By Stanley Moore, Roger Betz and Jim Hilker
A year in the making, we finally have the field crop commodity section of the national farm bill program ready for producer participation. To help farmers navigate the best plan for their farm, Michigan State University Extension and the USDA Farm Service Agency have teamed up to offer meetings throughout Michigan this winter.
A normal farm bill process would have had producers signing up for the 2019 crop year last March, but because of the delay in implementation, farms will be signing up for the 2019 and 2020 crop years almost concurrently.
This delay benefits farmers in that it makes the 2019 crop year decision much more informed and has a direct effect on your choice between the Agricultural Risk Coverage program versus the Price Loss Coverage program.
The ARC program provides revenue-based payments when farm revenue falls below a “coverage guarantee” level. The PLC program provides price-based payments when prices are less than the “reference price” level and uses an individual farm’s PLC yields to determine the payment rate.
This five-year farm bill provides a one-time opportunity to update a farm’s PLC yields (to be used for the 2020-23 program years). Updates will be based on the farm’s yields for 2013-17. Livestock producers will need to work with their local FSA office to estimate yields for 2013-17.
If the updated yields are lower than a farm's previous PLC yields, farms can stay with their previous yields. When choosing the PLC program for a particular crop, a few bushels yield increase in your farm’s PLC yields can make a significant difference if there is a payment made because of depressed prices.
Another change in this farm bill is that producers will be able to make a yearly choice between ARC and PLC (after the initial sign-ups for the 2019-20 years). The choice between ARC and PLC is made by each farm number and by crop base acres associated with each farm number.
Current price and yield data would suggest that your decision between ARC and PLC may very well be different for different crops and farms. Keep in mind that the 2018 Farm Bill makes payments based on the county where the farm is located, so you may need to check with your local FSA office if you have fields in more than one county.
In addition, a producer’s risk tolerance will factor into their choice of ARC vs. PLC, and what other crop insurance tools they may be using for their farm.
Roger Betz, MSU farm business management educator, has developed a spreadsheet to help producers make the decision between ARC and PLC by crop and farm. The decision tool has built-in information from each county and helps farmers make decisions for each individual farm for corn, wheat and soybeans. The ARC-PLC calculator can be found at canr.msu.edu/farm_management.
Final decisions on ARC vs. PLC must be completed by March 15, but producers should sign up, update their yields and make their initial election decisions now. Farmers will want to visit their local FSA to sign up their farms that have historically produced corn, wheat, soybeans, other oilseed crops, oats, barley and grain sorghum, and have an established base for these crops.
You can change your choice until March 15. If you miss this date, you will not be able to enroll and will not receive any potential payments for the 2019 crop year and will be defaulted to the previous 2014 decision for the 2020 year.
MSU Extension has partnered with local FSA offices to offer multiple farm bill meetings across Michigan.
At these meetings, producers will:
- Hear highlights of the 2018 Farm Bill and assessments of today’s market compared to five years ago.
- Learn about the process of updating their yields with FSA.
- Work through case examples using the MSU Extension 2018 Farm Bill calculator to help make better decisions on ARC vs. PLC. (Each crop and FSA farm number may result in a different choice.)
- Discuss specific program details with local FSA staff.
Speakers include both MSU specialists and educators, as well as your local FSA staff. For a complete listing of locations, dates and times, visit events.anr.msu.edu/farmbill.
The remaining meetings include:
Eaton County. 9 to 11 a.m. Jan. 10, Eaton County MSU Extension Building, 551 Courthouse Drive, No. 1, Charlotte
Hillsdale County. 9 to 11 a.m. Jan. 14, Hillsdale ISD Hayes Administration Building, 310 W. Bacon St., Hillsdale
Jackson County. 6 to 8 p.m. Jan. 14, Jackson Area Career Center, 6800 Browns Lake Road, Jackson
Midland County. 2 to 4 p.m. Jan. 16, Mount Haley Township Hall, 3020 S. Homer Road, Midland
Ogemaw County. 1 to 3 p.m. Jan. 21, Ogemaw County MSU Extension Building, 205 S. 8th St., West Branch
Antrim County. 9 to 11 a.m. Jan. 22, 6520 Center St., Ellsworth
Presque Isle County. 2 to 4 p.m. Jan. 22, Case Township Hall, 5561 Main St., Suite 5, Millersburg
Huron County. 2 to 4 p.m. Jan. 23, Farm Bureau Building, 711 N. Van Dyke Road, Bad Axe
Tuscola County. 6 to 8 p.m. Jan. 23, Tuscola Technology Center, 1401 Cleaver Road, Caro
Calhoun County. 2 to 4 p.m. Jan. 27, Calhoun Career Center, 17111 G Drive N., Marshall
Moore, Betz and Hilker write for Michigan State University Extension.