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New Farm Bill Includes New Programs For Farmers
OZARK, MO.
The 2014 Farm Bill contains provisions that many southwest Missouri farmers – crop, livestock, and dairy – should consider to help manage their risk.
The alphabet soup of farm program provisions replaces all of the direct payment crop programs with new risk management tools and offers new risk management tools to livestock and dairy producers.
“The important thing that all producers need to know is, that in some cases, if they fail to visit their USDA Farm Service Agency (FSA) office and sign up before the deadlines, they may be leaving money on the table that they may otherwise would have been eligible to receive because some of these programs are retroactive to as far back as 2011,” said Dr. Gordon Carriker, University of Missouri agriculture business specialist headquartered in Christian County.
“One interesting aspect of many of the Farm Bill's new crop and livestock programs is that they perform very similar to insurance,” said Carriker. “Nobody wants to receive an insurance indemnity payment that is triggered by a loss, but it is nice to know that a safety net is there just in case. In fact, the new crop programs are commonly being referred to as safety net programs.”
FOR DAIRY FARMERS
The Dairy Margin Protection Program (MPP) is a voluntary program that replaces the Milk Income Loss Contract (MILC) program. This provides income protection to dairy producers when the “margin” (difference between the all milk price and average feed cost) drops below a dollar amount (between $4 and $8 per hundred weight) chosen by the producer.
By signing up for this program and paying the $100 administrative fee, dairy producers automatically receive the Catastrophic Coverage (CAT) level of $4 margin coverage at 90 percent of their established production history. Additional protection can be purchased for increased production history (between 25 and 90 percent) coverage and the higher margin coverage levels (greater than $4).
The most recent deadline has passed, however dairy producers should not wait until the last minute next year to go to their FSA office because they will need to establish a production history prior to choosing a coverage level. There are some restrictions for dairy producers who are already participating in the Livestock Gross Margin for Dairy program offered through the USDA Risk Management Agency.
FOR LIVESTOCK FARMERS
The Livestock Forage Disaster Program (LFP) is a permanent provision of the 2014 Farm Bill that offers compensation to livestock producers who suffer grazing losses for covered livestock on pastureland due to drought.
Covered livestock include beef, diary, buffalo/beefalo, sheep, goats, deer, equine, swine, elk, poultry, reindeer, alpacas, emus and llamas that are produced for commercial farming purposes, this excludes recreational, hunting, roping, and show use among others.
The sign-up deadline for the LFP is January 30, 2015, for losses incurred since October 2011 through the end of 2014.
“It is easy to say that many Missouri livestock producers suffered eligible losses during the summers of 2012 and 2013,” said Carriker. “The LFP can help offset those losses retroactively.”
There is a $125,000 limit on payments from the LFP for each program year; payment eligibility is also restricted to individual farmers or legal entities with average adjusted gross incomes of less than $900,000.
FOR CROP FARMERS
Direct payments for program crops were eliminated in the 2014 Farm Bill. Crop producers now can participate in the Price Loss Coverage (PLC) program or Agricultural Risk Coverage (ARC) programs.
These programs differ from the direct payment programs, where farmers received payments in good and bad years, by providing farmers risk management tools to choose from that best meet their specific farm business risk situation.
Depending on the program chosen, farmers can protect themselves when market forces result in significant drops in crop prices and/or revenues.
The PLC program provides farmers with protection from price drops below the crop reference price. The ARC-CO provides farmers with protection from county-based crop revenues below the county revenue guarantee. The ARC-IC provides farmers with protection from individual farm-based crop revenues below the individual farm revenue guarantee.
Farmers should follow a three-step process to participate in the 2014-15: update, elect, and enroll. Farmers will have the opportunity to reallocate their base acreage and/or update their program crop yields prior to February 27, 2015. Once acreage and yields have been updated, farmers will have until March 31, 2015 to elect the PLC or ARC programs. Farmers will have between mid-April through the summer of 2015 to enroll.
“An important aspect of the Update and Elect steps is that those decisions will last for the life of the Farm Bill, through 2018. However, farmers will have the option to enroll each year,” said Carriker.
Failure to elect a program will result in a default to the PLC program for 2015 through 2018 and forfeiture of any payments for the 2014 crop.
“The 2014 Farm Bill asks producers to make some very important and difficult decisions,” said Carriker, “MU Extension has partnered with the USDA FSA, Missouri Corn Growers, Missouri Soybean Growers, Missouri Farm Bureau, and FCS Financial to offer educational meetings throughout the state to help producers evaluate their options.” Farmers should check with their local USDA FSA office to find out the date(s) of nearby meetings
MORE INFORMATION
For more information about the crop and livestock provisions of the 2014 Farm Bill, or upcoming educational programs to help farmers understand their options, contact Dr. Gordon Carriker at 417-581-3558 or by email at carrikerg@missouri.edu or visit the nearest local USDA FSA office. ∆
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