Farm Bill Decision Information


Farm Bill Decision Information
Jenny Rees, Extension Educator York & Seward Counties

*Caveat: This information is shared with the intent to better help growers make farm bill decisions with the best information we have available at this time. There is no guarantee of program payments or how the information below impacts individual farms. Ultimately, the decision is that of the person enrolling and making the program elections for the Farm Bill.

Deadline: Growers should make appointments now at your local Farm Service Agency (FSA) office to complete ARC/PLC election and enrollment forms. The deadline to enroll is Monday, March 16 for the 2019 crop year. You can change your elections up to March 16, 2020. Growers who don’t get enrolled by then will be ineligible to receive ARC or PLC payments for the 2019 crop year.

ARC-CO vs. PLC: This decision is different than the 2014 Farm Bill. We’re in a different price situation (lower prices) and the decision right now for 2018 Farm Bill is a 2-year decision (2019-2020), not the life of the farm bill. Please don’t assume that you should stay enrolled in what you were before.

Working through farm situations from different counties, for corn, PLC tends to be favored more than ARC-CO regardless if the farm had more irrigated or non-irrigated acres. However, soybean tends to favor PLC for a higher irrigated percentage and ARC-CO for farms with little to no irrigation. This does vary by county, so soybean can go either way. The reality is there may not be a soybean payment for either election. Wheat and sorghum tend to favor PLC. You’re only making this decision for two years. You can change your decision for 2021.

ARC-CO Calculation: To understand what potential price it may take for ARC-CO to trigger for any crop in your county, there’s a simple calculation you can do. Ask your local FSA Office for their 2019 Guaranteed Revenues and 2019 Benchmark Yields for each crop (updated February 2020).

Take your county guaranteed revenue for a specific crop and divide that by the county benchmark yield for that crop. For example, for irrigated corn in York County, the 2019 Guaranteed Revenue was $731.07. The 2019 Benchmark Yield (which is an Olympic average yield from 2013-2017) for irrigated corn in York County was 229.75 bu/ac. Taking $731.07/229.75 = $3.18. Based on these numbers a payment would not be triggered for irrigated corn in York County until a price of $3.18 is achieved. This is in comparison to PLC in which the trigger is $3.70 for the corn price (and we’re a lot closer to $3.70 than $3.18). Many of the counties for this area of the State were coming in at $3.18 corn price (irrigated and non-irrigated) in order for ARC-CO to trigger. This helps with decision making as it leans towards enrolling in PLC for corn. You can use this same calculation for other crops such as soybean, wheat, sorghum, etc. and compare the prices obtained vs. the PLC price for that crop.

PLC Yield Update: Your local FSA office can provide a sheet showing what yield is necessary to update your PLC yield for each crop. This can also be determined by taking your current PLC Yield and divide by 0.81. For example, a PLC corn yield of 190/0.81=234.57 bu/ac. Crop Insurance forms are necessary to determine if you can update yields. You will need the yields from 2013-2017. Use the Actual yields (designated with an ‘A’, not APH yields). Take the irrigated and non-irrigated yields for each farm number and divide by total acres to determine the blended yield for each farm number. If the yield is equal to or greater than the yield you need to prove for any of your crops on each farm number, your PLC yield can be updated for that crop. Landlords need to sign the form for updating PLC yields. They do not need to sign the form for election of ARC-CO or PLC if the ground is in cash rent.

Seed Corn Yields: To determine seed corn yields, if no commercial corn is grown in rotation on the farm, use the Plant Base Yield (PBY) not to exceed 120% of the county irrigated corn yield. For example, in 2013, York County Irrigated Corn Yield was 235.92 bu/ac. Multiply this by 120% = 283. 10 bu/ac. Compare this to the PBY for the same year and use the lower of the two numbers. If the farm has commercial corn in addition to seed corn in the rotation, the grower has the choice of applying the commercial corn yield or the equivalent seed corn yield as explained previously.

Decision Support Tools: If you use a decision support tool, I’m not recommending to use the Illinois tool. The Texas A&M tool considers your two-year decision. This blog post (https://go.unl.edu/texasam) has step-by-step screen shots to help if you wish to use the tool.

Historical Irrigated Percentage (HIP) is taken into account for the ARC-CO payments. For those using the Texas A&M decision tool, you will see a box to input HIP. There is an area for HIP on the 156EZ form. Counties that had to split out irrigated vs. non-irrigated acres for certain crops in the 2014 Farm Bill will have a HIP listed. Counties that didn’t have to do this will not have one listed. For those with the HIP listed, it may or may not be accurate depending on if you incorporated/lost irrigated ground in the past 5 years. For purposes of the Texas A&M tool, you can use your best estimate of irrigated vs. non-irrigated percentage. You can also adjust that estimate to see how it impacts potential payments.

 

About jenreesources

I'm the Crops and Water Extension Educator for York and Seward counties in Nebraska with a focus in irrigated crop production and plant pathology.

Posted on February 16, 2020, in Farm Bill and tagged . Bookmark the permalink. Leave a comment.

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