Doubting Yield for ARC-County

North Dakota Questions Record Yield Costing Millions in Payments

High county yields can put farmers in that county out of the range for Agricultural Risk Coverage-County payments. (Courtesy graphic)

OMAHA (DTN) -- The Farm Service Agency is receiving more questions and challenges regarding county yields as farmers discover their commodity payments for 2014 aren't what they expected.

One of the most damaging issues facing producers in the Agricultural Risk Coverage-County program is when USDA declares a record county yield. High county yields can put farmers in that county out of the range for ARC-County payments.

It also raises questions about how the Farm Service Agency came up with that county yield, especially if there weren't enough voluntary yield surveys returned to the National Agricultural Statistics Service.

Sen. John Hoeven, R-N.D., and House Agriculture Committee ranking member Collin Peterson, D-Minn., have both raised concerns that farmers' failure to answer voluntary questionnaires has resulted in the farmers getting no payments or lower payments than they should under the new farm bill.

At issue in North Dakota is LaMoure County where the Farm Service Agency listed a 165-bushel-per-acre corn yield for 2014. That yield, a record in the state, translated into corn farmers getting zero ARC-County payments for 2014.

Dale Ihry retired from FSA in North Dakota on Oct. 16, and took over as executive director of the North Dakota Corn Utilization Council shortly after. Ihry said the state FSA committee should be allowed to use data from nearby counties which would drop the yield to around 150 bushels per acre. The state committee put in such a request in October, but the national Farm Service Agency office has not given the state committee authority to adjust those yields.

"What needs to be done is my former organization on the national level needs to allow the North Dakota state FSA committee to do what they have asked to do, which is correct a clear outlier of a yield in LaMoure County, North Dakota," Ihry said.

The 165-bushel yield used by FSA translated into farmers in LaMoure County losing a collective $7.5 million or so in ARC payments. Statewide, if the state committee were allowed to make corrections, it would translate into about $14 million to $15 million more in ARC-County payments for farmers, Ihry said.

The National Agricultural Statistics Service did not post a yield for LaMoure County in 2014 because only 27 farmers filled out the yield survey in the county. NASS needed at least three more surveys filled to publish a yield in the county. When NASS could not publish a county yield, the Farm Service Agency went to the Risk Management Agency to get a yield from crop insurers. RMA calculates yield by taking total production of crop insurance records and dividing that production total by the number of insured acres in the county.

The North Dakota-based AgWeek quoted one LaMoure County farmer who said the lack of NASS yield survey data cost the operation about $30,000 in lost ARC payments.

FSA staffers in Washington, D.C, maintain there are no problems nationally with yield data. In a statement, a USDA spokesperson said on Friday that the Farm Service Agency is not finding errors.

"We have received various requests to double-check a number of county yields for specific crops and are working with our sister agencies to ensure that FSA used the data appropriately and that there were no errors," the spokesperson said. "We continue to analyze these as they come to us, but generally have not found errors. In order to ensure program integrity, we have continued to rely on our procedure and the best statistically valid, producer-provided, county-level data available."

An FSA spokesman stated Tuesday that the agency has several steps to use the highest-precision statistics possible. First, NASS data is used. Where that data doesn't exist, the next strongest set of data is county-level crop insurance from RMA. Where that data doesn't exist, NASS then uses district data. If NASS district data doesn't exist, then the FSA state committees provide data. "This process maintains accounting and audit integrity of the calculations," FSA stated to DTN.

The FSA spokesman also added that no other states have requested a variance.

Ihry said producers typically report bulk bushels on the Actual Production History forms for crop insurance, and the yield can run 10-15 bushels higher than the final production when weight, quality and testing are factored in.

"Producers basically report bulk bushels on their APH forms and the yield is higher. Is that a fault of the producer? I don't think it is."

Ihry added, "There's something wrong here when a county has a yield 10 bushels higher than the historic high for any county in North Dakota."

Hoeven has asked FSA in Washington, D.C., to allow the state committee to make changes. Ihry noted Sen. Heidi Heitkamp, North Dakota's other senator, also has been vocal in trying to get FSA to adjust the county yield.

The issue also was raised last week by Rep. Collin Peterson, ranking member of the House Agriculture Committee, at a House Agriculture Subcommittee hearing. Peterson asked NASS officials about the problems regarding farmers who are not sending in the voluntary yield surveys. Peterson also noted that in his district there is an issue where large farmers who irrigate are sending in data, but smaller farmers who don't irrigate are not responding to surveys.

Despite the position taken by USDA, Ihry said corn yields in North Dakota aren't the only problem facing FSA nationally. He maintains other states and other commodities have outlier yields around the country. Ihry dealt with some of these issues when he was at the agency.

"There are other places with similar problems," he said.

If the state FSA committee changes county yields, the committee is required to document and justify any corrections. "There's really no reason why that can't happen," Ihry said.

Chris Clayton can be reached at Chris.Clayton@dtn.com

(AG/CZ)