Crop Insurance

One Big Beautiful Bill Might Force Farmers to Rethink Farm Business Structures

Tue, 10 Feb 2026 15:02:09 GMT

At a time when farm income is under growing pressure, the One Big Beautiful Bill is reshaping the farm safety net in ways that go well beyond bigger checks or better crop insurance coverage. According to Farm CPA Paul Neiffer, the legislation could quietly push producers toward fundamental changes in how their farm businesses are structured, decisions that could have long-term implications for taxes, payments, and succession planning.

While the bill was signed into law in July of 2025, there’s still guidance that needs to be set before farmers can make vital decisions. And some of the most favorable changes- like to crop insurance coverage- won’t go into effect until late this year.

While much of the early conversation around the bill has focused on higher reference prices and stronger crop insurance subsidies, during the 2026 Top Producer Summit, Neiffer told attendees the real impact may not be fully understood yet, and farmers should be paying close attention.

“This bill changes the rules we’ve all been operating under for the last 20 years,” Neiffer says. “And when the rules change, the structure of the farm suddenly matters a lot more than it used to.”

Financial Stress Is Already Building in Farm Country

The bill arrives against a backdrop of tightening farm finances. USDA’s updated net farm income forecast showed a sharper-than-expected decline for 2025 , with early projections for 2026 offering little comfort, particularly for row-crop producers, a trend doesn’t surprise Neiffer.

“It peaked out in 2022, and it’s definitely been going down ever since,” he explains. “If you’re a row-crop farmer, 2026 is probably going to look a lot like 2025 unless something changes on the price side.”

While government payments will help stabilize income, Neiffer is blunt about what would happen without them.

“Without ARC, PLC, the FSA payments, the SDRP top-ups, without all of that, most row crop farmers would absolutely be struggling right now,” he says.

Payments tied to the One Big Beautiful Bill are expected to start flowing in October, providing a critical backstop during a period when margins remain thin and balance sheets are tightening across large parts of the country.

Crop Insurance: One of the Bill’s Biggest Wins

Neiffer gives the crop insurance provisions in the One Big Beautiful Bill high marks , calling them one of the clearest positives for producers.

“I’d give it a B-plus to A-minus,” says Neiffer.

Why such a high grade? The bill boosts premium subsidies across most revenue protection levels:

Coverage levels from 55% to 75% receive a 5 percentage-point increase in premium subsidies.
80% and 85% coverage levels see a 3 percentage-point increase.
Supplemental Coverage Option (SCO) now extends up to 90% coverage, and farmers can now pair ARC with SCO, something previously prohibited.
SCO subsidies jump from 65% to 80%, making higher coverage far more affordable.

For many producers, especially wheat growers, these changes significantly reduce out-of-pocket costs while expanding protection.

Beginning farmers also receive a major boost. Previously limited to a 10% premium subsidy bump for five years, the bill expands the benefit to 10 years, with even higher subsidies in the early years.

“For young farmers, it can now make financial sense to farm on their own instead of with their parents,” Neiffer said. “From a family standpoint, they’re actually going to make more money.”

Prevent Plant Still a Pain Point

Not everything is a win. One of the main reasons Neiffer doesn’t give the crop insurance changes a straight A is because of changes to prevent plant, something that remains a concern, especially in high-risk regions like Arkansas and the Dakotas.

Under previous rules, farmers could buy up an additional 10% of coverage. That was later reduced to 5%, and Neiffer says USDA’s Risk Management Agency is still discussing cutting or eliminating that option entirely.

“That extra 5% really matters when you’ve got too much water,” he said.

While not enough to outweigh the bill’s positives, the issue drags down what could otherwise be a near-perfect crop insurance package.

Beginning Farmers See Expanded Incentives

The bill also significantly expands benefits for beginning farmers, extending premium subsidy incentives from five years to ten , while also increasing the subsidy percentages in the early years.

“Before, they got a 10% bump, but only for five years,” Neiffer says. “Now it’s 15% in years one and two, 13% in year three, 11% in year four, and 10% all the way through year ten.”

That change, he says, could alter how farm families bring the next generation into the operation.

“For a lot of young farmers, it may actually make more sense financially to farm on their own instead of farming with their parents,” Neiffer says. “If they’re part of the parents’ operation, they may or may not qualify for those premium subsidies. On their own, they do.”

From a purely financial standpoint, Neiffer says some families could generate more income overall by restructuring how younger operators enter the business.

Prevent Plant Remains a Lingering Concern

Despite the positives, not every provision landed well with producers. Prevent plant coverage remains a contentious issue, particularly in regions prone to excess moisture.

“Under the old rules, you could buy up an extra 10% of prevent plant coverage,” Neiffer adds. “That got cut to 5%, and now RMA is still talking about cutting or eliminating that extra 5% altogether.”

For producers in places like Arkansas and the Dakotas, that reduction matters.

“When you’ve got too much water, that extra coverage helps mitigate a really bad situation,” he says. “Losing it would hurt.”

Even so, Neiffer says the overall crop insurance package remains strong.

“That’s really the only thing dragging it down just a little bit,” he said.

ARC and PLC Changes Offer Ongoing Protection

Beyond insurance, Neiffer points to ARC and PLC changes as one of the most important income stabilizers in the bill, especially because they are designed to work over time, not just in a single marketing year.

“The increase in reference prices and effective reference prices isn’t a one-shot deal,” he says. “It happens this year, it happens next year, and it keeps happening as long as prices stay depressed.”

The bill also includes what Neiffer describes as an “automatic put” built into ARC and PLC, designed to cushion farmers during prolonged periods of weak prices.

“That’s going to help smooth out income over multiple years, and right now, that’s exactly what farmers need,” says Neiffer.

The Structural Shift Farmers May Not Be Ready For

The most overlooked part of the One Big Beautiful Bill, and potentially what may be the most consequential part of the legislation, is how it changes payment limits tied to farm business structure.

Under old rules, LLCs and S corporations were often limited to a single payment cap. The new law shifts that framework, allowing multiple payment limits based on the number of equal owners , depending on how the operation is structured.

That opens the door to significant restructuring. According to Neiffer:

General partnerships may move to LLCs for liability protection and expanded payment eligibility.
C corporations, which remain stuck with a single payment limit, may convert to S corporations.
Some farms are already making the switch.

“I’ve talked to several farmers already that either have switched or will be switching,” Neiffer says. “And it’s completely because of the One Big Beautiful Bill.”

Still, he urges caution. USDA guidance on how these new rules will be applied has not yet been released.

“Before I tell anyone to change their structure, we need that guidance,” Neiffer says. “Otherwise, you risk unintended consequences that wipe out the benefit.”

A Note of Caution on Taxes and Spending

Neiffer also warns producers not to let tax provisions drive equipment purchases or expansion decisions.

“There are a lot of good tax provisions in this bill,” he said. “But farmers tend to get hooked on them.”

He points specifically to bonus depreciation as an area of concern.

“They go out and buy something just because they can deduct it,” he says. “If they finance it with debt, they don’t always think about what happens the next year, or the year after that, or the year after that.”

The result, he says, can be financial strain that lasts long after the tax benefit fades.

Guidance Still Needed Before Big Decisions

Despite the potential advantages of restructuring, Neiffer urges farmers to have patience. USDA guidance on how the new payment limit rules will be applied has not yet been released.

“Before I’m telling anybody to change their structure, we really need that guidance,” he says. “I worry about the law of unintended consequences, where we think the rule is going to work one way, and then something else kicks in and negates the benefit.”

Farmers were expecting clarity by the end of 2025. That hasn’t happened yet.

“We’re already almost to March,” Neiffer says. “But we should have it any day now.”

When it arrives, Neiffer believes it could prompt some of the most significant farm business decisions producers have faced in years , driven not just by markets, but by policy.

Another Temporary Fix: Stopgap Bill Includes Farm Bill Extension — Is This the New Normal for Ag Policy?

Tue, 11 Nov 2025 15:26:14 GMT

A new stopgap spending bill to reopen the government also extends key Farm Bill programs for one year—covering the provisions left out of July’s budget package. While the Senate waits on the House to vote, it brings up what some economists think may be a new reality: the days of passing a comprehensive Farm Bill may be over, and a piecemeal approach could be the new norm in Washington.

It’s been about 6 years and 11 months since Congress passed a new, comprehensive (5-year) farm bill. This week, the continuing resolution (CR), which funds the federal government through January 30, includes an extension of the current farm bill, again. This prevents outdated “permanent law” provisions from taking effect. Without action, those Depression-era statutes could have triggered mandatory price supports for certain commodities, disrupting markets.

The bill also includes an extension of the U.S. Grain Standards Act, ensuring official grain inspection and weighing services continue without interruption.

Senate Votes 60–40 to Advance the Measure

The Senate advanced the package in a 60–40 vote Sunday night, providing farmers relief from uncertainty over whether core safety-net programs might lapse.

An earlier package dubbed the “One Big Beautiful Bill” increased funding for commodity programs, crop insurance, and export promotion, but it left out several smaller and conservation-related initiatives—including the Conservation Reserve Program (CRP). The new CR temporarily fills that gap while Congress works toward a full Farm Bill reauthorization.

Boozman: “Critical USDA Services Resume”

Sen. John Boozman (R-AR), chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, praised the bill’s passage, emphasizing its importance for both producers and rural communities.

“Ending the government shutdown ensures critical USDA services resume so vulnerable families no longer experience disruptions to nutrition benefits, farmers can access the programs and personnel they rely on to keep their operations running efficiently and disaster assistance is delivered,” Boozman said in a statement.“We advanced long-overdue farm bill policy improvements in the One Big Beautiful Bill, including enhanced risk management tools farmers have been calling for, and we’re continuing work to reauthorize other key initiatives. Extending the farm bill and the U.S. Grain Standards Act gives us more time to finalize these programs essential to farmers, ranchers and rural America.”

Is This the New Norm?

The extension buys lawmakers additional time to complete a comprehensive Farm Bill reauthorization, expected to be one of the top legislative priorities in early 2026.

But the loss of urgency to pass a new, comprehensive five-year farm bill may be due to the fact Congress included key enhancements to the Farm Safety Net in the One Big Beautiful Bill earlier this year. The Farm Journal Ag Economists’ Monthly Monitor asked economists in July if that makes it more difficult or easier to pass a Farm Bill this year. 70% said yes. And in September, the Monthly Monitor asked when Congress will pass a new farm bill. Nearly 40% (39%) said a piecemeal approach for passing the farm bill is the new norm.

According to the Congressional Research Service, Sections 10101 and 10108 (Title I, Agriculture) would increase federal outlays by about $52.3 billion + $1.6 billion over 10 years.

The American Farm Bureau Federation says the bill directs about $65.6 billion in new agricultural investment over 10 years: ~$59 billion for core farm safety-net enhancements, ~$6.6 billion for other ag priorities.

Key Farm Bill-style Provisions in the OBBB

Here’s a breakdown of major provisions in the One Big Beautiful Bill Act that impact legislation within the Farm Bill:

1. Extension & enhancement of commodity support / safety-net programs

The bill extends core programs originally in the Agriculture Improvement Act of 2018 (2018 Farm Bill) through crop year 2031.
Reference prices under the Price Loss Coverage (PLC) program are raised.
The Agriculture Risk Coverage (ARC) program’s revenue guarantee is increased (for example, from 86% to 90%) and maximum payment rates increased.
Marketing Assistance Loan rates are increased.
The bill provides a one-time opportunity for eligible producers to update base acres (“new base acre holdings”).

2. Crop insurance and disaster assistance

Premium subsidies for crop insurance increase; the bill boosts coverage levels for the Supplemental Coverage Option (SCO) and Whole Farm Revenue Protection (WFRP) policies.
Disaster assistance programs are expanded: loss types eligible are broadened, thresholds for payment triggers are lowered, and coverage levels increased.

3. Dairy, sugar, and specialty commodities

For dairy: The bill increases the amount of milk production a producer can enroll in the Dairy Margin Coverage (DMC) program. Also, it requires dairy product manufacturers to report cost/yield data so that “make allowances” under the federal milk marketing order system can be updated.
For sugar: Under the sugar support program, priority is given to sugar-beet processors if marketing allotments are raised; the bill also mandates reallocation of tariff-rate quota shortfalls by March 1 and requires USDA to report on refined sugar imports.

4. Agricultural research, animals, trust funds, and miscellaneous programs

Section 10108 of the bill funds: the National Animal Health Laboratory Network, National Animal Disease Preparedness Response Program, and the National Animal Vaccine and Veterinary Countermeasures Bank.
Extends funding for trust funds supporting pima cotton, wool, certain textile, and citrus industries.
Miscellaneous investments in horticulture, energy (for agriculture), trade promotion, and rural infrastructure also included.

