USDA farm programs have significant changes for corn, soybeans and other crops as a result of the 2018 Farm Bill. This is a five-year farm bill, covering crop years 2019 through 2023. The program options differ from what was in the previous farm bill Congress passed in 2014.
Enrollment for the farm program in 2019 and 2020 is taking place now at local Farm Service Agency offices. Eligible farmers can choose between the Price Loss Coverage and Ag Risk Coverage programs for the 2019 and 2020 crop production years. Beginning with the 2021 crop year, you’ll be able to make an annual election between ARC and PLC program choices.
“We are reminding farmers that the ARC and PLC sign-up period ends March 15 for the 2019 crop and 2020 crop if you want to sign up for both years together. Or you can choose to sign up for the 2019 crop by March 15 and then you have until June 30 to sign up for the 2020 program,” says Amanda DeJong, state executive director for FSA in Iowa. “But don’t wait until the March 15 deadline. If you’ve decided which program you want to enroll in, visit your county FSA office now and get the process going. We want to avoid a last-minute rush.”
Now is decision time
FSA farm program specialists have teamed with Iowa State University Extension farm management specialists to hold information meetings for farmers across Iowa this winter. The meetings are well-attended.
“You can make your election now—decide whether you want to be in ARC or PLC,” says DeJong. “The next step is to choose the program options for each. You may want to choose ARC Individual Coverage (ARC-IC) as opposed to ARC County (ARC-CO) if you had a lot of prevented planting acres in 2019. However, you can change your mind between now and March 15. We are encouraging farmers to go to their FSA office now and sign up, to avoid the rush later as the March 15 deadline approaches.”
If something causes you to want to change your farm program decision prior to March 15, you can do so even if you’ve already signed up. “It’s a simple process and we can make the change quickly,” she notes.
Do you have to go to the FSA office to sign up for the farm program or can you do it online? “You have to come in and elect and enroll in person,” DeJong says. March 15 is also the deadline for farmers to sign up for crop insurance for 2020.
Making 2-year decision
If you come into the FSA office today, you can sign up for 2019 and 2020 farm programs at the same time. And whatever you choose for 2019, that’s going to be the program you are locked into for both 2019 and 2020 crop year.
“Once we get into 2021, 2022 and 2023, there’s more flexibility. Congress in the 2018 Farm Bill gave the FSA farm program the flexibility for producers to change their mind,” DeJong explains. “Producers can change farms and commodities back and forth to the different programs. This is a helpful option as it provides flexibility to producers in managing their risk.”
The ARC program choice includes both the county yield-based ARC-CO program choice and the ARC-IC program, which is based on farm-level yields. The PLC and ARC-CO farm program choice will be specific to each eligible crop on an FSA farm unit, and the choice can vary from farm unit for the same crop. The ARC-IC must be applied to all covered commodities on a given farm unit.
Crop base acres will remain at 2018 FSA levels for all crops on most farms. Producers will have the opportunity to update their FSA farm program payment yields beginning with the 2020 crop year. Yield updates will be based on the average farm yields for the 2013 to 2017 crop years on planted acres for eligible crops. The farm program yields are used to calculate PLC payments on FSA farm units.
Loans for propane tanks
In addition to farm program questions, farmers are asking about FSA loans for expanding grain storage facilities on the farm including adding a propane tank for fuel to use for grain drying. Fall 2019 was frustrating for farmers who needed to dry a wetter-than-usual corn crop coming from fields but couldn’t get the job done as quickly as necessary due to a propane shortage.
Where the spot shortages occurred, many farmers had to wait a week or more for their propane tanks to be filled so they could dry the grain. Harvest progress was held up and wetter-than-normal grain had to be held in bins, running the risk of lower quality and spoilage.
FSA has a loan program to help finance on-farm grain bins, dryers and related equipment, including propane storage tanks. FSA can make loans for purchase of both new and used propane tanks if the tanks are used for drying grain. You can’t use an FSA loan to buy a propane tank to heat your house. “But for grain drying and storage facilities, including propane tanks, we do have low-interest rate loans,” DeJong says. “It’s a nice option if a farmer is looking to expand on-farm grain drying and storage.”
FSA’s hemp program
Some farmers who are interested in growing hemp as a new crop to diversify their corn-soybean rotation with a potentially higher-value crop are asking how FSA farm programs will work regarding hemp. The Iowa Department of Agriculture has submitted a plan of proposed rules to USDA and is awaiting approval to allow hemp to be grown as a commercial crop in Iowa, starting with the 2020 planting season.
The Iowa Department of Ag will regulate the planting and growing of hemp in Iowa. FSA also will be involved with programs for this new crop. FSA will be taking acreage reports from farmers for hemp, starting in spring 2020, along with the acreage reports farmers provide FSA for crops such as corn, soybeans, forages, small grains and others.
USDA’s Risk Management Agency is offering crop insurance for hemp as part of whole farm coverage. “Also, FSA is going to have some loan programs that farmers are eligible to use for hemp production,” says DeJong. “I think these programs are going to continue to grow, as hemp acres continue to increase in the U.S. and eventually in Iowa.”
Help available to answer questions
If you have questions about making a farm program decision, visit your county FSA office for guidance and final instructions.
Also helpful is ISU’s Ag Decision Maker website. It has a farm program payment estimator tool, a PLC yield update tool, “and we’ve recorded 4 videos to help farmers who are considering ARC Individual Coverage or ARC-IC,” says Steve Johnson, ISU Extension farm management specialist. “This will help Iowa producers understand the ARC/PLC election and enrollment decisions that must be made by March 15.”
What does he think most Iowa farmers will do? “They will take PLC on corn base acres, and ARC-CO on soybean base acres,” Johnson says. “The payments that likely will be received will be for the 2020 crop. More acres will likely be planted in 2020 and we’ll likely see considerably lower prices for the 2019 crop than we saw for the 2019 crop.”
Do your homework; run the estimator, he adds. “Estimate your county yields for 2019 and 2020, and then determine what would be the best program choice by commodity crop, by FSA farm number. Use the tools on the ISU Ag Decision Maker website.”
Don’t forget the crop insurance supplemental coverage option, or SCO, is associated with PLC. If you take PLC on corn base acres, you can also buy the supplemental coverage option for the 2020 crop, Johnson says. “Discuss this with the staff at your FSA office, and with your crop insurance agent. You can buy SCO and you can update your PLC; do that this winter.”