Category Archives: Insurance

Which Farm Bill Program Should You Choose…GREAT TOOL!

To ARC or PLC remains the question and the timeframe for making that decision is September 29, 2014 through March 31, 2015. There isn’t a day that goes by when I don’t hear questions regarding which Farm Bill program to choose. I am by no means an expert on this subject and have many unanswered question myself. Some of the folks I consider the leading guru’s keep telling me it’s best that I simply continue to wait before making my decision. I have however recently been sent a rather fantastic decision making tool that I have been playing around with. From what I am told, the Farm Bill Decision Tool was designed by Dr. Art Barnaby in conjunction with Oklahoma State University and Kansas State University, with funding from Oklahoma Cooperative Extension Service, Southern Risk Management Education Center, and Kansas Cooperative Extension Center. This spreadsheet approach is easy to work with and allows you to customize and change crops, counties, etc… I believe this is a very helpful tool and am thankful for those folks at both K-State and Oklahoma State who put it all together. Click the link to access the “Farm Bill Decision Tool.” Another great resource I’ve found is Clint Clayton’s article “Base Acre and ARC-PLC Deadlines Reported”, which is available here. As always, make certain you are communicating and working closely with your individual agent in selecting the best and most appropriate coverage or your particular operation. Remember, there is no one coverage that is right for all producers or operations. In low margin years we need to careful do our homework…it will be the difference between simply surviving and remaining a profitable business.

What You Need To Know Right Now About The New Farm Bill

I wanted to share with you some of the things being passed around in regards to preparing yourself for the new farm programs to be instituted from the 2014 Farm Bill. From what I understand, we should have some concrete answers by late 2015/Early 2015. While we wait, producers and landlords should be aware that there are actions that should be taken now to prepare for the decisions that must be made during the coming months. The 2014 farm bill includes three decisions that farmers and landlords will be required to make in 2014 and 2015:

  1. Updating Program Yields: Owners will be permitted to update their program yields based on the farm’s actual production yields from 2008-2012.
  2. Reallocating Base Acres: Owners will be permitted to reallocate their base acres based on the farm’s actual planted acreage from 2009-2012.
  3. ARC Programs versus PLC Program: The Direct and Countercyclical Payments that were used under the 2008 farm bill have been eliminated. Producers will be permitted to choose between the new Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs that replaced the DCP program.

There are still a lot of details that have yet to be announced, including final timelines, but it is a good idea to go ahead and start collecting information for these decisions now. The general timeline I am hearing is that owners will have an opportunity to update program yields and reallocate base acres during the late summer and fall of 2014. Decisions on the ARC/PLC programs are likely to be required during late 2014 and early 2015. As far as the “Reported Commodity Crop History Summary” letter that the FSA sent out back in August, this information will be key in making decisions for 2014 and 2015. According to the Michigan State University Ag Extension, owners and producers should take the following steps as soon as possible to prepare for the new farm bill:

  1. Review the FSA letter and Reported Commodity Crop History Summary and inform FSA within 60 days of the letter’s date if the information is incorrect.
  2. Begin now to collect information on the farm’s actual planting history during 2009-2012 – how many acres of each crop were planted on the entire farm during each year from 2009-2012?) and the farm’s actual yield history (what was the yield per acre for each crop planted on the entire farm during each year from 2008-2012?). Evidence from all sources (sales receipts, crop insurance records, etc.) should be collected retained (NOTE: FSA has not yet announced the rules regarding the information required for program decisions. Consequently, all information that could prove helpful in proving actual planted acreage or actual yields could be helpful).
  3. Communicate with your tenants and/or your landlords. The upcoming decisions will affect the program benefits that a farm collects during 2014 to 2018. All parties have a common interest in making the best possible decisions for the farm, so good communication and cooperation between landlords and tenants will be beneficial for all parties involved.
  4. Stay informed about the upcoming deadlines for decisions in late 2014 and early 2015. Read all emails and newsletters from your local FSA office and consult with your local FSA office and with your tenants or landlords about these decisions.
  5. Be patient but be alert. The farm bill was passed by Congress and signed by the President at a relatively late date, and the FSA has a major challenge in implementing the new programs in the 2014 farm bill. Landlords will need to become informed about program options and key deadlines and cooperate with tenants. Tenants can often have numerous landlords that they will need to consult and enrollment dates could fall during peak work periods. The new programs are likely to require some complex decisions in late 2014 and early 2015. Landowners and tenants should stay informed about program deadlines and program options to cooperate in the best possible decisions for each farm.