*This is the third article in our 2024 Southwest Economic Outlook series. Hear from Oklahoma State University and OSU Extension Service, and Texas A&M University and TAMU AgriLife Extension Service economists about the 2024 outlook. 

A new farm bill hasn’t happened yet, and many farmers and ranchers are probably asking…now what? While a new farm bill with some much-needed enhancements is definitely necessary (more on that later), we wanted to ensure everyone knows that the 2018 Farm Bill was extended through Sept. 30, 2024. This means the safety net programs in the 2018 Farm Bill will still provide producers protection should low prices or incomes occur in the 2024 crop year. As in the past, producers will need to select ARC or PLC with FSA early in 2024. Crop insurance, which is authorized through other legislation, is available for purchase as always. Farm bill conservation programs like CSP, EQIP, and CRP – many of which were already reauthorized in the Inflation Reduction Act – are still available. 

A matter of time  

We feel it is important to make sure producers understand that while Congress has yet to pass the annual appropriations bills that fund the government for the full fiscal year (Oct. 1, 2023, to Sept. 30, 2024), it is just a matter of time, regardless of the apparent disarray in Congress. They will pass the appropriations bills and then turn their attention to passing a new farm bill.

Related:2024 may mark end of aggressive interest rate hikes

Why do we feel so confident? Because they always have, regardless of the amount of dysfunction they sometimes reveal. Similarly, the only real question is “when” we will get a new farm bill, not “if.” There are two windows where a new farm bill could likely be introduced, debated, and passed in 2024: the first few months of the year and after the November elections.

Again, if a bill hasn’t been passed when the current extension expires on Sept. 30, 2024, expect an extension or extensions until a new bill is passed. Over the last two decades, only the 2014 Farm Bill did not require an extension. Farm bill extensions are more normal than you think.  

A new farm bill critical

A new farm bill is going to be critical for producers in the Southwest. High input costs and forecasts of commodity prices coming down create a cost-price squeeze for row crop producers. An increase in reference prices used in the calculations of both ARC and PLC payments is incredibly important for producers in our region.

In addition, with crop margins being so tight, both House and Senate Agriculture Committee staff have been looking for ways to provide higher levels of affordable crop insurance protection that effectively shrinks the size of the deductible (the portion where the farmer bears the loss).   

Related:Are interest rate hikes in the rearview mirror?

While there are many other tweaks being considered, just these two changes would result in a much stronger safety net for producers that would help increase the likelihood of producers weathering the projected cost-price squeeze. 

 *This article is a combined effort by Joe Outlaw and Bart Fischer, both of Texas A&M University, and Amy Hagerman, OSU.