While nothing is easy in Washington, it seems addressing portions of farm bill funding within other legislation is the path of least resistance. Which could change the way farm bills are shaped - and passed through Congress- in the years ahead.

Opposition to the Farm Bill Extension

While most farm groups applaud the one-year extension of the 2018 Farm Bill, the Institute for Agriculture and Trade Policy (IATP) says it comes with potential issues for small and medium size farmers.

“The Senate’s deal to reopen the government has a number of problems that will hurt farmers and rural communities. The Senate attaches a 12-month Farm Bill extension to the deal, setting up the possibility for more chaos just a year from now,” says Michael Happ, Program Associate for Climate and Rural Communities. “Even worse, it is not a clean extension. The text proposes eliminating payment limitations for Farm Bill conservation programs such as the Environmental Quality Incentives Program (EQIP). In most years, well over half of applicants to EQIP are turned away due to a lack of funds — and without payment limits, the USDA will likely issue fewer, larger EQIP contracts. By getting rid of the payment limit, the Senate opens the door for more of EQIP’s finite resources to be diverted to the largest operations while more small and midscale farms are closed out.”

IATP is urging the Senate needs to keep payment limits in place and go back to the negotiating table.

The One Big Beautiful Bill Will Boost 2025 PLC Payments: Here's a Per-Acre Breakdown

Thu, 03 Jul 2025 20:14:39 GMT

Both the Senate and House GOP worked around the clock to get President Donald Trump’s massive tax bill passed this week. The One Big Beautiful Bill, which was more than 800 pages long, barely passed in both the Senate and the House, but is receiving high praise from many agricultural groups who argue the bill is a win for agriculture.

On Thursday, House GOP leaders overcame objections from even Republican lawmakers on provisions for SNAP, Medicaid and rural hospitals. All but two Republicans, Reps. Thomas Massie, R-Ky., and Brian Fitzpatrick, R-Pa., voted for the bill, which passed 218 to 214.

.@SpeakerJohnson officially signs the One Big Beautiful Bill— sending it to @POTUS' desk to be signed into law.

Tax cuts, border security, energy dominance, and so much more are coming your way. 🇺🇸 pic.twitter.com/elzAg7s4LP
— Rapid Response 47 (@RapidResponse47) July 3, 2025

But for agriculture, tax provisions received high praise, including avoiding a year-end tax hike and eliminating the so-called death tax.

“America’s cattle farmers and ranchers are pleased by the final passage of the One Big Beautiful Bill. This legislation will protect family farmers and ranchers from the devastation of the Death Tax, it will avoid a massive year-end tax hike that could have put cattle operations out of business, it expands and protects many of the small business tax deductions that family producers rely on to save more of the hard-earned money, and it funds critical foreign animal disease prevention measures that protect cattle health,” says Ethan Lane, senior vice president of government affairs, National Cattlemen’s Beef Association (NCBA).

The bill also provides $66 billion in new spending for farm programs. According to Agri-Pulse , that’s the largest infusion of new money into farm programs since 2002.

These are changes and enhancements many ag groups were pushing for in the next farm bill.

According to Farm CPA Paul Neiffer , a provision in the bill will pay the greater of ARC or PLC for the 2025 crop.

“Therefore, any anticipate increase in PLC payments would likely be the minimum amount paid to farmers for 2025 but remember none of these payments will begin until October 2026,” Neiffer explained in this in-depth analysis . “There will be a payment limit of $155,000 on ARC and PLC, but LLCs and S corporations will be treated the same as a general partnership.”

Based on Neiffer’s calculations, here’s how it will impact PLC. On average, it will add:

Corn: $22.52 per acre
Soybeans: $42.46 per acre
Wheat: $32.77 per acre
Sorghum: $9.90 per acre
Cotton: $93.05 per acre

Neiffer says while everyone’s PLC yield is different, he simply used an average yield to calculate these figures.

Potential extra PLC per acre payments. Click to enlarge.

(Paul Neiffer )

“You will note that based on June MYA prices, projected PLC payments are estimated at about $2.6 billion. Now, under the old law, all of the ARC acres elected would be removed from this table, however, remember that the new law pays the farmer of the higher of ARC or PLC so the first projected column shows what the minimum payment essentially would be,” Neiffer explains.

You can read Neiffer’s full and in-depth analysis here .

President and CEO of National Cotton Council (NCC) Gary Adams says this bill provides additional support desperately needed this year.

“The 2025 crop is going to be or shaping up to be the third year in a row that farmers will see both the market prices and the support levels below cost of production,” Adams says. “One of the reasons why this bill is so important is that for the reference price that applies to the PLC and ARC programs, those higher reference prices that are in this legislation apply to this year’s crop, and that is important because it will help if prices stay low, and stay where they are. This will put some additional support, in the grower’s pocket for the crop that they’re going to harvest this fall.”

American Farm Bureau applauded the work by Congress this week, saying, “More than half of farmers are losing money, so an increase in reference prices is desperately needed, and tax tools will help farmers and ranchers plan for the next season and the next generation.”

The bill now heads to Trump’s desk, which he plans to sign Friday at the White House.

What's Missing in the Big Beautiful Bill When It Comes to Agriculture?

Tue, 10 Jun 2025 17:22:26 GMT

The fate of President Donald Trump’s One Big Beautiful Bill is with the Senate. The 1,000-page bill includes nearly $4.9 trillion in tax breaks and budget cuts, and is also packed with priorities that cover agriculture . That includes one provision that will allow community banks to pass along lower interest rates to ag producers. However, not all of agriculture’s wants are in the bill.

American Farm Bureau Federation (AFBF) recently dug into the details of the massive bill being debated in Washington. According to the nonpartisan Congressional Budget Office (CBO), the House-passed version of the One Big Beautiful Bill Act would increase spending for agriculture-facing programs by $56.6 billion over the next decade. Of that increase, $52.3 billion is for enhancements to the current farm safety net, including higher reference prices for ARC and PLC, and $4.3 billion is for trade promotion, livestock biosecurity, research and rural school funding.

According to AFBF, the One Big Beautiful Bill Act would increase agriculture-facing programs spending by $56.6 billion over the next decade (fiscal years 2025–2034).

(American Farm Bureau Federation (AFBF) )

According to AFBF, here’s what the current version of the bill includes for farm bill provisions (Title 1, Subtitle B-Investment in Rural America):

Updates and funding for many core agriculture titles through 2031.
Enhancements to safety nets including ARC, PLC and Dairy Margin Coverage (DMC) through the 2031 crop year.
Increases to reference prices for major covered commodities between 11% to 21% under the farm bill provisions of the bill.
Addition of a reference price escalator mechanism beginning in the 2031 crop year, which AFBF says would increase reference prices by 0.5% annually on a compounded basis. That increase is capped at 115% of the original statuary value.
Permits for farmers to add up to 30 million new base acres
Updates to ARC by adjusting revenue guarantee and the payment cap beginning in 2025. That would increase the coverage threshold to 90% of benchmark revenue, and increase the payment cap of 10% to 12.5%.
Enhancements to the DMC program and an increase of Tier 1 coverage eligibility from 5 million pounds to 6 million pounds per farm.

Proposed changes to the safety net

(AFBF)

Changes to Conservation Programs
AFBF’s analysis of the reconciliation bill shows long-term funding authority for USDA’s major conservation programs will continue through 2031. That includes the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program (CSP) and Agricultural Conservation Easement Program (ACEP).

The levels are higher than what was included in the 2018 farm bill, but align with funding under the Inflation Reduction Act (IRA), making these programs permanent baseline versus new program expansions.

AFBF says the bill doesn’t retain all IRA-funded initiatives.

“For example, it rescinds $450 million in unobligated IRA funds that had been allocated for competitive forestry grants to non-federal landowners. According to the Congressional Budget Office, these adjustments collectively result in a net reduction of $1.8 billion in conservation spending over the next decade,” said the AFBF analysis. “The bill also renews smaller initiatives that were not funded in the last farm bill extension. This includes the Grassroots Source Water Protection program, which safeguards well water, and the Voluntary Public Access and Habitat Incentive program, which rewards farmers for opening land to hunting and recreation. In addition, the Feral Swine Eradication and Control Pilot Program, a vital initiative to combat over $1.6 billion in annual damages caused by invasive wild pigs, is extended with new funding through 2031.”

Focus on Trade
Another important element included in the House version of the Big Beautiful Bill includes establishing a new Agricultural Trade Promotion and Facilitation Program, which would be similar to Market Access Program (MAP) and Foreign Market Development (FMD), while also providing $285 million annually in permanent, mandatory funding through a separate account.

“Because the bill does not modify or replace MAP or FMD, which are typically funded at $200 million and $34.5 million per year, respectively, the new program effectively doubles USDA’s total trade promotion capacity,” said AFBF’s analysis.

National Pork Producers Council (NPPC) CEO Bryan Humphreys says the trade portion of the bill, as well as the tax provisions, are a “win” for livestock producers.

“We’re very pleased with what came out of the House version. We included in there were animal health priorities, some additional funding for MAP and FMD to promote our product internationally, and then, of course, the tax package was included in there on things like 179, bonus depreciation and estate taxes,” he says. “We are very pleased those were in there even if some of our other assets we need to be in the farm bill weren’t able to make it in there.”

Humphreys says the House version of the reconciliation bill includes funding for animal health priorities, including $233 million per year on animal disease prevention and response.

What’s Not in the Bill?
According to Humphreys, there’s one major priority that didn’t make it into the Big Beautiful Bill — and that’s provisions for Prop 12.

“We still need a farm bill to address Proposition 12 in California. At the end of the day, this is an issue that, as California continues to regulate outside of their borders, is not just a pork industry issue. It is an American agriculture issue,” he says. “We’ve been asking — along with the American Farm Bureau, Corn, Soy and others — for Congress to address this issue of California regulating farmers outside of their borders. And we still need that to be addressed.”

Humphreys says a farm bill is still needed to address Proposition 12 in California. But if a farm bill doesn’t happen this year, Humphreys says NPPC is exploring other options to do it.

“Even though there are other solutions for Proposition 12 and other potential vehicles out there that we’ll continue to explore with our friends on the Hill, at the end of the day, we still believe as American pork producers that America and the pork industry need a farm bill — a skinny version, a large version or whatever. We need to maintain that coalition not just for now, but for decades to come as well. We’re not ready to give up on that yet,” Humphreys says.

Renewable Energy In The Bill
Energy programs are another area of focus under the reconciliation bill. According to AFBF, USDA’s farm energy and biofuel programs are reauthorized through 2031 to spur renewable energy innovation in rural America. That would include the Biobased Markets Program, which is a program that promotes biobased products through federal procurement. It also addresses the Bioenergy Program for Advanced Biofuels, which provides payments to producers of biodiesel, cellulosic ethanol and other next-generation fuels.

Tax Provisions That Would Benefit Ag

Farm CPA Paul Neiffer calls the tax provisions within the House version of the bill “very favorable for agriculture,” rating them a 8 or 9 out of 10. Here’s why:

As of Jan. 20, farmers will have 100% bonus depreciation for the next four years
The Section 199A deduction that was at the 20% level will now be bumped up to the 23% level.
Cooperative deductions will still be included
Starting next year, Section 179 will increase to $2.5 million, up from $1 million
An increase in the gift tax exemption amounts to $15 million per individual and $30 million per couple, adjusted for inflation annually.

Neiffer say farmers who’ve built net worth through land or other assets, there’s a piece of the legislation that will also benefit them.

“The lifetime exemption starting next year will be $15 million, and it’s made permanent,” Neiffer says.

Lower Interest Rates for Ag Producers?

According to Jeff T. Kanger, president of First State Bank in Lincoln, Nebraska, there’s another provision that will allow community banks to pass along lower interest rates to ag producers and rural housing.

“The community banks have less tax exposure and can therefore pass along some interest savings to customers,” Kanger told AgWeb. “This provision is very important to a lot of our growers.”

It’s called the “Exclusion of interest on loans secured by rural or agricultural real property.” According to the provision text, it “allows for a partial exclusion of interest on certain loans secured by rural or agricultural real estate. Speciﬁcally, it allows for the exclusion of 25 percent of interest received by a qualiﬁed lender on any qualiﬁed real estate loan.”

What’s Next?
The Senate could roll out its version of bill later this week, which is expected to include changes from the House’s version that passed in May by one vote.

House Speaker Mike Johnson also said this week he still believes July 4 is a realistic target for passing President Donald Trump’s “big beautiful bill.”

