Ag Policy Blog

Agricultural economists at the farmdoc daily break down the new base acre provisions of the budget reconciliation bill, which they frame as the de facto 2025 farm bill.

Carl Zulauf from Ohio State University, along with Gary Schnitkey and Nick Paulson from the University of Illinois wrote an article looking at some of the issues around the new base-acre provisions.

The addition of 30 million base acres in the legislation, "is arguably its most important provision because it is a major expansion of commodity program payments to current noncovered crops and this a major expansion of the footprint of commodity programs."

Under the changes, farmers who have planted commodity crops from 2019-2023 will get a chance to add those acres to farm program base if they meet the right conditions.

First, planted acres must be higher than total base acres for all commodities as of Sept. 30, 2024. A farm's total base acres cannot exceed total acres. The added base must be "the lesser of 15% total acres on an FSA farm, or the 2019-2023 average, all years included, of planted or prevented planting acres to "eligible noncovered commodities."

The farmdoc analysis details eligible noncovered commodities as are acres planted to crops other than covered commodities such as trees, bushes, vines, grass or pasture.

There are open-ended questions about non-covered commodities involving hay, fallow acres, sugar cane and sugar beets, tobacco and hemp.

New base acres would be allowed among current commodity crops planted from 2019-2023 on the farm. An owner cannot include multiple commodities planted or prevent-planted on the same acres. An owner must choose which commodity is used to calculate the five-year average.

USDA faces a 30-million-acre cap for new base. There are a lot of questions about how the new base-acre provisions will be applied, such as how USDA will treat roughly 3.2 million acres of unassigned cotton generic base acres.

Farmdoc's analysis noted there is a 38.4-million-acre spread between the average planted acres for principal crops from 2019-2023 and FSA base acres. There also could be acres listed for prevented-planting filings that aren't base acres as well.

Another question is whether base acres will be added to farms that have no current base acres? That's significant because a large focus for adding new base acres was to support young and beginning farmers who may have had no option but start farming land that was not considered base acres.

All of this will likely lead to a pro-rated reduction that will end up being applied to farms adding base acres.

Farmdoc notes, "Each of the main farm program areas gain something from the new base acre provision. Plains and Midwest states benefit from a larger number of new base acres. States with peanuts and long grain rice base benefit from more base acres in high paying crops. Small base acre states benefit from a higher percent(age) increase in base acres. Finally, commodity programs are expanded to some current non-program crops. There appears to be something for every state."

In the end, there will be several details that FSA will need to clarify when setting the rules for enrolling new base acres.

Ten states are expected account for more than 60% of the new new base acres:

Texas, 2.6 million

North Dakota, 2.5 million

Nebraska, 2.28 million

South Dakota, 2 million

Kansas, 1.97 million

Minnesota, 19.3 million

Missouri, 1.6 million

Iowa, 1.4 million

Ohio, 1 million

Illinois, 1 million

For more analysis, go to https://farmdocdaily.illinois.edu/…

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

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