1. Making 2018 Farm Bill Decisions in 2020
Michael Langemeier & James Mintert
Center for Commercial Agriculture
Purdue University
Note author affiliations.

2. To Pose Questions During the Webinar
Go to Or use the Slido app on your smartphone Enter meeting #6508 Just type in your questions

3. Today’s Topics 2014 Farm Bill Review Projected Crop Prices
2018 Farm Bill Choices
2018 Farm Bill Tools
Farm Bill programming from the Center for Commercial Agriculture

4. 2014 Farm Bill Review

5. Summary
Most Indiana farmers chose ARC-County under 2014 Bill for corn and soybeans
Forecast was for higher ARC-County than PLC payments over the 5-year life of the Bill making decision easy for most farmers
Forecast was on-target for 2014 Bill, will it also be true for 2018 Bill choices?
Forecasts for 2014 Bill were keyed off of expectation for relatively high benchmark prices and revenues in 2014, 2015, and 2016
High benchmark revenues made larger payments likely
Situation is different for the 2018 Bill decisions to be made in early 2020…PLC Choice needs to be considered

12. Projected Crop Prices

13. Purdue Center for Commercial Agriculture

15. 2018 Farm Bill Choices

16. Program Choices Agriculture Risk Coverage (ARC) - County
Agriculture Risk Coverage (ARC) - Individual
Price Loss Coverage (PLC)
Choice will have to be made for each crop and FSA farm

17. Elements of the Decision
Decisions by FSA Farm
Decisions by Crop
Base Acres will not Change
Payments Will Be Made on Base Acres, not Planted Acres
Initial Decision for 2019 and 2020 Program Years
(Decision Deadline: 3/15/20)
Producers will make decisions for crop years at a later date

18. Elements of the Decision (continued)
If you choose PLC
Base yields on each FSA Farm Matter
FSA farm yields used to compute payments
Marketing year average U.S. prices used to trigger payments
Marketing years: corn and soybeans are both September through August
Payment Limits: $125,000 limit per payment entity

19. Yield Update Decision Options
Producers can (and should) update their FSA yields
Yield update based on covered commodities planted acreage & yields from to 2017
For corn and soybeans
Avg. of planted acreage x 90% x .9
For Wheat
Avg. of planted acreage x 90% x .9545
Decision to update is made by owner
operators or owners can provide yields
crop insurance records are a great source
subject to possible audit later, so records need to be maintained

20. Agricultural Risk Coverage (ARC) -County
Initial decision by crop for 2019 and 2020 program years
ARC-County payments occur when actual crop revenue is below the ARC revenue guarantee for a crop year
ARC-County guarantee is 86% of county ARC benchmark revenue
Coverage is capped at 10% of benchmark revenue
ARC-County benchmark revenue based on
Olympic average of trend adjusted yields ( initially)
And Olympic higher of U.S. crop year average price or reference price for proceeding 5 crop years
Payment is made on 85% of base acres

21. Price Loss Coverage (PLC)
Initial decision by crop for 2019 and 2020 program years
Payments occur if the higher of U.S. average market price for the crop year less than the crop’s reference price
Corn Reference Price = $3.70
Soybean Reference Price = $8.40
Wheat Reference Price = $5.50
Payment is made on 85% of base acres
Coverage is capped using reference price & loan price

22. Price Loss Coverage (PLC)
Supplemental Coverage Option (SCO)
Farms have option to purchase county level insurance
Coverage level cannot exceed the difference between 86% and the coverage level in the individual policy
Subsidy rate is 65%
SCO is not available if enrolled in ARC
If farmers choose PLC and their typical crop insurance coverage level is 80% or less, they should evaluate purchase of SCO with their crop insurance agent

23. What Are Big Differences Between ARC & PLC?
ARC-CO focuses on benchmark revenue; payments are capped at 10% of benchmark revenue
PLC designed to protect against larger revenue declines, but provides less “shallow-loss” protection than ARC-CO
2018 choices may differ from choices made in 2014
In 2014 most Indiana farmers chose ARC-CO for corn and soybeans
In 2020, many will find it attractive to make separate choices for corn (favors PLC) and soybeans (favors ARC-CO)

28. Farm Bill Decision Summary
Compare updated yields to existing program yields for each crop and FSA farm; update those crops with higher updated yields
Rare opportunity to update yields that farmers should take advantage of
Program Choice:
Corn and Wheat: start with PLC as your initial program choice and evaluate ARC-CO as a challenger
Soybeans: start with ARC-CO as your initial program choice and evaluate PLC as a challenger

29. Farm Bill Tools

30. 2018 Farm Bill What If Tool University of Illinois: farmdoc
Web Link:

31. 2018 Farm Bill What If Tool University of Illinois: farmdoc
Inputs:
State; County; Crop; Practice; PLC Yield
County Yield
MYA Price

33. Upcoming Farm Bill Programming from Center for Commercial Agriculture
Jan. 16th Farm Bill Choices Webinar
9:30 a.m. EST
Will be a joint webinar with FSA State Office staff joining us on the set
2 Regional Workshops
Jointly sponsored by Purdue Extension, FSA, Indiana Corn Marketing Council, Indiana Soybean Alliance and Indiana Farm Bureau
February 5 (Location TBD)
February 12 (Location TBD)