DOGE Cuts More Than 100 USDA Office Leases: Find Out If Yours Is On The List

Fri, 14 Mar 2025 20:24:21 GMT

More than 100 USDA and ag related government offices all over the country are on the list to have their leases terminated by the Department of Government Efficiency.

According to a list on DOGE’s website , the affected offices include:

FSA state and county offices
NRCS
APHIS
Agricultural Marketing Service
Rural Housing Service
Food Safety and Inspection Service
Forest Service
Risk Management Agency

These offices are located in 40 U.S. states, and the DOGE estimates say the total savings from this move will add up to over $60 million.

Here’s where those offices are located:

It’s important to note the lease terminations don’t necessarily mean all the locations will close. In some cases, agencies may negotiate new leases to stay in place, downsize their existing space, or relocate elsewhere.

USDA currently ranks seventh on DOGE’s “Agency Efficiency Leaderboard”.

Q&A With A Washington Insider: 4 Insights For Farmers

Mon, 24 Feb 2025 20:55:24 GMT

Growing up on a corn and soybean farm in central Illinois, Tara Smith is no stranger to agriculture. Now the executive vice president of Torrey Advisory Group, Smith helps teach members of Congress about the issues in front of the ag industry.

“We represent people from the farm gate - dairy farmers, soybean farmers, corn farmers, retailers like Wegmans and everything in between, whether it’s ag inputs, processors or ingredient companies,” Smith says. “We do lobbying for them, general issues management, light communications, and association management as well.”

Smith joined the Top Producer podcast with host Paul Neiffer and shared four insights about lobbying in Washington D.C.

Q: When lobbying on the Hill, do you primarily meet with staff, representatives or senators?
A: A lot of folks come to town for their Fly Ins to lobby on an issue, and they get really disappointed where they don’t get to meet with a member. But I would say those staff are really important. They are the gatekeepers of information to their bosses, particularly if their boss doesn’t know agriculture particularly well, or doesn’t know your issue particularly well. Build that relationship with the staff so when that staffer has a question about a certain policy issue or a bill, you’re the resource and the person they call to ask a question. That’s invaluable. Meeting with members is great and very important, but I wouldn’t undersell that time with staffers.

Q: Many people have the assumption there’s a great deal of hurry to get a farm bill done. But there’s no deadline until either Sept. 30 or Dec. 30. What’s your take?
A: Congress works best under pressure and with deadlines. The intent might be there to try to move something quickly, but my guess is that there is a laundry list of other issues that are really going to take the oxygen out of the room in D.C. for the first several months this year. It’s hard to see where a farm bill fits in at all this year. And I think it would be really amazing work on the part of the leadership of the ag committee to have something ready to go in September.

Catch up on episodes of the Top Producer podcast

Q: What have you heard about reference prices in the next farm bill?
A: It’s hard with the farm economy where it is right now, pre-tariffs and let alone post-tariffs, to envision us a farm bill without some sort of increase in reference price prices or beefing up of Title One. If you’ve looked at the numbers getting a crop like soybeans, for example, to a decent reference price level where they would actually trigger in really bad situations - like a trade war with China - is going to require a really significant increase on a lot of acres, and that means it gets really expensive, really fast. I think it’s really hard to envision us getting a farm bill across the finish line without some of that funding.

Q: You lobby on behalf of the crop insurance industry. Why is crop insurance so important?
A: It’s one of the most important programs we have coming out of USDA. When we start talking about all of these different disasters that are coming at farmers - tariffs or increased input prices or weather disasters - the first money on the ground from USDA is crop insurance money. You look at Title One or ad hoc disaster assistance, you’re looking at a full year, maybe two, before you see a dollar in the farmer’s pocket. There’s a lot of confidence in crop insurance being able to meet those needs and being able to be a guarantee.

Your Next Read: Find Out The ‘Best Buy’ In Crop Insurance This Year

EXCLUSIVE: As DOGE Works to Stop Wasteful Spending, Secretary Rollins Says Vital Farm Programs Aren't at Risk

Thu, 20 Feb 2025 22:44:32 GMT

The Department of Government Efficiency (DOGE) has stormed Washington since President Donald Trump took office, working to uncover what it calls wasteful spending. That includes a comprehensive review of the money going out the door at USDA.

Before Agriculture Secretary Brooke Rollins was even confirmed, DOGE produced findings from its initial review of USDA. Those findings were something Rollins highlighted during her first address to more than 400 USDA staffers and others immediately following her confirmation.

“I welcome DOGE’s efforts at USDA because we know that its work makes us better, stronger, faster and more efficient. I will expect full access and transparency to DOGE in the days and weeks to come,” said Secretary Rollins during her address.

The American people gave us a mandate: end waste, fraud, and abuse in their government — and we are delivering.

🚨Here are just several contracts we terminated @USDA:

-Media contracts, including Politico subscriptions: $2.77 million

-Diversity, Equity, and Inclusion…
— Secretary Brooke Rollins (@SecRollins) February 15, 2025

According to Rollins, since Jan. 20, USDA has reviewed contracts, personnel, employee trainings and DEI programs. Based on that review, she announced USDA would terminated 78 contracts, which totaled more than $132 million, calling them “bold reforms.” That includes:

Media contracts, including Politico subscriptions: $2.77 million
Diversity, Equity and Inclusion Onboarding Specialist: $374,000
Diversity Dialogue Workshops: $254,000
International Development for Historically Underrepresented Communities: $298,000
Brazilian Forest and Gender Consultant: $229,000
Women and Forest Carbon Initiative Mentorship Program: $121,000

Today’s contract update:

95 cancellations with savings of ~$115M (ceiling value of ~$235M), including two USDA contracts:
- $265k for a “food and nutrition service 3 day leadership retreat in Atlanta”
- $30K for “Malaysia study tour facilitation services” pic.twitter.com/U5IMTpvPLe
— Department of Government Efficiency (@DOGE) February 21, 2025

Just a week later, DOGE posted an update saying the current update at USDA include:

95 cancellations with savings of ~$115M (ceiling value of ~$235M)
That includes two USDA contracts:
- - $265k for a “food and nutrition service 3 day leadership retreat in Atlanta”
- $30K for “Malaysia study tour facilitation services”

Live update from our @DOGE_USDA team’s meeting tonight 👇

Look what we just found (and cancelled!): $324,671 grant for “Increasing DEIA Programming for Integrated Pest Management” … you can’t make this up🤦🏻‍♀️

cc: @DOGE @elonmusk pic.twitter.com/GOaYpIeM13
— Secretary Brooke Rollins (@SecRollins) February 21, 2025

Secretary Rollins also providing an update Thursday, saying the agency canceled a $324,671 grant for “Increasing DEIA Programming for Integrated Pest Management.”

DOGE USDA
DOGE USDA took to X (formerly Twitter), seeking help and input from the public. That one post caused a flood of input, with more than 2,000 comments and suggestions. While some went as bold as asking DOGE USDA to abolish USDA reports, others asked DOGE to look into funding for solar on farmland and where the money has been spent to combat avian flu.

DOGE is seeking help from the public! Please DM this account with insights on finding and fixing waste, fraud and abuse relating to the US Department of Agriculture. Thank you.
— DOGE USDA (@DOGE_USDA) February 17, 2025

Are Farm Programs at Risk?

While farmers seem generally open to a USDA that wants to tackle waste, there’s also concern about what it could mean for crop insurance or other vital farm programs.

In an exclusive interview with Farm Journal during the 2025 Top Producer Summit , we asked Secretary Rollins how much push back she will have on DOGE and what assurances she can give producers that farm programs won’t be at risk.

“DOGE has brought, I think, a lot of excitement to all of America,” Rollins said. “I think there is not one person, except for maybe Elizabeth Warren and a few democrats ... everyone realizes at this moment in time in American history this is really important. Having said that, the United States Department of Agriculture, and since President Lincoln founded it in 1862, I believe, this agency is important to our farmers and ranchers with programs like the farm loans, etc., and imperative to a thriving rural America.”

Thank you @topproducermag for hosting @RogerMarshallMD and me in Kansas City, Missouri, with 1,000 of the Top Producers from across the US to talk about issues like expanding trade access and cutting regulatory red tape for farmers.

Biden’s ZERO trade deals and inflationary… pic.twitter.com/ejMxKxkRMG
— Secretary Brooke Rollins (@SecRollins) February 19, 2025

Rollins also pointed to President Trump’s approval rating within the rural community, as another reason this USDA will work to protect those programs.

“The farmers and the ranchers have been with him since he came down the escalator in 2015. I sincerely believe that those programs that are essential to keeping those communities thriving and hopefully even more prosperous going forward, that we’ll work with those to ensure that there is an understanding of how important those are,” said Rollins.

Checkoff Programs and DOGE
When DOGE took to X to ask for input, there were several comments about DOGE investigating agricultural checkoff programs. According to Pro Farmer Washington Correspondent Jim Wiesemeyer, DOGE is reportedly actively reviewing agricultural checkoff programs as part of its broader initiative to evaluate and potentially reform agricultural policy and spending.

AgriTalk’s Chip Flory asked Rollins if Checkoffs had become a target for DOGE.

“That is to be determined,” Rollins said. “I have not even begun to look at those. I know we’ve got a team looking at them. We’re going to get through the next few weeks and then we’ll start evaluating.

According to Wiesemeyer, USDA’s Agricultural Marketing Service oversees 22 checkoff programs, which vary in legal authority and regulatory structure. Some operate under commodity-specific statutes, while others fall under the Commodity Promotion, Research, and Information Act of 1996. State-level checkoff programs also exist, often independently from federal programs, covering commodities such as corn, rice, apples, and table grapes.

The Pros/Cons of Ag Checkoff Programs
Wiesmeyer reports agricultural checkoff programs provide collective marketing, research, and education benefits, but they also face criticism for transparency, fairness and mandatory participation.

Pros

Market development: Expands markets and funds large-scale advertising.
Research & innovation: Improves farming practices, technology, and sustainability.
Education & trust: Enhances consumer confidence in agricultural products.
Return on investment: Studies show benefits outweigh costs, with high benefit-to-cost ratios.

Cons

Transparency issues: Small farmers criticize unclear fund allocation.
Favoring large producers: Benefits may tilt towards larger operations.
Mandatory fees: Farmers must contribute, even if they disagree.
Potential misuse: Allegations of lobbying and mismanagement exist.
Harm to specialty producers: Organic farmers may not benefit but still pay.
Legal challenges: Constitutional disputes over mandatory participation.

Wiesemeyer reports while checkoff programs drive industry growth, concerns over equity and governance continue to spark debate and calls for reform.

Watch Rollins’ full interview with AgriTalk’s Chip Flory.

Your Next Read:

USDA’s Rollins: ‘Let’s Go Barnstorm The World And Find New Partners’ For Trade

Find Out The 'Best Buy' In Crop Insurance This Year

Thu, 13 Feb 2025 16:08:02 GMT

The deadline to make your crop insurance decisions is a month away, and Dave Jansen with Strategic Farm Marketing says there have been major changes to this year’s products.

“I think this is probably the most revolutionary change we’ve seen in crop insurance here in the Midwest in 15 years–some of it with federal products and some of it with private products,” Jansen says.

He recently joined the Top Producer podcast with host Paul Neiffer to explain some of those changes, as well as how you can get the most bang for your buck in coverage.

“ECO (Enhanced Coverage Option) had a 44% subsidy, and that’s now 65%. ECO is, mathematically, probably the best buy we can have in crop insurance today,” Jansen says. “We’ve had some people who are 85% buyers and dropped down to 80% so they could afford the ECO. Some have used SCO (Supplemental Coverage Option), for corn in particular, in order to be able to afford the ECO.”

It’s important to note ECO is a county-based private product - meaning it pays a loss based on your county’s yield or revenue losses instead of your individual numbers. But Jansen says that shouldn’t necessarily scare you off.

“I think the biggest mistake people make when looking at these county-based products is they say, ‘Well, my APH (Actual Production History) is above the county, so I should be looking at this product.’ or ‘My APH is below the county, so I can insure a lot more.’ In either case, it’s the correlation between you and the county that means far more. When the county goes up, do we go up with it? Or, more importantly, when the county goes down, do we go down together,” he explains. “Some farming operations just mirror the county really easily, and some almost go in the opposite direction. That tells you the county-based product isn’t that attractive.”

Catch up on episodes of the Top Producer podcast with Farm CPA Paul Neiffer

If you decide to take advantage of ECO, your premiums could be a 6:1 ratio - depending on where you live. For example, a farmer in Illinois might pay $17 in ECO premiums to get $92 of liability on an acre of corn.

