners make base reallocation/yield updates
Producers make election between ARC/PLC
Producers sign contracts for 2014 and 2015 crop years
Payments for 2014 crop year, if needed

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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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