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Quick points on cotton and new farm billQuick points on cotton and new farm bill

The new farm bill of 2014 will change much of how federal agriculture programs operate, including the cotton programs.

Farm Press Staff

February 6, 2014

2 Min Read

The Agricultural Act of 2014 will change much about how the federal government handles agriculture programs in the future. But what are its changes, or impacts, relating to cotton?

Don Shurley, cotton economist with the University of Georgia Cooperative Extension, highlights a few cotton-related points as the new farm bill eases into law:

  • The DCP are ACRE programs are eliminated.

  • Cotton will have a new “safety net” program called STAX (Stacked Income Protection Plan) beginning with the 2015 crop year.

  • Because STAX will not be available until 2015, cotton will receive a “transition assistance” payment for 2014. The Act does not specify the amount of the payment but does define how the payment is to be calculated. That definition and the resulting calculation is 9 cents per lb. The payment will be received on 60 percent of Base Acres.

  • All other covered commodities (corn, peanuts, soybeans, wheat, etc.) will have Price Loss Protection (PLC) or Agricultural Risk Coverage (ARC) beginning with the 2014 crop year.

  • Producers will have a 1-time opportunity to elect PLC or ARC on a farm by farm, crop by crop basis. If choosing ARC, producers must then also choose between County Coverage or Individual Coverage.

  • The Marketing Loan program including LDP’s and MLG’s continues to operate as it has under the 2008 farm bill. The Loan Rate on cotton is changed, however. The Loan Rate will be the average Adjusted World Price (AWP) for the previous 2 crop years but not more than 52 cents per pound and not less than 45 cents per pound.

  • Producers will have opportunity/may elect to update or “reallocate” crop bases on a farm. Cotton base is retained—but all other crop bases may be updated based on the 4-year (2009-2012) average of acres planted.

Check current cotton futures prices


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