Extension and Outreach/Department of Economics 2014 Farm Bill: Overview ABA National Agricultural Bankers Conference Omaha, Nebraska Nov. 10, 2014 Chad Hart Associate Professor/Crop Markets Specialist
Extension and Outreach/Department of Economics Farm Bill Titles I. CommoditiesIX. Energy II. ConservationX. Hort. & Organic Ag. III. TradeXI. Livestock IV. NutritionXII. Crop Insurance V. CreditXIII. Commodity Futures VI. Rural DevelopmentXIV. Miscellaneous VII. ResearchXV. Trade & Taxes VIII. Forestry
Extension and Outreach/Department of Economics Farm Bill Projected Spending Projected Spending $489 Billion
Extension and Outreach/Department of Economics Old vs. New Direct Payments (DP) Countercyclical Payments (CCP) Marketing Loans (LDP) Revenue Countercyclical Payments (ACRE) Countercyclical Payments (PLC) Marketing Loans (LDP) Revenue Countercyclical Payments (ARC) New programs, but they have strong similarities to previous programs
Extension and Outreach/Department of Economics What Stayed the Same? Loan Rates Set by law Corn$1.95 Wheat$2.94 Soybean$5.00 Sorghum$1.95 Barley$1.95 Oats$1.39
Extension and Outreach/Department of Economics Livestock Livestock Indemnity Program (LIP) Compensates for mortality loss Livestock Forage Disaster Program (LFP) Compensates for grazing losses due to drought or fire Emergency Assistance for Livestock, Honeybees, and Farm-Raised Catfish (ELAP) Compensates for disaster losses not covered elsewhere
Extension and Outreach/Department of Economics Dairy Source: futurefordairy.com
Extension and Outreach/Department of Economics Conservation Conservation Reserve Program →27.5 million acres in 2014 →26 million acres in 2015 →25 million acres in 2016 →24 million acres in 2017 and 2018 →Grassland enrollment capped at 2 million acres Links conservation compliance to crop insurance premium subsidies
Extension and Outreach/Department of Economics Commodity Program Decisions Decisions for each FSA farm: 1.Programs yields (current or updated) 2.Base acres (retained or reallocated) 3.For each FSA farm/crop, which program will be used to make payments: –Price Loss Coverage (PLC) –Agriculture Risk Coverage – County level (ARC – County) –Agriculture Risk Coverage – Individual level (ARC – Individual ) * ARC-Individual applies to all crops and all farms in a state * SCO not available with ARC Timeframe: Decisions 1 and 2: Now to February 28 Decision 3: November 17 to March 31
Extension and Outreach/Department of Economics Base Acres Keep current base acres or do a one-time “reallocation” of base acres Reallocation allowed to covered commodities planted between 2009 and 2012 Reallocation in proportion to the ratio of 4-yr average plantings/prevented plantings Total number of base acres limited to total of existing base acres
Extension and Outreach/Department of Economics Payment Yields Keep current CCP payment yield or do a one-time “update” of payment yield on a commodity-by-commodity basis Update: 90% of yield per planted acre on the farm If the farm yield is below 75% of the average county yield, then the farm yield is replaced by 75% of the average county yield
Extension and Outreach/Department of Economics Online Farm Bill Analysis fsa.usapas.comusda.afpc.tamu.edu
Extension and Outreach/Department of Economics Thank you for your time! My web site: Iowa Farm Outlook: Ag Decision Maker: