Signing up for the new government farm program as part of the new Farm Bill is going to be complicated and could take up to 6 months to complete. Sign up will be a 2 step process that will likely stretch well into 2015. Most Indiana farmers have received a letter from the FSA outlining that process. Step one is to update your yield and base acreage, something Jim Mintert with Purdue says producers should do, “We strongly suggest Indiana farmers take the opportunity to update their yields because most are getting higher yields than they current have on record with FSA.”
Mintert says the Purdue Center for Commercial Ag is recommending growers also take the opportunity to update their base acres, but admits this decision is a little less clear cut, “If you have been using the same corn and soybean rotation, then there may not be much change in your base. But, if in the past few years you have planted more corn than soybeans or wheat, then you may want to update your base to reflect more corn acres.” He said increasing your corn base may have financial advantages, “As we see it, there is likely to be more payments for corn under these new programs over the next 5 years, so a higher corn base would be financially advantageous.”
After you update your yield and acres, then it will be time to decide which
farm program best fits your operation. Mintert says not all the details of the programs have been announced yet, so it is hard to give specific recommendations to producers. Julie Wickard, with Indiana FSA, says the yield and base updates can begin this month but that program signup will not take place for several months, “We anticipate sign up beginning late this fall or during the winter months.”
While recommendations are preliminary, Purdue economists says most Indiana operations will find the Agricultural Risk Coverage-County Option the most favorable. Ag economists Michael Langemeier and Chris Hurt have published preliminary recommendations for Indiana growers:
“This new government program, also referred to as ARC-CO, currently has a higher probability of adding support to corn and soybean farmers, the economists said. They explained that under the current projections of above-normal yields, the program would begin making payments when the marketing year average of corn drops below about $4 per bushel. The payments would increase as prices drop to about $3.50 a bushel. At $3.75 a bushel, estimated Indiana average payments would be about $25 to $40 per acre of corn base, and at a $3.50 marketing year average price they would grow to the maximum of about $55 to $80 per acre. For soybeans with above-normal yields, ARC-CO payments might begin with a marketing year average price below about $10.60, with maximum payments occurring at a price of about $9.40. As an example, a $10 per-bushel marketing year average price would result in payments of about $20 to $30 per acre of soybean base. If prices fell to about $9.40, the payments would range from about $40 to $60 per acre.”
Langemeier and Hurt noted that the U.S. Department of Agriculture’s Farm Service Agency is still working out details of the program and that payments will vary from county to county. There are plenty of on-line tools to help, and there will be several seminars held this winter. Of course, your local FSA office is always there to answer your questions.