“Only the farmer can determine whether the premium is worth the advantage at that point in time, but has definitely created a tremendous amount of buzz,” Jansen says.

He adds a similar product, called MCO, will be hitting the marketplace soon.

Your Next Read: This is the Year to Re-Evaluate Your Crop Insurance

This is the Year to Re-Evaluate Your Crop Insurance

Mon, 10 Feb 2025 20:17:50 GMT

According to Cole Patrick, director of insurance strategies at Compeer Financial, farmers need to take a serious look at their crop insurance strategies before the 2025 deadline because last year’s coverage isn’t going to cut it.

“This is not a “set it and forget it” year - it’s not the year to renew without considering changes to your coverage options,” Patrick explained during a Compeer Financial webinar in January. “Last year’s coverage might not be adequate for the cost of production, and coverage might not have the same effect it did last year or even two years ago.”

Patrick provides this example:

In 2023, 75% revenue protection (RP) with 230 average production history (APH) and a $5.91 corn price equaled $1,019 in liability.
In 2024, using a corn price of $4.66, that came to $804 in liability.
In 2025, using a corn price of $4.40, that only supplies $760 in liability.

Data from Farmdoc at the University of Illinois estimates total expenses for a farmer in northern Illinois would average about $1,000 per acre - making it important for liability to come closer to 2023 numbers.

“Many don’t want to increase costs by increasing coverage, but they also maybe can’t afford to leave hundreds of dollars at risk,” says Brandon Pezanoski, state insurance product officer with Compeer Financial. “There are a couple of different routes to get this number closer to $1,000 an acre of coverage.”

Look Beyond Base Coverage
Expanding on base coverage, there are two sets of options.

Title 1 through FSA: Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC)
Stacked: Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO)

Patrick shares four main differences for farmers to consider:

ARC/PLC cover base acres, while SCO/ECO are planted acres.
ARC/PLC have no premium.
ARC/PLC pay in Oct. 2026, and SCO/ECO pay in June 2026.
ARC and SCO cannot be combined, but a combination of SCO and/or ECO can be added to PLC.

“In the past few years, we’ve largely seen preference toward ARC - which is typically more favorable when you have a few years of high prices in that 5-year Olympic average. Because PLC uses a statutory reference price, that hasn’t been as attractive,” Patrick says.

When To Use ECO
In 2025, he expects ECO to gain in popularity.

“We think this is going to be hugely advantageous for producers out there,” Patrick says. “It’s a very effective shallow loss coverage tool.”

ECO is an optional, area-based policy endorsement with a coverage band that goes from 85% to 95%. It is available regardless of your ARC or PLC election and can be purchased with or without SCO. However, it does need to be purchased at the same time as your underlying multi-peril crop insurance (MCPI).

“Most of the products we have that are 95% coverage are private product, not subsidized and simply cost a 2:1 or 3:1 ratio,” Pezanoski says. “Here we’re looking at a 5:1 ratio, and there’s no ARC conflict.”

Patrick adds that if crop insurance prices fall more than 5% between the spring and the fall, you’re in ECO territory.

“In the last 10 years for corn, that price has dropped from the spring to the fall price seven times, and six out of those seven times it was greater than 5%,” he says. “If I’m just playing my odds, and I think the price is going to drop more than 5% between 60% to 70% of the time, those are pretty good odds.”

Your Next Read: ARC or PLC? Enrollment is Now Open and Coverage Levels Could Hit Near All-Time Highs For Some Crops

Do Tariffs Work? Leading Ag Economists Weigh In

Mon, 03 Feb 2025 17:00:00 GMT

Tariffs are a tool used by President Donald Trump during both his terms. But do they work? Not even ag economists are in alignment, as the answer seems to be: It depends.

This past weekend, Trump signed three executive orders for tariffs , the first time a president has used powers granted under the International Emergency Economic Powers Act of 1977. The orders also include retaliation clauses that would ramp up tariffs if the countries respond in kind. Trump cut the levy on imports of Canadian energy to 10%.

By Monday morning, Trump had agreed to delay tariffs on goods from Mexico for one month to allow more time for negotiations. The agreement happened just hours before the tariffs were set to take effect.

President Claudia Sheinbaum said U.S. tariffs against Mexico will be delayed for one month after a conversation with Trump on Monday. Trump then confirmed the news on Truth Social.

Which Input Could Be Impacted Most by Tariffs?

Tariffs on the U.S.'s top three trading partners could have a major impact on agriculture. The January Ag Economists’ Monthly Monitor asked economists which input is most at risk. The top answer was fertilizer.

Ag Economists’ Monthly Monitor

(Lindsey Pound)

“From a headline standpoint, it’s probably potash,” says Samuel Taylor, farm inputs analyst, Rabobank. “We get 85% to 90% of our potash from imports from the Canadian market. The residual is made up by Russia and Israel, in principle, with some other markets coming in.”

One day after Trump announced he would move ahead with planned tariffs, Prime Minister Justin Trudeau stated tariffs targeting $30 billion in American products, such as alcohol, produce, household goods and industrial materials, will roll out in two phases starting Feb. 4, the same day the U.S. tariffs are set to begin.

The tariffs on the other $125 billion worth of goods will come in 21 days to allow impacted Canadian companies to adjust their supply chains. Trudeau emphasized Canada’s response would be “strong but appropriate,” while also considering non-tariff measures such as restrictions on critical minerals.

Do Tariffs Work?

With tariffs and a potential trade war brewing that begs the question: Do tariffs work?

It’s something Farm Journal asked the nearly 70 ag economists part of the Farm Journal Ag Economists’ Monthly Monitor. The survey asked economists: “Do tariffs work in trade policy?” Economists views were mixed:

“Tariffs can work in trade policy — that’s why nations continue to use them. The complex part that extends beyond the tariff action is potential long-term repercussions that can result from trade flow changes.”
“In limited cases, typically only if they result in a policy response in the targeted country. Much of the time, tariffs are like cutting off one’s nose to spite one’s face.”
“Tariffs provide short-term gains but have always failed relative to free trade in the long term.”
“Absolutely, when properly applied.”
“Not over the long term. They tend to affect who gets to supply different markets around the world.”

The Ag Economists’ Monthly Monitor also asked: “When tariffs are used as a ‘tool’ in trade, who pays the tariff?” Not all economists were aligned on that answer either, saying sometimes it’s farmers and consumers, but it can also be the exporting countries.

“When the U.S. imposes tariffs on imports, importers in the U.S. pay taxes to the U.S. government on their purchases from abroad. When another nation imposes tariffs, importers in that nation pay import taxes to their government on their purchases from abroad. Often, when a tariff is implemented, another nation retaliates, and you end up with importers in both nations paying the price on whatever products the tariffs apply toward.”
“If an importing country places a tariff on the exporting country, producers in the exporting country and consumers in the importing country both lose (i.e., receive lower and higher prices, respectively). Conversely, producers in the importing country and consumers in the exporting country win (i.e., receive higher and lower prices, respectively).”
“In the short run, consumers who purchase goods with a tariff might see higher prices if the tariff is not absorbed elsewhere. In the long run, the tariff might result in changes to the supply chain that result in higher prices but also create other economic opportunities in America (e.g. reshoring of domestic manufacturing).”
“The correct economist answer is: It depends. Tariffs drive a wedge between prices in the exporting country and in the importing country. It depends on the circumstances of particular markets and how much is reflected in higher prices in the importing country and reduced prices in the exporting country.”
“Both the exporting nation and the importing consumer pay some portion of the tariff depending on who has more flexibility to adjust to trade barrier. If exporting countries can easily switch to supplying other markets, they won’t have to ‘pay.’ If consumers can easily find cheap substitute goods, they won’t have to pay.”

ARC or PLC? Enrollment is Now Open and Coverage Levels Could Hit Near All-Time Highs For Some Crops

Tue, 21 Jan 2025 21:20:35 GMT

Enrollment for Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) is now open, and a new detailed report from Terrain shows ARC and PLC will offer higher support, for some, in 2025.

With Congress authorizing another one-year extension of the 2018 Farm Bill through Sept. 30, 2025 (besides more than $30 billion in ad hoc assistance to agricultural producers experiencing natural and economic disasters), crop farmers across the country now know what risk management tools are available to them for the new crop year.

The report from Terrain indicates for some crops such as corn, soybeans and wheat, coverage levels will increase to levels at or near all-time highs. In addition to crop insurance, crop farmers with eligible base acres may enroll in Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) on a commodity-by-commodity basis.

Support Levels

(Terrain )

“For both ARC and PLC, and for the 2025/26 crop year, the prices used to determine the revenue guarantee and the effective reference price are based on data from the 2019 to 2023 crop years,” says John Newton, the Executive Head of Terrain who also authored the report. “With marketing year average prices for 2023 finalized in mid- to late 2024, and with the farm bill now extended for another year, ARC-County Option (ARC-CO) and PLC support levels for 2025 are now known.

What will the prices end up being for ARC or PLC? Terrain’s report provided this breakdown for several major crops:

Corn ARC-CO: $5.03/bu.
Corn PLC: $4.26/bu.
Soybean ARC-CO: $12.17/bu.
Soybean PLC: $9.66/bu.
Wheat ARC-CO: $6.72/bu.
Wheat PLC: $5.56/bu.

“For farmers with sorghum base acres, program payments are likely, as the support from both ARC and PLC is well above the USDA’s projected price of $3.80/bu. for 2025. For seed cotton, the ARC guarantee is approximately 10% above the effective reference price and may yield program payments if a county’s yields are low. For crops like rice or peanuts, their levels of income support are not materially different than those authorized under the 2014 farm bill over a decade ago,” says the Terrain report.

According to the Congressional Budget Office (CBO), total program payments for the 2025/26 crop year are projected at $5.4 billion.

Terrain says while program payments are far from certain, the Congressional Budget Office’s June 2024 Baseline Projections for USDA Mandatory Farm Programs provided an early look at potential farm program payments for the 2025/26 crop year.

According to the CBO:

Total program payments for the 2025/26 crop year are projected at $5.4 billion
With approximately $3.6 billion in PLC payments and $1.7 billion in ARC-CO payments.

The report notes this will chane as enrollment decisions become known.

Corn is projected to receive $3.2 billion in program payments, or approximately $39 per base acre
Soybeans are projected to receive $565 million in program payments, or approximately $12 per base acre
Wheat is projected to receive $373 million in program payments, with an average payment of $7 per base acre

Projected payments

(Terrain )

ARC or PLC? An Explainer from Terrain

Terrain’s report says ARC-CO is an area-based revenue and income support program that provides payments to farmers when the actual county-level revenue (the county average crop yield multiplied by the marketing year average price) falls below 86% of the benchmark revenue (that is, the revenue guarantee).

“The benchmark revenue, or revenue guarantee, is the product of the five-year Olympic moving average price and the county average trend-adjusted yield,” says the report. “The five-year Olympic averages remove the highest and lowest values and then average the remaining three values. To address low commodity prices, or large yield declines at the county level, the five-year Olympic average uses “plug” prices and yields — equal to the effective reference price and 80% of a county’s transitional yield, respectively. The use of plug values reduces variability and smooths the revenue guarantees available under ARC-CO.”

It’s key to note the program payments under ARC-CO are capped at 10% of the benchmark revenue, and program payments are made on 85% of the farm’s base acres of the covered commodity.

ARC-CO is based on county-level crop revenue, while PLC is soley based on price.

“The 2018 farm bill created the effective reference price to allow statutory reference prices, and the corresponding support level, to increase following high commodity price environments like the one grain and oilseed farmers recently experienced” says the report. “The effective reference price is equal to the maximum of 85% of the five-year Olympic moving average price (without plug prices) and the effective reference price and is capped at 115% of the statutory reference price.”

Terrain gave this example for corn:

Corn has a statutory reference price of $3.70/bu. and a maximum effective reference price of $4.26/bu. (115% x $3.70).

“When program payments are triggered under PLC, the total payment to the farmer is based on 85% of the farmer’s base acres and the farmer’s farm-level PLC yield. PLC payment rates are capped at the difference between the effective reference price and the USDA’s marketing assistance loan rate,” says the report.

View the full Terrain report .

Stabenow Finally Releases Full Text of Senate Farm Bill; Here's What It Means for Agriculture

Mon, 18 Nov 2024 17:35:08 GMT

Stabenow unveiled 1,397-page details of her long-awaited farm bill Monday morning. This comes as early Sunday evening Pro Farmer broke the news that Senate Ag Chairwoman (D-Mich.) had briefed Democrats but not Republicans on her coming farm bill text, which was expected to be released Monday.

