By Russ Pankonin
The Imperial Republican
Area farmers packed the St. Patrick Parish Hall in Imperial Friday to learn more specifics about the 2014 Farm Bill passed this year.
The meeting, which drew more than 130 people, was led by Linda Fegler, Farm Service Agency county director for Chase and Dundy Counties, and Red Willow County Extension Educator Robert Tigner.
Fegler opened the meeting and addressed some of the key provisions of the Farm Bill. Tigner reviewed several computer models that have been developed to help farmers evaluate which program options are best for them.
Farm updates first since 2002
Fegler said the new farm bill gives landowners the opportunity to update their crop yields and base acres for the first time since 2002.
She said it’s likely in a landowner’s best interest to make these updates.
For instance, she said the established corn yield in Chase County stands between 140-170 bushels. She knows many farmers can show yields far exceeding that county average.
Updated yields will better position landowners going forward because it’s been 12 years since the last update. Who knows how long it could be before Congress decides to allow this again, Fegler noted.
Landowners can also adjust the base acres they grow on a farm. Cropping practices are far different than in 2002. As a result, Fegler said this update period offers farmers the ability to adjust their base acres based on planting history from 2009-2012.
Feb. 27 deadline for update
Fegler couldn’t stress enough that these yield and base updates must be completed no later than Feb. 27, 2015. However, she urged landowners to begin the update process with her office as soon as possible. If they can’t get in by the deadline, the yields and bases will remain the same as 2002.
Operators must also decide which type of risk management program they want to use on their farms no later than March 31, 2015.
As part of the federal crop insurance program, farmer-operators must choose between three different risk management options.
These options include Price Loss Coverage (PLC), Agriculture Risk Coverage-County (ARC-CO) and Agriculture Risk Coverage-Individual (ARC-IC).
Fegler noted two distinct differences in the update process and the selection of risk plans.
Only the landowner is allowed to make the updates to yields and base acres while only the operator can make the decision on the risk management options.
Once a risk management option is chosen, it remains locked through 2018. If no option is chosen by the deadline, the PLC option is imposed and the operator forfeits any 2014 payments that would have been made under the new bill.
Price Loss Coverage deals strictly with price-based losses.
Assigning wheat base acres to PLC appears to be a good option because wheat yields typically don’t fluctuate a great deal, she said. So when the market year average price (figured over a 12-month period) falls below reference price for wheat set forth in the farm bill ($5.50 per bushel), a payment will be made.
Fegler said the PLC payment is figured on base acres for the crop, regardless of whether the crop was planted or not.
She said the PLC option can be combined with the ag risk coverage-county option for different crops. This would allow an operator to cover wheat under PLC and their corn and soybeans under the ARC-CO option.
Payments on both options are figured against base crop acres using county yields for each crop.
The ARC-individual option allows an operator to cover losses created by low prices and/or yield losses due to weather events. If an operator chooses this option, they may not choose either of the other two options.
This option takes into account the revenue of the farm, the farm’s historic revenue and requires planting of a crop. Payments are based on a percentage of the revenue shortfall.
Under the new bill, Fegler said farms will have only one established crop yield, with no distinction on whether or not the crop was irrigated.
For instance, farmers with both irrigated and dryland corn will be able to bump up the yield on their dryland to the new county average.
The same will be true for farmers who grow both irrigated and dryland wheat.
CRP, loan deadline Dec. 23
She noted the bill makes provisions for ground that has been in the Conservation Reserve Program or will come out sometime between 2014-2018.
Under certain circumstances, ground in CRP for five years or more may be removed from CRP without penalty. She said landowners should check with her office to see if their CRP is eligible.
Ground coming out of a CRP contract during the five-year period can then be enrolled in a risk management program. If a farmer has already elected the ARC-IC coverage for their farm, the CRP ground will come out under that option.
Fegler said farmers wanting to a take out a loan against their 2014 stored crops must make application by Dec. 23 for the payment to be made in the 2014 tax year.
Computer models available
Tigner followed up Fegler’s presentation by discussing how farmers can evaluate their operations and decide which risk management options will be best for them.
He reiterated that once an operator chooses the risk options, that choice is in effect for the five-year term of the new farm bill.
He too urged landowners to reevaluate the yield history and crop base acres, noting that only the landowner can do this with the FSA.
As a result, he said it’s important for operators who rent farm ground to work closely with the owner to ensure the review occurs.
Tenants may want to get a power of attorney from the landowner for the purpose of updating yields and base acres, Tigner advised.
Which program is best?
Operators need to decide which program is right for their operation, Tigner said. One option may pay more frequently but the payments will be smaller versus an option that doesn’t pay as often but with larger payments.
That’s where the models come in.
As part of the farm bill, the University of Illinois and Texas A&M were commissioned by Congress to create computer models to help farmers evaluate the options, Tigner said.
He said the two models allow farmers to plug in their actual crop yields and base acreages so the options can be compared side by side.
FSA also worked with the University of Nebraska Extension Service to review the risk management options and create real-life examples of how operators would be affected by their decisions.
Those examples were part of Tigner’s presentation. He said the Extension will be conducting further seminars after the first of the year on the evaluation process.
Farmers wanting to become familiar with the models can find them on the web.
Tigner said the university has created a website for more information on the bill and can be found at farmbill.unl.edu.
By clicking on the heading “Farm Bill Decision Tools Available,” farmers can navigate directly to the two computer models.
Web addresses for the models are as follows:
University of Illinois: fsa.usapas.com/; Texas A&M: usda.afpc.tamu.edu/.