University of Georgia Extension and Farm Service Agency staff are traveling across Georgia this week to bring farmers up to speed on the new farm bill and the decisions producers and landowners must make to participate in programs under the new bill. Meetings kicked off Dec. 12 at Fort Valley State followed by stops in Tifton and Bainbridge on Dec. 15, stops in Dawson and Quitman on Dec. 16, Vidalia and Waynesboro Dec. 17 and continue Dec. 18 with stops in Cartersville and Hull and end Dec. 19 in Alma. Visit http://tinyurl.com/fbinfomtgs for more information about the Dec. 18 and 19 meetings. Georgia Farm Bureau was one of the sponsors for these meetings.
Speaking at the Dec. 12 meeting in Fort Valley, David Forbes with the Georgia Farm Service Agency (FSA) office said the new farm bill gives farm owners a one-time opportunity to keep a farm's base acres as they were on Sept. 30, 2013, or reshuffle crop base acres to reflect what has been grown on the farm between 2009 and 2012.
"You can't increase or decrease bases on a farm but you can shuffle them among covered commodity crops based on percentage of acreage you planted on the farm during the base period," Forbes said.
Covered commodity crops include wheat, barley, oats, peanuts, corn, grain sorghum, soybeans, dry peas, lentils, large and small chickpeas, sunflower seed, canola, flaxseed, mustard seed, rapeseed, safflower, crambe and sesame seed. Under the new farm bill cotton base is referred to as generic base and is handled separately.
Farmers have until Feb. 27, 2015, to reallocate their base acres and to update their yield histories for crops grown on their farms. Producers and landowners were sent letters in September from the FSA providing the base acre allocations and yield histories the agency has on file for farms.
Forbes urged multiple owners of the same farm to reach a unified decision regarding base acre allocation and yield updates and to only file one base reallocation and yield update per farm with FSA. If farm owners don't reallocate their base acres by Feb. 27, 2015, then base allocations will be set as they were as of Sept. 30, 2013, Forbes said.
"I highly encourage you to look at the yields you carry on your 156-form. Your yields need to be updated to reflect what's currently happening on your farm," Forbes said.
After farmers update their base acres and yield histories, they must decide whether to participate in the Price Loss Coverage (PLC), Agricultural Risk Coverage-County or the Agricultural Risk Coverage-Individual (ARC) programs by March 31, 2015, UGA Extension Economist Nathan Smith explained. If producers don't make a choice by the deadline then no ARC or PLC benefits will be available for 2014, and PLC is the only remaining option for 2015 and beyond. The program choice stays with the farm even if a producer doesn't.
After farmers choose the program they will participate in for the life of the farm bill, they will be required to re-enroll in the program each year.
The PLC program is a price-based safety net that protects against "deep losses" due to price declines. Producers will receive a payment if the national average marketing year price of a covered commodity is less than the reference price stipulated in the farm bill. Reference prices for the major covered commodities grown in Georgia are as follows: peanuts $535/ton; wheat $5.50/bushel; corn $3.70/bushel; sorghum $3.95/bushel; soybeans $8.40/bushel; other oilseeds $20.15. The PLC payment will equal the maximum of either the reference price minus the average marketing year price or the reference price minus the loan rate. The payment will be on 85 percent of base production (base acres X program yield) for the crop.
The ARC-County program is a revenue-based safety net program based on county yield averages while the ARC-Individual program is a revenue-based safety net program based on individual farm yields. With the ARC-County option, crop revenue will be estimated using average county yields. Farmers will receive payments if the ARC-County actual crop revenue is less than the ARC-County revenue guarantee.
Under the ARC-Individual option, farmers will receive payments if the actual revenue from all covered commodities is less than the ARC-Individual guarantee. Smith said the ARC-Individual program is not really written for Southeast farms but written more for farms in the Northern Plains.
"It really depends on what you think prices are going to do as to which program you signup for," Smith said. "The PLC program will pay more on peanuts than ARC-County in most cases. For corn, soybeans and wheat it's uncertain, but if you think prices will fall below the reference prices then you probably want to look at PLC because it will be better protection to cover low prices. If you think prices will stay above reference prices, then you'll want to look at the ARC-County program. If you want to buy Supplemental Coverage Option (SCO) then you'll want to choose ARC-CO because you're not eligible to buy SCO under the PLC program. "
SCO is a new crop insurance supplement that gives farmers additional coverage for a portion of deductibles associated with polices purchased in the PLC program.
Smith recommended farmers use one of two farm bill decision aids to crunch their farm numbers to decide which program to enter their farms into. The Texas A&M tool is available at https://usda.afpc.tamu.edu. The University of Illinois tool is available at http://fsa.usapas.com.
UGA Extension Economist Don Shurley gave an overview of the new Stacked Income Protection Plan for cotton (STAX). Shurley said STAX is a revenue policy that pays based on yields in the county or area in which the farm is located rather than individual farm yields. Farmers will still be able to carry crop insurance policies on their cotton crop that will pay based on individual farm yield called companion policies. Cotton is not eligible to be enrolled in the PLC or ARC programs.
"STAX attempts to cover some of what we call shallow losses," Shurley said. "You could have a loss on your farm and your individual companion policy will kick in and pay for you but countywide yields did better so STAX won't pay you. STAX is made to fit on top of your companion policy."
Shurley also explained that under the new farm bill producers may annually reallocate their generic base among covered commodities (peanuts, wheat, soybeans, corn, etc.).
"You don't want to leave your generic base underutilized if you can help it. To the extent you can, within reasonable crop rotation, try to utilize your generic base to plant more acres of other crops," Shurley said.
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