Stabenow said in a news release and summary of the bill , “The foundation of every successful farm bill is built on holding together the broad, bipartisan farm bill coalition. This is a strong bill that invests in all of agriculture, helps families put food on the table, supports rural prosperity, and holds that coalition together.”

BREAKING: Chairwoman @SenStabenow Introduces Rural Prosperity and Food Security Acthttps://t.co/qRunZlk6zj
— Senate Ag, Nutrition, & Forestry Committee Dems (@SenateAgDems) November 18, 2024

The Rural Prosperity and Food Security Act includes $39 billion in new resources “to keep farmers farming, families fed, and rural communities strong.” The bill builds on the proposal Stabenow released in May by investing new resources and including innovative, new ideas to deliver the assistance farmers need faster.

It provides farmers with the certainty of a 5-year farm bill and the immediate help they need to manage the urgent needs of the present. It doubles down on our commitment to rural communities, ensures that the Supplemental Nutrition Assistance Program (SNAP) keeps up with the realities of American life, and brings the historic investments in climate-smart conservation practices into the farm bill. These new investments include:

$20 billion to strengthen the farm safety net to support all of agriculture and establishes a permanent structure for disaster assistance so emergency relief reaches farmers faster;
$8.5 billion to help families make ends meet, put food on the table, and improve access to nutrition assistance;
$4.3 billion to improve quality of life in the rural communities that millions of Americans call home.”

Farm CPA Paul Neiffer has already combed through the bill, and says, “This is our first preview of the Senate Farm Bill Proposal. There appears to be some benefit to production Ag, however, many of the proposals seem to penalize production ag such as the following:

Very limited increase in base acres
Restriction on payments due to ownership of farmland by higher AGI individuals or entities
Reduction in AGI limits
No change to definition of farm income
Possible limit on PLC payments
Items that may benefit production ag include:
Permanent ERP (although this is a very messy program)
Partial advance payments of ARC and PLC
Automatic 2023 and 2024 ARC or PLC decisions”

Senate GOP Ag Committee Ranking Member Reacts

Senate Ag Committee ranking member John Boozman (R-Ark.) on X wrote: “An 11th hour partisan proposal released 415 days after the expiration of the current farm bill is insulting. America’s farmers deserve better.”

“An 11th hour partisan proposal released 415 days after the expiration of the current farm bill is insulting. America’s farmers deserve better.” RM @JohnBoozman
— Senate Ag Committee Republicans (@SenateAgGOP) November 18, 2024

Meanwhile, the National Pork Producers Council (NPPC) issued the following statement:

“Though America’s pork producers appreciate Chairwoman Stabenow’s efforts to publish Farm Bill text, this is simply not a viable bill, as it fails to provide a solution to California Prop. 12,” said NPPC President Lori Stevermer, a pork producer from Easton, Minn. “Pork producers have continually spoken up about the negative impacts of this issue, and it is a shame these conversations were disregarded.”

In May, NPPC secured 100 percent of pork producers’ priorities in the House Agriculture Committee-passed bipartisan 2024 Farm Bill. In June, producers once again secured all policy priorities in Senate Agriculture Committee Ranking Member John Boozman’s 2024 Farm Bill framework.

NPPC said it urges both chambers of Congress to swiftly consider and pass a Farm Bill this year that includes a fix to California Proposition 12, a state law that places arbitrary housing standards on the pork industry, creating uncertainty for pork producers as they look to continue their operations to the next generation.

Additional Impact on Agriculture from Farm CPA

In a post this morning, Paul Neiffer of Farm CPA Report included a quick preview of the items that jumped out at him relative to the farm bill details released by Stabenow.

Reference Prices: The House proposal raised reference prices by approximately 10-20%. The Senate proposal appears to raise reference prices by a flat 5% (rounded). Although it appears that Cotton only went up by 4% instead of 5%.
Increase in Base Acres
- Only underserved and disadvantaged farmers may increase base acres
- Based on average of 2018-2022 plantings
- Includes prevent planted acres
- Maximum increase of 160 acres per farm
- If disadvantage farmer does not farm acres during 2025-2029, then increased base acres are eliminated
- Special 2023 and 2024 ARC/PLC election
- Automatic election to be paid the highest amount for 2023 and 2024 crop year even if the farmer originally elected ARC or PLC.

Limit on PLC Payment: The maximum amount of payment for PLC will be 15% of the effective reference price. As example, assume a farmer has a PLC yield of 200 bushels for corn and the effective reference price is $4.30 and the final corn harvest price is $3.50. Under the old PLC rules, the farmer could receive 200 bushels times 80 cents per bushel or $160. Under this proposal, the farmer is limited to 65 cents or $130 per acre.
Partial PLC Payments: Instead of waiting until after October 1 to collect a PLC payment, the farmer, in certain situations may elect to receive up to 50% of the crop beginning February 1. This is based on firm projections by USDA that the final harvest price will be below the effective reference price. If USDA pays too much, then the farmer must pay it back.
Agricultural Risk Coverage: As expected, the Bill increases the guarantee from the current 86% to 88%, less than the 90% in the House Bill. However, not expected, the Bill increases the maximum payment to 12.50% of benchmark revenue, matching the House Bill and makes this retroactive to the 2024 crop. 2023 crop remains at 10%.
Partial ARC Payments: Provides same mechanism for partial payments as under PLC.
Increase to Marketing Loan Rates: For 2025 crops and subsequent years, the loan rate will be the lesser of 110% of current loan rates or an adjustment based on current input costs versus a five-year average.
Sugar Program: Increase sugar cane payment to 24 cents per pound for 2025-2029. Sugar beet growers will receive 136.5% of sugar cane payment rate.
Permanent ERP: Emergency Relief Program would be made permanent (at least until next farm bill). Payment limits of $500,000 for specialty crops and $250,000 for all other crops.
Terms appear similar to old ERP programs, but it does not mandate how USDA will administer it, etc. Also, no extra payment limit if you can prove you are a farmer. This may still be messy for CPAs to help farmers calculate their claim. Also, requires farmers to insure all acres.
Adjusted Gross Income (AGI) limits: AGI limits dropped from $900,000 to $700,000.
- Increases AGI limits to $1.5 million for specialty and high-value crops.
- What happens if a farmer grows both? The Bill does not address this, other than likely leave it up to USDA to come up with rules.
- Waiver of AGI rules available to economically distressed producer.
- It appears that no payments will be allowed if the land is owned by someone or an entity whose AGI is over $700,000. This means that a farmer who is cash renting that ground will not qualify for any payment on that ground. Under current rules and the House Farm Bill proposal, any farmer who is cash renting the ground and their AGI is under the limit will qualify for a payment. This is a major change and will create the law of unintended consequences. They seem to want to not have an incentive for wealthier individuals to purchase land since their high AGI will not qualify them for any payments but under current rules they get no payment anyway.

Increase in CCC Scoring: Section 1708 indicates that for purposes of CBO scoring, the restrictions on utilizing CCC funds shall be $6.7 billion per year for 2024-2033. The last scoring by CBO was $400 million per year.

CRP Rentals Limit Increased to $125,000 from current $50,000

Crop Insurance Changes: Increases subsidies for beginning and veteran farmers and ranchers to essentially match House proposal.
- Increases SCO to allow for payment at 88% instead of 86% of guarantee. House was at 90%.
- Increases premium subsidies.
Makes improvements to Whole Farm and Micro Farm insurance plans.

Comments:

Several contacts, asked to respond to Stabenow’s late farm bill details, used the same words: “Wow, finally, but too late.” Stabenow is departing Congress after this session ends, and veteran farm bill watchers say this late-entry farm bill is not a positive chapter in her long career. Most are asking why she chose today in releasing the details, and why she took a partisan approach in briefing about the matter.

The Scoop Podcast: Could Tech Revolutionize Drift Damage Claims?

Wed, 13 Nov 2024 16:29:59 GMT

The team at Aanika Bio are bringing forward a novel idea---take a packet of synthetic biology (think of a Kool-Aid mix packet), put it in your spray tank, which is then paired with spray drift insurance, and if a drift claim is made, you can get results in a week—not months.

“We think a lot of spray drift claims are handled very subjectively. There’s no real objective data, and there’s a lot of false information out there,” says Aanika Bio co-founder and CEO Vishaal Bhuyan . “We’re actually offering clarity into these situations, because we don’t think in a lot of these circumstances the damages are as bad as made it out to be.”

HOW IT WORKS

Aanika Bio puts their synthetic biology in a dry powder or liquid form, which provides a unique DNA sequence traceable on the leaf’s surface.

“We can actually detect one droplet that’s sprayed onto five pounds of soybean leaves. So it’s literally one square yard of plant surface we can detect one droplet and tell you where that droplet came from,” says Jamie Richards, CTO at Aanika Bio.

Part of the Lloyds of London network, Aanika Bio is backed by a reinsurance company and offers their own insurance underwriting.

“We are offering coverages in a way that has never existed before,” Bhuyan says.

MARKET APPROACH

The company leaders say the product is offered for between $1 to $2/acre. They aim to be on hundreds of thousands of acres in 2025 via partnerships with ag retailers.

Hear more on The Scoop Podcast:

Harvest Prices for Crop Insurance Plunge: What Does It Mean for Farmers?

Wed, 06 Nov 2024 19:08:04 GMT

The Risk Management Agency just released official harvest prices for federal crop insurance, and it’s not good news for farmers.

Harvest price is based on the average price during October. This year, those numbers are well below 2023 and the base prices set in February:

Corn — $4.16 harvest price versus $4.66 base price, a 50¢ drop
Soybeans — $10.03 harvest price versus $11.55 base price, a sharp $1.52 drop
Grain sorghum — $4.17 harvest price versus $4.67 base price, down 50¢
Confectionary sunflowers — down $1.50
Oil sunflowers — dropped $1.20

The drop comes as no surprise to Tony Jesina, senior vice president of insurance, Farm Credit Services of America.

“We’ve seen the trend in play for quite a while, but in October, we did get a little bit of a bump. It could have been a lot worse,” he says. “It’s still bad enough when you think about the price of corn being down 11% from spring and beans roughly 13%. The trend has not been our friend, that’s for sure.”

Lower harvest price levels will trigger some insurance payouts for the 2024 crop, according to Randy Martinson, Martinson Ag Risk Management in Fargo, N.D.

“There’s likely going to be revenue losses in some areas on soybeans. Corn, it’s just going to depend on if you had a lot of rain and drowned out corn,” he says.

With these prices, margins will be even tighter in 2025 and, for some, maybe in the red.

Jesina says farmers need to closely manage their cost of production and safety net.

“You look at the most common policy in place and that policy will not cover your cost of production for 2025,” he says.

Most producers will need to increase their coverage under their underlying policy or add a supplement.

“A lot of producers will look at the Supplemental Coverage Option known, SCO, or the Enhanced Coverage Option, ECO. When you layer ECO and SCO on top of your underlying policy, for most producers that will be enough coverage to provide a safety net that gets close or can actually go above covering their cost of production for 2025,” he explains.

Crop insurance is not an expense to scrimp on, and Jesina recommends paying for higher coverage to help guarantee revenue. In addition, he says crop insurance products are subsidized, and the ECO subsidy went up for the 2025 crop year.

Your Next Read: A Possible Recession Still Hangs Over the Ag Economy, But Positive Shifts Are Starting to Surface

FBN Spins Off Insurance Business

Fri, 27 Sep 2024 18:02:37 GMT

In the past few weeks, FBN transitioned its insurance business to Patriot Growth Services, ranked as the 26th largest broker in the U.S. by Business Insurance.

What was once known as FBN Insurance will now be known as Momentum Ag.

“We are thrilled to join the Patriot family. With the launch of Momentum Ag, we are creating a unique agriculture insurance agency rooted in white-glove service, while delivering a technology-enabled experience for our customers,” said Lucas Strom, President and Founding Partner of Momentum Ag. “Our collective team has over 500 years of experience in the industry, and we have strong relationships with our AIP and carrier partners to continue growing and supporting our clients across the country. Joining Patriot will expedite our growth goals and offer our customers more products and services than ever.”

Momentum Ag will offer crop, livestock, and health insurance products. The business has more than 50 employees, including 41 agents, and is licensed in all 50 states.

Patriot sees this acquisition as a strategy to expand its products into the agricultural insurance market.

“I’m excited to extend a warm welcome to the Momentum Ag team,” said Matt Gardner, Chairman and CEO of Patriot. “Momentum Ag’s integration into our rapidly expanding agriculture niche enhances our capacity to deliver superior solutions to our farm clients throughout the United States. Lucas and his team have built an extraordinary agency, and Patriot is eager to support them as they continue on their growth journey.”

