THIS year’s farm bill offers several key considerations for producers to take on whether to update base acres and yields. It also will be important to consider expected payments from the Agricultural Risk Coverage – County Option (ARC-CO) and Price Loss Coverage (PLC) programs.
The 2014 Farm Bill Tools: Base Acre Reallocation and Yield Updating Tool and the 2014 Farm Bill Tools: ARC-COPLC Tool spreadsheets are available for download at www.farmdoc.illinois.edu/fasttools/index.asp.
For the Base Acre and Yield Updating decision, the following inputs are needed for a Farm Service Agency (FSA) farm:
1. 2014 base acres. These are the current base acres on the farm. These will be the base acres for the farm if acres are not reallocated.
2. 2014 CC yields. These yields will be the program yields for determining PLC payments, unless yields are updated to 90% of average yields from 2008 to 2012.
3. Planted, prevented, double and subsequent acres for 2008 through 2012. These acres determine a) reallocated base acres by crop and b) whether yields for an individual year enters into yield updating.
For each FSA farm, there will be two alternatives: keep retained acres as reported in the summer letter you received from FSA or reallocate base acres based on the proportion of plantings in program crops from 2009 through 2012. The spreadsheet will compare the two alternatives and the allocation with the highest expected payment usually should be selected.
Related: Farm bill decisions loom March 31
As for updating yields, the tool helps users evaluate whether keeping the current CC yield or updating the yield to 90% of average yields from 2008 to 2012 is preferred. In general, the highest yield should be selected, but different choices could be made for different crops. This only impacts those who choose the PLC program, but it is advised to update yields even if ARC is chosen because of the potential impact on future farm bills.
The program also compares expected payments under retained or reallocated base acres using per acre expected payments from USDA’s Agriculture Policy Analysis System (see below.)
Economists who helped design the tool said many comparisons of expected payments for Midwest farms with corn, soybeans and wheat found that the allocation with the lowest number of soybean acres results in the highest expected payments.
We're featuring the spreadsheet as our Farm Futures Financial Tool-of-the-month. Do you have a financial tool that's made a difference on your operation that you'd be willing to share with other readers? Drop us a line at FarmFutures@farmprogress.com with a description of the spreadsheet. We'll pay $100 if we feature your farmer-written noncommercial program as our Financial Tool of the Month.
Your guide to Farm Bill tools
University experts have been going all out to help producers decipher one of the most difficult decisions ahead with the farm bill program sign-ups.
You can find a suite of integrated tools at usda.afpc.tamu.edu to help you make the choices required for participation in the 2014 Farm Bill and crop insurance decisions. This decision aid tool includes yield update base acre reallocation, Agricultural Risk Coverage (ARC-Co & ARC-IC), Price Loss Coverage (PLC), and Supplemental Coverage Option (SCO).
You must register an account with name, email address and password. Then it will require you to set up an account type – either a producer/farmer or multi-client user. The multi-client option allows producers to create as many clients as wanted and keeps each client’s data separate. The client can later enter their own password to access the account.
Other Farm Bill Website resources include:
- The National Coalition for Producer Education (fsa.usapas.com).
- University of Illinois (farmbilltoolbox.farmdoc.illinois.edu)
- Ohio State University (aede.osu.edu/research/crop-program-decisions)
- Kansas State University (www.agmanager.info/policy/commodity/2012)
- Farm Futures farm bill decision survey data