Ag Policy Blog

USDA Not Ready for Farm Bill Timelines

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Coming off the federal government shutdown that consumed the month of January, USDA's Farm Service Agency isn't ready to detail dates for possible changes in programs such as Agricultural Risk Coverage and Price Loss Coverage, or the new Dairy Margin Coverage.

"We've got some changes to a lot of our programs," said Richard Fordyce, administrator for USDA's Farm Service Agency. "What we're trying to do right now is prioritize the things that need to be done. Right now, across all of those programs we have not come up with any dates at this point, but we are actively working on the farm bill and the different aspects in our shop."

"We just don't have a date or dates yet across any of the programs," Fordyce said.

Fordyce expects to start setting some dates soon and cited decisions that need to be made in the Dairy Margin Coverage program, as well as the Conservation Reserve Program.

Getting staff up speed on changes also demands software updates and amendments as well. FSA has more than 2,100 county offices and some counties can have 2,000 or more ARC-PLC contracts. "The IT requirements to administer one of these programs is enormous," Fordyce said.

Once USDA gets its program dates moving, farmers will be allowed to switch enrollment for ARC and PLC for 2019. After 2021, farmers will be allowed annually to switch back and forth between the two programs. USDA also will allow Price Loss Coverage yield updates nationally in 2020 for all crops.

The base reference prices for corn ($3.70 a bushel), soybeans ($8.40) and wheat, ($5.50) and other commodities remain the same as the 2014 farm bill, but the new farm bill also creates a five-year Olympic formula that would allow reference prices to move upward as much as 15%. Under the right conditions, that could bump up the corn PLC price to $4.26 while the soybean reference price would move to $9.66 and wheat would go to $6.33.

Those higher reference prices would be used in both PLC and ARC calculations.

The farm bill makes some other changes to ARC, including a trend-yield adjustment and a provision that allows USDA to divide some of the largest counties in the country into smaller units for county average yields.

Conservation Reserve Program acreage will be increased from 24 million acres to 27 million acres, but rental rates will be lowered to 85% of the average county rental rate for general signup and 90% of the average county rate for continuous signup. USDA's National Agricultural Statistic Service will be required to update rental rates annually under the bill. However, the first boost of 500,000 acres should start in fiscal year 2020.

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