Crop insurance products include:

ECO/SCO
Hail
Margin Protection
MPCI
STAX
Whole Farm Revenue Protection

Health insurance options include:

Enrollment for groups as small as 1 employee up to 500+
Nationwide provider networks
$0 preventive care and telemedicine visits
Optional enhanced ambulance coverage
Personal account representative to help with claims, billing and enrollment

Livestock insurance products include:

Animal Mortality
Annual Forage
Dairy Revenue Protection (DRP)
Livestock Gross Margin (LGM)
Livestock Risk Protection (LRP)
Pasture, Rangeland & Forage (PRF)

Ag Experts: The Election is Big, New Farm Bill is Bigger

Thu, 12 Sep 2024 15:30:08 GMT

The start of a new school year and the warm glow of Friday Night Lights signals the end of summer and the start of fall.

Those same indicators also portend – every four years, anyways – the impending presidential election season . And while presidential politics are certainly influential within the agriculture industry at large, our nation’s farmers currently have a much more pressing need in today’s faltering farm economy: passage of a new Farm Bill.

There hasn’t been a five-year Farm Bill since 2018, and that legislative extension is about to be sidelined by its own expiration.

When can farmers expect a new Farm Bill?
Back in June, Farm Journal asked its Ag Economists Monthly Monitor panel when they expected passage of a new Farm Bill. A combined 68% of the 70 experts surveyed indicated it could be passed in 2025, while just 19% said it could happen before the end of the year. Perhaps the worst-case scenario – nothing on the books until 2026 – is the prediction of 13% of those surveyed.

Farm leaders are beginning to grow impatient, pacing their respective sidelines like the hot seated, anxious head coach trying to rally the troops for that one last, potentially magical two-minute drill that would get this Farm Bill into the end zone. That would signify a big win for farmers, as well as the companies that help them get a quality crop into and out of the ground each year.

As of today, however, it feels like more of a Hail Mary than a one-yard Tush Push to get it over the goal line.

Making the Case
“We need a proper Farm Bill,” states Kurt Coffey, Case IH, vice president – North America. “We need to work beyond an extension and get a farm bill.

“Whether that happens later in the year, during the lame duck period – depending on who’s elected, or next year – the extension for funding that safety net goes through the end of 2024.” he adds. “So, whether we get an extension, the safety net side of crop insurance and the other things that come with it, we need to have that grassroots mobilization.”

Paul Neiffer – The Farm CPA – also strongly supports American agriculture getting the certainty that a new Farm Bill would provide . The agricultural economy is seemingly in a recession, and without an updated Farm Bill, farmers may struggle even more with net farm income expected to be substantially lower in 2025, and existing crop insurance no longer able to provide sufficient relief.

Then, if the upcoming election alters the political landscape in Congress – some are predicting control of the Senate and House could potentially flip-flop – Neiffer thinks that could cause further delay and legislative gridlock.

This whole deal could end up looking like yet another extension of the 2018 Farm Bill coming down on October 1, and then one more in 2025, which nobody really wants, Neiffer believes.

“It’s going to be a struggle,” Neiffer told AgriTalk’s Chip Flory recently. “You know, right now a lot of farmers are still okay for this year, in that we have a higher crop insurance price. But you know, when we go into next year and let’s say the projected price on corn is $3.50 and soybeans are $9. Crop insurance is not going to help us next year.”

Neiffer also shared a troubling development that he’s heard. USDA is reportedly asking some farmers to repay ERP (Emergency Relief Program) payments due to issues with crop insurance coverage on certain acres. This has created additional financial stress for farmers who received these payments based on previous calculations.

“Because once you fail to insure one acre – we’re talking one acre – but once you fail to insure one acre, they go back and recalculate your payment,” he explains. “Now instead of qualifying for the 10% loss coverage, you now must qualify for the 30% loss coverage. So therefore, you don’t qualify for any payment. You have got to pay the full amount back.

“In parts of the Midwest, that is a huge, huge deal,” Neiffer adds, noting he has heard this directly from a handful of farmers and crop insurance agents.

No matter your view of things: analyst, farmer, equipment manufacturer, or even ag retail business leader, we can all agree on one thing. America needs a new Farm Bill, sooner rather than later.

“There needs to be resolution,” Landus CEO Matt Carstens recently told CNBC’s The Exchange. “Farmers are anxious for that and getting it right, and ensuring that it happens is as important as anything right now.”

Your Next Read: Crop Insurance Provides Price Security For U.S. Farmers That’s Not Available To Counterparts In Other Countries

A Crop Insurance Provider's Advice For Adding Sustainable Practices

Thu, 12 Sep 2024 15:29:09 GMT

With the adoption of sustainable farming practices on the rise, more producers may be looking at how double or relay cropping fits into their operations. Sheila Backer, assistant vice president of underwriting at Farmers Mutual Hail Insurance, says it’s important to consider what those changes could mean for crop insurance.

“If you take a step back into what the policy looks like without double cropping or relay cropping, it basically says you can only insure and harvest one crop off a piece of ground,” Backer says.

But in an effort to make it easier for farmers to increase production and lower costs food costs, Backer explains the Biden Administration and USDA’s Risk Management Agency (RMA) are working to make changes to this policy .

“RMA came out and said ‘There are quite a few areas where we can get two crops off of a singular piece of ground in that calendar year, so why can’t we make that insurable?’,” Backer says. “As people are starting to realize the importance of this and the impact that it can have, RMA is recognizing that as well and allowing it to be an insurable practice.”

Requirements For Approval
RMA has started offering written agreements for double and relay cropping, which is a way to insure something they haven’t officially made available yet.

“We can submit a written agreement and say ‘This borrower was able to show a history of doing this practice, so we think they should be insurable.’ If it’s approved by RMA, then it allows insurance to be bound,” Backer says.

The requirements for written agreements vary from county to county. For example, growers in a certain area may need provide up to three years of history of using the practice while others may be able to submit a blanket agreement with no history.

USDA RMA Double Crop Soybeans Map 2023

(USDA RMA)

USDA Relay Crop Map

(USDA RMA)

Since 2022, Backer says number of written agreement offers for relay cropping has increased by 15%. She adds if there are enough submitted, RMA may expand the program’s availability.

“I would encourage you, if you’re interested at all in this, to talk to your agent,” Backer says. “RMA uses all the written agreements they get every year to potentially make things insurable on their own.”

Farmers Are Grappling With Another Price Hike, This Time It's Property Insurance Costs On The Rise

Wed, 24 Jul 2024 18:31:37 GMT

Property insurance costs for farmers and ranchers have been increasing, driven by several factors, including climate change, market conditions, and rising production expenses.

Climate change and catastrophic events:

• Recent years have seen an increase in severe weather events such as hurricanes, floods, and wildfires, which have led to significant insurance claims. This has prompted insurers to raise premiums, increase deductibles, and impose more coverage restrictions to maintain profitability.

• The impact of climate change is not limited to traditionally high-risk areas like coastal regions. States such as Iowa, Arkansas, and Ohio are also experiencing more frequent and severe weather events, leading to higher insurance costs.

Market conditions:

• The insurance market for agribusiness is facing diminished capacity as many insurers exit the market or reduce the amount of business they are willing to write. This limited supply, coupled with sustained demand, results in higher premiums for the available coverage.

• Insurers are becoming more selective, favoring businesses with strong management, effective risk control programs, and good financial health. However, even well-managed farms are seeing rate increases due to the overall market conditions.

Rising production costs:

• Farmers and ranchers are also dealing with rising costs for inputs such as fertilizer, seed, and machinery. These increased expenses make it more challenging to absorb higher insurance premiums.

• The overall cost of farming has been rising faster than commodity prices, putting additional financial pressure on farmers and ranchers.

Impact on farmers and ranchers

• Financial strain: The combination of higher insurance premiums and rising production costs is squeezing profit margins for farmers and ranchers. This financial strain can affect their ability to invest in new technologies or expand their operations.

• Limited coverage options: In areas prone to catastrophic events, farmers may find it difficult to secure affordable insurance coverage. Some may have to rely on high-risk insurance pools or state FAIR plans, which can be more expensive and offer less comprehensive coverage.

• Income stability: Programs like the USDA’s Rainfall Index Pasture, Rangeland, Forage (RI-PRF) Insurance Program help stabilize income by providing payouts during adverse weather conditions. However, these programs are not a complete solution to the broader issue of rising insurance costs.

“The rising cost of production is hitting agricultural producers hard. Coupled with lower commodity prices and higher interest rates mean agriculture is in one of the highest risk environments we’ve experienced in years,” says Ruth Gerdes of Auburn Agency Crop Insurance. “Be mindful and purposeful on every purchase to protect your operation. Nothing the government can offer replaces good management.”

The Nation's Largest Independent Crop Insurance Provider Has Been Acquired

Wed, 03 Jul 2024 22:50:32 GMT

Change is in the air as Silveus — the nation’s largest independent crop insurance provider — announced its acquisition by Risk Strategies, a private insurance brokerage and risk management adviser, at the end of May.

Company leaders share this decision is mutually beneficial for both parties and came as a result of Silveus’ continued growth as well as Risk Strategies’ interest in expanding into agriculture.

“We’ve experienced growth year after year, and we’re a small-town insurance agency that’s working in a big market,” says co-owner Scott Silveus. “We need some of the resources, help and wisdom that comes from a larger insurance broker with the know how to navigate growth into the future.”

Enhanced Offerings

Despite being a small-town agency, Silveus is made up of about 80 employees and offers more than 40 private and federal crop insurance products to clients spanning 40 states. All employees and products are expected to carry over into Risk Strategies, and customers will now have access to Risk Strategies’ wider scope of products as well.

“Really very little is changing. We’re continuing the day after the sale in a very similar manner to what we did the day before the sale with the same leadership, the same core values and the same direction,” Silveus says. “Risk Strategies will allow us to find some of their current customers that may have a need for crop insurance, and then there’s a lot of areas where we are not the experts, but our agricultural customers could benefit. That’s where I think the Risk Strategies folks are going to be a big value add.”

John Scroope, national director of retail operations at Risk Strategies, adds, “It’s not just let’s do everything the same way we did the day before, but how do we try to make one plus one equal a little bit more than two?”

Checking All The Boxes

The idea of adding additional value for their current customer base, but without compromising company culture, was top of mind as Silveus began its search for a partner two years ago. The leaders chose Risk Strategies – which houses more than 30 other specialty practices – due to its emphasis on enhancing the company, not changing it.

“They genuinely care about the unique cultures of the insurance agencies that become part of Risk Strategies,” Silveus says. “We have a great culture, a great leadership team and a great group of agents and salespeople. Their No. 1 priority is keeping that going and intact so we can continue to serve American farmers the way we have been for the nearly 80 years.”

For Risk Strategies, the team from Silveus will serve as experts guiding the company into the crop insurance sector.

“There’s an incredible opportunity for us through Silveus to put a foot in the door into the agricultural market,” Scroope says. “You couldn’t find more dedicated specialists to crop insurance than Silveus. We want to grow with their guidance.”

Crop Insurance Affordability at Heart of FARMER Act

Wed, 17 Apr 2024 13:21:54 GMT

The move to make higher levels of insurance coverage more affordable for U.S. farmers would be a big step toward decreasing their financial risks, according to Harold Wolle, president of the National Corn Growers Association (NCGA).

Wolle discussed the new Federal Agriculture Risk Management Enhancement and Resilience (FARMER) Act with AgriTalk Host, Chip Flory, on Tuesday.

“We are entering a period of lower profitability, and that increases our risks,” Wolle said. “To have these tools in our toolbox is very important.”

The FARMER Act legislation, introduced last week, was sponsored by U.S. Senator John Hoeven (R-ND), a senior member of the Senate Agriculture Committee and Ranking Member of the Senate Agriculture Appropriations Committee.

Hoeven said The FARMER Act improves crop insurance affordability by increasing premium support for the highest levels of coverage and enhancing the Supplemental Coverage Option (SCO). Making higher levels of coverage more affordable will shrink producer deductibles and reduce the need for ad-hoc disaster assistance in the future, Hoeven said, in a summary of the bill.

“The bill does not require producers to choose between enhanced crop insurance coverage and commodity support programs, allowing them to make decisions that work best for their operations,” Hoeven added.

Wolle, who farms near Madelia, Minn., said the legislation, if approved, would increase the premium support for revenue protection and yield protection policies. That would include:

- increasing premium support for certain revenue protection and yield protection policies at the 80% coverage level from 68% to 77% and at the 85% coverage level from 53% to 68%;

- increasing premium support for the Supplemental Coverage Option (SCO), an area-based plan, from 65% to 80% and increase the SCO coverage level from 86% to 90%; and

- directing the Risk Management Agency to conduct a study to improve the effectiveness of SCO in counties larger than 1,400 square miles.

