Farmers reallocation, updates and program elections nearing
Deadlines to enroll in new Farm Bill programs are just down the road, and representatives from local Farm Service Agency offices are spreading the word to producers and landowners.
“If a landowner or producer is participating in FSA programs, they need to come in and decide whether to re-allocate or retain their base acres, update or retain yields and make a program election,” said James Jordan, FSA county executive director in Evangeline Parish. “If they do not come in, farms will default to the Price Loss Coverage program, and old yields and base acres (which participating producers and landowners provided during the previous 2009-2012 Farm Bill years) will be retained.”
Covered commodities under the 2014 Farm Bill are barley, canola, large and small chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long grain rice, medium grain rice (which includes short grain rice), safflower seed, sesame, soybeans, sunflower seed and wheat. Upland cotton is no longer considered a covered commodity, and cotton acres are now listed as generic base acres. Producers can still receive payment for cotton under PLC or Agricultural Risk Coverage if those acres are planted to a covered commodity.
The deadline to sign up for Base Acreage Reallocation and Yield Update is Feb. 27, and the deadline for Program Election is March 31. Either producers or landowners can file the base acre allocation or yield update, but at least one landowner must sign off on the updates. For program election, all producers on a farm must agree to the program election.
With base acre reallocation, producers and land owners can retain or update the base acres, the average of the amount of acres of a commodity planted over five years, and the updated base acre amount will be effective during the duration of the farm bill.
“Farmers can reallocate those acres to another commodity, but they cannot just decrease or increase the total acreage on the farm,” Jordan said. “If a farmer purchases land with established base acres, that land will be considered another farm. There could be a decrease in acreage if the land is sold and the base acreage goes with it.”
“The feedback I am getting from farmers is that changing the base acre allocation can help them to get payments in the Farm Bill programs.”
According to Jordan, the majority of farmers and landowners he talks to are thinking about updating, but when they come in to the FSA office, the county director is seeing a little bit of everything.
“We have some who are reallocating and some who are keeping it the same,” he said. “It’s situational on every farm.”
“The commodity base you have on a farm can predict future payments from Farm Bill programs. Those who are reallocating or staying the same say they are trying to retain rice acres because historically rice has paid well in the FSA programs, but we don’t know what the future will bring.”
Next, farmers and landowners can update their yields by bringing in production records from 2008-2012.
“By updating the yield, farmers and landowners have a better chance of obtaining Farm Bill benefits,” Jordan said. “Once the yield is calculated, it can help increase payments through Farm Bill programs.”
Finally, farmers can complete program election for coverage, and the three plans are Price Loss Coverage, Agricultural Risk Coverage Individual and Agricultural Risk Coverage County. Producers make a one-time election with each commodity for the 2014 through 2018 crop years with PLC and ARC-CO but not with ARC-IC.
PLC program payments are issued when the effective price of a covered commodity is less than the respective reference price for that commodity. The reference price is set in the Farm Bill and will not change through 2018.
“A lot of analysts are telling us PLC is good for rice base in south Louisiana,” Jordan said. “The market year average price is predicted to be very low. It’s selling at roughly $19 a barrel. The price has been low in the last year, and it looks like this will trigger payments for them in 2014, for rice.”
Under the ARC-IC program, loss payments are made when the current year’s revenue for all covered commodities planted on the farm falls below 86 percent of the farm benchmark revenue.
“Not many people are signing up for ARC-IC because you have to compile all of your farm data together, and it represents one enterprise,” Jordan said.
ARC-CO payments are issued when the actual county crop revenue of a covered commodity is less than the ARC-CO guarantee for the covered commodity.
“So far, most farmers are mostly signing up for PLC and ARC-CO,” Jordan said. “Some are doing both. You can elect a program for each commodity with PLC and ARC-CO but not with ARC-IC.”
“With ARC-CO, some are putting their bean base into ARC-CO because they do not predict beans to be paid through the PLC program in the upcoming year. For beans to be paid in PLC program, the effective price has to go below $8.40 a bushel (a national number set by the U.S. Department of Agriculture for the 2014-2018 crop years). Some are predicting, hoping, beans won’t go below that thru 2018. They are taking that chance to put in ARC-CO instead of PLC.”
Payments for all three plans are issued at the end of the respective crop year for each covered commodity, but not before Oct. 1. Program payments for last year will not be issued until after Oct. 1 of this year. While there is no cap on PLC payments, payment through ARC-IC is capped at 10 percent of farm’s benchmark, and payments through ARC-CO may not exceed 10 percent of the ARC-CO guarantee price multiplied by the ARC-CO guarantee yield.
Farm owners and producers can access online resources at www.fsa.usda.gov/arc-plc. Area FSA offices are located at 5832 I 49 N Service Rd. in Opelousas and 205 Court St. in Ville Platte. The Opelousas office telephone number is (337) 948-8288, and the Ville Platte office number is (337) 363-6602.
Several agriculture specialists and researchers spoke with famers and land owners in January during the 55th annual Rice Production School and 47th annual Soybean Production School at the Ville Platte Civic Center. The event was hosted by the LSU AgCenter.
Mike Salassi, an agriculture economics professor at Louisiana State University, talked to the group of about 60 people regarding the rice and soybean market outlook.
“The markets for rice and soybeans both look pretty good,” Salassi said. “The U.S. rice acres were up in 2014 to 2.9 million acres, mainly because of a 400,000 acre increase in Arkansas. The medium grain market is pretty stable, but there has been a price drop in long grain due to increased production.”
According to USDA figures, the top rice-producing states for 2014 were Arkansas, California and Louisiana, in that order. National soybean harvest and yield figures set records last year with 83 million acres harvested and about 47.8 bushels harvested per acre.
“The Louisiana soybean yield has been going up since 2010,” Salassi said. “It’s a good year across the state and country for yield, and domestic use is slightly above the export.”
The state average yield for soybeans in 2014 was about 57 bushels per acre.