“As you well know, crop insurance is the No. 1 risk management tool that our nation’s corn farmers have, and NCGA is always supportive of improving crop insurance,” Wolle said.

In addition to NCGA, the bill has the endorsement of more than 20 farm groups including the American Farm Bureau Federation, National Cotton Council, American Soybean Association, Crop Insurance Professionals Association and the National Association of Wheat Growers.

Next Steps On The FARMER Act
The proposed legislation by Sen. Hoeven is essentially a so-called marker bill that would get the proposed insurance enhancements in front of Congress for consideration. If the legislation was approved, it would then go into effect under the auspices of the next farm bill.

Wolle told Flory he is hopeful progress will be made on the farm bill yet this spring.

“It’s not like they’re saying, ‘Hey, we’re not going to deal with this until after the election.’ So I’m very glad that Chairman Thompson and everybody involved on the House and Senate Ag Committee are wanting to get this done.”

House agriculture chairman Glenn “GT” Thompson said last week that he aims to push a bipartisan farm bill through “a key committee” before the end of May.

Agriculture leaders say action on the farm bill is needed because a one-year extension of the 2018 farm bill will expire on September 30, 2024.

Check out CPA Paul Neiffer’s article here on How Not To Do Crop Insurance

NCGA Addresses Crop-Protection Tools
During the AgriTalk discussion, Flory asked Wolle for insights on a petition Corteva filed recently with The International Trade Commission.

“You were in D.C. not that long ago, testifying on why imports of 2,4-D and other crop protection tools are important. Tell us about that trip,” Flory said.

Wolle said Corteva filed the petition with the International Trade Commission to have anti-dumping and countervailing duties applied to imports of 2,4-D acid from India and China.

“An anti-dumping duty is levied when a product is being imported below the cost of production. A countervailing duty is implemented when a country’s government unfairly subsidizes the production of that commodity,” Wolle explained.

“Corteva is maintaining that both of those situations apply to imports of the 2,4-D acid from both of those countries. If that would happen, it would increase the cost of 2,4-D to our nation’s corn and soybean farmers, to all of our farmers,” Wolle added.

While Wolle said corn growers “don’t use a lot of 2,4-D,” it’s an important weed-control tool and plays an important role in conservation farming efforts.

“If we’re going to burn down the weeds before we plant, 2,4-D is one of the staple pesticides used to control those broadleaf weeds. So, it’s a very important, long-time chemical that we need to have in our toolbox and at a reasonable price,” Wolle said. “Here again, this cost-price squeeze affects the nation’s farmers. This becomes more and more important that we have access to these tools at affordable prices.”

More news on early-season weed control for 2024 available here: 3 Tips For Better Weed-Control Outcomes This Season

Tariff Imbalance With Brazil
Flory asked Wolle whether efforts to remove or reduce Brazil’s tariffs on the imports of U.S. ethanol are going to happen.

“I don’t know,” Wolle replied. “We need to emphasize that again and again. Brazil charges us an 18% tariff for our ethanol going into their country and we only charge them 2.4%. That’s not right.”

See more about the ag boom in Brazil here: Brazil’s Biggest Growing Sector: Agriculture

The complete AgriTalk discussion is available here:

Should You Choose ARC or PLC on Sept. 1?

Mon, 07 Aug 2023 15:04:34 GMT

On Sept. 1, you have a big deadline. For the first time since the programs were created by the 2014 farm bill, you can switch your elections for Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC).

Under the new farm bill, farmers will decide between ARC or PLC for each of their eligible commodities and that decision will remain in effect for the 2019 and 2020 crop years. After that, it’s an annual election through 2023.

ARC is both a price and yield payment similar to revenue crop insurance, while PLC is strictly a price payment, says Paul Neiffer, principal and CPA with CliftonLarsonAllen.

PLC make payments when the crop year price is below reference prices. The reference prices for corn and soybeans were set for 2014-2018 by statute at $3.70 and $8.40 per bushel, respectively.

Meanwhile, ARC makes payments when crop year county revenue is below the county’s reference revenue. A county’s reference revenue equals 86% times the Olympic average price for the last five crop years times the Olympic average county yield for the last five crop years. (The reference revenue has a floor since the price used to calculate it cannot decline below the PLC reference prices.)

More than 90% of all corn and soybeans growers choose ARC over PLC in 2014. “From a historical standpoint for corn and soybeans, ARC was almost a slam dunk,” Neiffer says. “Back then, you had to select one program for five years. We knew ARC was going to make a good payment in most of those years.”

Listen to Neiffer discuss the ARC and PLC decision with Andrew McCrea on the Farming the Countryside podcast :

After running some numbers , Neiffer says for some farmers PLC looks to be a clear winner. But neither option will pay like ARC did under the 2014 farm bill, he says.

“For the next couple of years, PLC is likely going to make a payment more often than ARC because the only way ARC is going to make a payment is if yields for the county drop by 15% to 20% or the actual ending price is 15% or 20% lower than then the reference price,” Neiffer says.

For example, assume a farmer has county average corn yields of 175 bu. per acre and county average soybean yields of 50 bu. per acre.

For corn, if yields remain average, no ARC payment is made until the price drops close to $3, Neiffer says. At that price level, ARC pays $31.85 per acre and PLC pays $110 per acre (PLC yield equal to 90% of average). If yields drop by 7% (to about 163 bu. per acre), ARC would then pay $69.35 per acre at the $3 price and if yields drop all the way to 150 bu. per acre, then ARC pays $106.85.

“Yields would really need to drop, and prices would need to be at the $3 level for ARC to even equal PLC,” Neiffer says. “It is still likely that changing to PLC is the prudent option for corn. Only if yields look really low around the end of August would you want to consider switching back to ARC.”

For soybeans, Neiffer looked at Marketing Year Average (MYA) prices of $8, $8.40, $8.80, $9.20 and $9.60. “PLC does not make any payment until the MYA price drops below $8.40,” he says.

At $8, PLC pays $18 per acre (PLC yield of 90% of average). ARC makes no payment if yields remain average. If the county yield drops to 45 bu. per acre, then ARC will pay $38 at the same $8 MYA price and will pay $2 if the price is at $8.80. If yields drop to 40 bu. per acre, then ARC will pay $78 per acre at the $8 price.

“PLC is probably going to be what most people are going to be choosing just because it looks like it’s going to pay more in this this two-year window for corn,” Neiffer says.

However, Neiffer says, soybeans are a trickier equation. “When I was doing my calculations on soybeans it’s almost like we’re flipping a coin,” he says. “If you don’t think prices are going to drop below $8.40, then you might as well sign up for ARC, but if you think there’s a substantial chance it will drop below $8.40, then I’d probably lean toward PLC.”

Since signup is on Sept. 1, Neiffer assumes most farmers will wait until July or August to gauge the trend in the futures market.

Read More

ARC Versus PLC

Find more tax tips and financial analysis on Neiffer’s The Farm CPA blog .

3 Topics Producers Should be Tracking in the Farm Bill

Wed, 31 May 2023 15:23:48 GMT

It’s no secret that conservation and insurance will be heavy topics of discussion in ongoing farm bill debates this year. But it’s difficult to understand the exact role each title will play in legislation.

There might be some insight from House Ag Committee Chairman Glenn Thompson (R-Pa.).

“We don’t need to rewrite the entire farm bill,” Thompson says. “We’re comfortable with many parts of the 2018 bill and there aren’t many tweaks or changes, instead things we need to protect and invest in more.”

With Thompson’s words in tow, Kala Jenkins, Pinion ag consultant, and her colleague Bill Penn, Director of Farm Program Services, have carved out their own theories on what to expect in farm bill 2023.

Here’s a highlight of what they’re tracking as we move through the year.

1. Program Limitations with FSA

USDA defines a small farm as one that sees gross cash farm income under $250,000. According to the agency’s 2021 data, large farms—operations that gross more than $250,000—account for 85% of ag’s market value.

But these income brackets often leave small producers emptyhanded when it comes to disaster programs, according to Senator Chuck Grassley (R-IA).

“The 2018 Farm Bill was intentionally written to help the largest farmers receive sometimes millions of dollars of subsidies from the federal government each year,” Grassley said to USDA Secretary Tom Vilsack in a Senate Ag Committee hearing. “I’m asking that you would now work with me to stop this needless abuse of taxpayer dollars.”

Related story: Crop Insurance, Production Costs, ERP Among Key Topics at Senate Ag Farm Bill Hearing

Penn, who formerly served as USDA’s Assistant Deputy Administrator from 1985 to 1993, doesn’t see the aid differences as abuse and wants aid to go to the producers who make the biggest difference.

“Congressmen always like to talk about how 10% of the producers are getting 70% of the payments, but those 10% of growers are producing 85% of our supply,” Penn says. “If the goal of aid is to ensure America’s needs are met, we have to offer protections to those that put in the work.”

2. AGI Calculations

Adjusted gross income (AGI) is used to determine eligibility for disaster programs, through means testing.

Penn formerly served as USDA’s assistant deputy administrator from 1985 to 1993. He says in the 1980’s, disaster programs means testing was determined through gross receipts rather than AGI. Penn believes AGI is a better test for means testing than gross receipts because it is a “net income” number rather than a gross revenue number.

Related story: Paul Neiffer: PARP – Will You Get Anything?

However, in the recent WHIP+ and ERP Programs, USDA used AGI as a test to determine if someone was a farmer. In Penn’s view, gross receipts is a better measure of who is a farmer when compared to AGI.

“If a farmer has a bad disaster year, he might have a negative net income or AGI. But his wife, a schoolteacher who has a $70,000 positive, non-farm income would push them out of WHIP+ eligibility for increased limitations due to their AGI,” he says.

Penn says when the government is carving-out a disaster aid plan, it must be careful what question it is trying to answer with balance sheet numbers, or aid won’t be inclusive.

But, Penn is concerned if AGI limitations are applied to crop insurance.

3. Crop Insurance Coverage

In the past 20 years, the Federal Crop Insurance Program has covered an average of 87% of all U.S. croplands that were eligible for the program.

So, is a climate angle how crop insurance should be viewed? Jenkins isn’t convinced. She says the bottom line is in making programs voluntary.

“If we focus solely on climate and conservation in all our farm bill initiatives, could we miss something in the literature that could make certain practices mandatory instead of voluntary? That’s the concern we’re hearing from growers now.”

Related story: Commodity Programs Might See a 12% Cut in the Proposed $1 Trillion Farm Bill

Beyond conservation, Jenkins hears whispers of Title XI programs taking an entirely different direction in 2023.

“I’ve heard chatter about whether we need to change the way some of these programs work today, like whole farm crop insurance programs versus the noninsured crop disaster assistance program.” she says. “Then there are also some stakeholders questioning whether we need to link insurance to conservation, while others don’t want it to be the main focus. The needle is all over the board.”

$709 Billion Farm Bill Will See a Budget Increase, According to G.T. Thompson

Wed, 03 May 2023 14:07:42 GMT

The 2023 farm bill is projected to cost $709 billion, based on estimates from the Congressional Budget Office released in February . But, will that price tag be enough to feed Americans and ensure U.S. ag remains competitive in world markets? Not all congressmembers are convinced. And they’re putting their foot down on the matter now.

Additional farm bill funding will be made available, according to House Ag Chairman G.T. Thompson (R-Pa.) who shared the news at a crop insurance agents’ event (CIPA) in Kansas City.

Thompson did not specify how much additional funding but was very complimentary of House Speaker Kevin McCarthy (R-Calif.), mentioning how the speaker participated during a California-based farm bill listening session. During the chairman’s presentation to CIPA, he was passionate about getting a farm bill done, but acknowledged several hurdles that he said could be overcome in a bipartisan approach.

Other options to providing more than baseline funding for the farm bill include clawing back some of the unspent COVID-19 relief funding and restrictions on use of Commodity Credit Corporation (CCC) Charter Act funding.

Is There Anything New from the Latest Farm Bill Debate?

Fri, 24 Mar 2023 15:13:05 GMT

This week we had a farm bill-related conference, a hearing and lots of talk about a new farm bill. But nothing really new surfaced after all that mostly noise. Here’s a quick recap.

Farm Bill Timing

Sen. John Boozman’s (R-Ark.) comment that he’s “feeling good” about the new farm bill’s timely passage was met with laughter from wonks and lobbyists attending a farm policy confab, those so-called “smart money” experts who are frequently wrong.

Upshot

Sen. John Thune (R-S.D.) in his presser this week accurately forecast that nothing new about the farm bill will likely surface until after the debt limit debate is completed (remember that ahead). That will take months to unfold.

We need to know the final funding level before there are any attempts to mix and match to get to a final bill/scoring. And Republicans must come to grips with the third rail of farm bills: don’t alter SNAP/food stamps with draconian language or funding reductions that will be defined by Democrats.

What Thune Knows and Apparently Many Others Do Not

On IRA dollars, remember that everyone agrees they cannot all be spent by September 30, 2031, when the new money dries up. So, it makes sense to use the money that cannot be spent anyway on other things.

Shifting Funding Around a Big Hurdle

Sen. Thune chatted about his farm bill priorities — including raising commodity reference prices and protecting crop insurance. Nothing new there. But when the conversation turned to conservation, and the almost $20 billion for climate-smart agriculture in Democrats’ party-line Inflation Reduction Act, Thune suggested Republicans might come for that pot of money.

Good luck having to deal with a farm bill leader veteran: Senate Ag Chair Debbie Stabenow (D-Mich.), who cheered the billions of dollars in climate-smart funds to cut down on farming’s carbon emissions.

“With these landmark investments, we are equipping farmers, foresters, and rural communities with the tools they need to be a part of the climate solution,” Stabenow said in August.

Bottom Line

A Democratic-controlled Senate is unlikely to relinquish that money. Thus, more funding is needed or a realization that the billions of dollars in ad hoc aid funded by taxpayers over the past several years must be reworked into the crop insurance program to make it more reflective of today’s agriculture. But that may take some tweaks that some key crop insurance users do not want.

Besides food stamps, crop insurance reform will be the big farm bill debate ahead. We heard little about that this week.

Commodity Programs Might See a 12% Cut in the Proposed $1 Trillion Farm Bill

Fri, 17 Feb 2023 19:59:17 GMT

The Congressional Budget Office unveiled its 10-year cost estimates (2024 to 2033) for existing farm bill programs on Wednesday, with a projected $1.5 trillion price tag, up from $867 billion in the 2018 farm bill.

Jim Wiesemeyer, Pro Farmer policy analyst, advises not to put too much weight in these estimates, as they are the reason the farm bill is out of date so soon after it is written.

“CBO’s farm bill forecasts are frequently well off the mark in either direction,” he says. “It’s a lot like USDA’s farm income projections in February for the year head. CBO looks out 10 years … good luck taking these forecasts too seriously.”

So, will this amount of money keep the programs ahead of their time? Some aren’t convinced. And it starts with the farm bill’s largest funded program—Supplemental Nutrition Assistance Program (SNAP).

SNAP Spending

Based on the 10-year period, SNAP spending is nearly 82% larger than what it was granted in the 2018 Farm Bill at $663 billion.

A large portion of the increase is due to the administration’s re-evaluation of SNAP’s the Thrifty Food Plan (TFP), which resulted in a quarter-trillion-dollar increase in SNAP benefits from July 2021 to the May 2022 baseline.

In the most recent baseline, CBO increased its estimate of outlays for SNAP by $93 billion over the 2023–2032 period for “technical” reasons.

According to Sen. Boozman (R-AR), these reasons are rooted in “unacceptable” $250 billion spending by the USDA on TFP—which was supposed to have cost nothing—in the previous farm bill. Boozman made his sentiments known at a Senate Ag Committee farm bill hearing on nutrition on Thursday.

“Congress had no intention of your team spending that, and if you understood that was going to happen, you should have alerted Congress,” Boozman said to Cindy Long, USDA administrator. “How can we trust you going forward to give us advice? Spending a quarter of a trillion dollars from this committee is totally unacceptable.”

Related articles: How Long Does it Take to Write a Farm Bill?

While Boozman is adamant other program will suffer funding losses due to the “unsustainable” TFP increases in the coming bill, Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.) says that’s not the case.

“Whether commodity or SNAP programs go up or down, these monies aren’t traded. So, cutting SNAP won’t add money to the commodity title,” Stabenow says.

The 2018 bill enacted policy for a “thorough” farm bill update that hadn’t been done since 1975, according to Stabenow. She says the TFP increases fall under that update umbrella.

“The Trump administration chose not to use that [update and funding] because that was 2018—they chose not to proceed,” Stabenow rebutted. “The Biden administration came in and chose to proceed with those funds, and I’m glad they did.”

The General Accountability Office (GAO) has since determined USDA failed to submit the TFP food basket increase to Congress as a rule as required by the Congressional Review Act.

Row Crop Safety Net

Disaster programs such as the Market Facilitation Program (MFP), Coronavirus Food Assistance Program (CFAP), Wildfire and Hurricane Indemnity Program Plus (WHIP+) and Emergency Relief Program (ERP) saw billions of dollars moved from taxpayers to producers in the past 10 years, with USDA reporting the largest spike in 2020 at $45 billion.

According to estimates from the House Ag Committee, CBO’s 2023 baselines compared to the 2018 farm bill will cause changes over the five-year period in:
• Commodity programs—12% decrease
• Conservation—19% increase
• Nutrition—82% increase
• Crop insurance—26% increase

However, CBO’s latest baseline provides no built-in ad hoc for these programs.

“If Congress doesn’t provide more funding/investments for Title 1, it puts pressure on farm-state lawmakers to continue the billions in ad hoc aid,” Wiesemeyer says. “Some analysts say reforming Title I would mean spending far less than continuing ad hoc assistance. If Title I is not made more effective, farmers will keep wondering if Congress will fund more emergency aid.”

Related articles: The Cost of a Farm Bill: 2023 Row Crop Priorities

GAO released a report stating that those wanting to change crop insurance program features will try to use to their advantage.

Here are the changes GAO says Congress could make to mitigate the programs costs:

• Reduce subsidies to high-income participants by creating an income limit.
• Adjust compensation to insurance companies to better align with market rates.

Livestock Safety Net

Dairy and livestock did, however, receive a safety net mention in CBO’s baselines.

Under the Dairy Margin Coverage (DMC) program, CBO forecasts FY 2023 payments will total $194 million in FY 2023, with those increasing to $248 million in FY 2024 and $266 million in FY 2025. For the rest of the period—through FY 2033—they are forecast between $196 million and $265 million, for a total of $2.531 billion.

Livestock disaster payments are expected at $621 million in FY 2023 and forecast between $562 million to $591 million over FY 2024 to FY 2033, for a total of $6.333 billion.

Crop Insurance, Production Costs, ERP Among Key Topics at Senate Ag Farm Bill Hearing

Fri, 10 Feb 2023 21:00:25 GMT

A Senate Ag Committee hearing Thursday on the new farm bill raised a issue that is now evident: the Title 1 farm bill safety net can no longer deal with the current ag environment of rising production costs and relatively high prices for some commodities. USDA officials also faced criticism about its handling of Phase 2 payments via the Emergency Relief Program (ERP).

Other topics that have previously surfaced included Republican concerns about climate and conservation changes to crop insurance, while Democrats continued to urge expansion of the program to more producers.

Need for change

Senate Ag Chair Debbie Stabenow (D-Mich.) said the 2018 Farm Bill largely lived up to expectations, but she suggested its successor must deal with several challenges: increasingly damaging natural disasters and accelerated costs of production.

“There are still gaps in the farm safety net as farmers continue to face global market uncertainty and climate-fueled weather disasters,” she said. “While many commodity prices are at historic highs, which is good, we also know that land and fertilizer and input costs are also near record highs.”

Farm safety net gaps

Ranking Member John Boozman (R-Ark.) said a focus on boosting nutrition and climate programs has obscured the fact that farm safety net programs like Price Loss Coverage (PLC) are ill equipped to deal with the current situation.

Related articles: Stepped-Up Basis Leaning in Favor of Rural America on House Ways and Means Panel

“Prices for many of our major commodities would have to drop sharply before the current Title 1 Price Loss Coverage safety net would start to work,” Boozman said, noting corn prices would need to plummet 46% before PLC would provide enrolled farmers any assistance. “By the time corn prices fell that low, the significant damage would have already been done.”

Sen. Tommy Tuberville (R-Ala.) asked if USDA had looked at how the two safety net programs respond to inflation, such as adjusting reference prices — which trigger payments under the PLC program.

“I will tell you my legislative staff is always quick to tell me to emphasize that Congress writes the farm bill, and then that’s going to be important here too, obviously those reference prices are in statute,” USDA Undersecretary for Farm Production and Conservation Robert Bonnie told Tuberville. “When we talk to producers, there’s lots of concern about obviously rising input costs,” he added, but then emphasized USDA can only operate farm safety net programs as dictated by Congress.

USDA disaster aid implementation was both praised and criticized

Democrats and Republicans agreed with farmers who have complained about USDA’s methodology for payments under Phase 2 of the ERP, saying they do not adequately compensate farmers for their losses. “I appreciate USDA’s efforts through Phase 1 of ERP, which generally worked well in supporting producers with crop losses and [2020 and 2021],” said Sen John Thune (R-S.D.). “But the Phase 2 methodology… often does not accurately reflect crop losses that Congress meant to cover.”

Thune urged USDA consider reverting to the approach used in Phase 1 of the ERP effort for 2022 losses, a suggestion echoed by Sen. Amy Klobuchar (D-Minn.), who said farmers in her state “are grateful for the quick and effective approach taken during the implementation of ERP Phase 1,” but “a number of them have been less enthusiastic of the income tax-based approach taken during the rollout of ERP Phase 2.”

Bonnie said USDA’s approach on ERP Phase 2 focused on ensuring more producers had access to aid, but said if there are resources remaining after the effort the department may look at a shallow loss effort to address some of the concerns with Phase 2.

Related articles: The Cost of a Farm Bill: 2023 Row Crop Priorities

Bonnie said ad hoc programs like ERP have helped farmers facing disaster-related losses, but he stressed that federal crop insurance remains a key risk management tool, and that USDA has worked to expand the program to cover more producers.

Crop insurance and climate intersect

Boozman again raised a concern voiced by many Republicans about any move to use crop insurance to incentivize climate or conservation practices — which GOP members contend could undermine the actuarial soundness of the program and move it away from its core focus as a risk management tool.

“Can you commit to making sure that any efforts to expand the crop insurance programs are science based, peer reviewed, and protect the integrity of the program,” he asked Bonnie, saying a “one-size fits all” approach that elevates certain practices like cover cropping could disadvantage farmers in areas where those practices are not practical.

Bonnie responded that “with respect to crop insurance, everything we have to do has to be actuarially sound as we’ve got to maintain the integrity of crop insurance.” He said recent incentives offered to farmers for cover cropping have taken the form of premium rebates — not changes to premiums or the overall premium subsidy paid by the government.

Stabenow praised federal crop insurance, calling it “the number one risk management tool for producers.” However, improvements are needed, she said, promising improvements to the program, “including specialty crop growers, organic producers, beginning and diversified farmers.”

Regarding prevent plant coverage

Sen. Ben Ray Lujan (D-N.M.) asked if USDA was looking at expanding prevented plant coverage under crop insurance, which pays farmers when they are unable to plant an insured crop due to extreme weathers. He noted eligibility currently hinges on a farmer being able to plant, insure and harvest crops in one of the four preceding crop years — known as the four-in-one rule — and some farmers in the West are at more risk of losing coverage due to prolonged drought conditions.

“One in four is very regionalized in a lot of cases,” acknowledged USDA Administrator Marcia Bunger. “So, for this coming year, we’ve made an exception for several western states to step outside of that one and four,” adding USDA would consult with stakeholders over the next year about a potential long-term solution to the issue.

Related articles: How USDA’s $2.8 Billion Climate-Smart Investment Might Impact Your Operation

USDA climate program efforts were raised by Sen. Chuck Grassley (R-Iowa), who noted concern over USDA’s move to tap more than $3 billion from the Commodity Credit Corporation (CCC) to fund its Partnerships for Climate-Smart Commodities (PCSC) effort that funds climate-smart ag pilot projects.

“Spending over $3 billion without input from Congress is a serious concern for everybody in the Congress,” Grassley stated.

Grassley then asked Bonnie if USDA had any plans to tap CCC for additional USDA programs. Bonnie reiterated what USDA Secretary Tom Vilsack has said — that PCSC falls within the CCC’s charter as it looks to expand and create new markets for ag commodities.

However, Bonnie ultimately said there were no plans for new CCC-backed programs under the Farm Production and Conservation (FPAC) mission area.

The Cost of a Farm Bill: 2023 Row Crop Priorities

Wed, 08 Feb 2023 15:35:54 GMT

The 2018 farm bill was stamped with a $428 billon price tag when the bill was passed. Nutrition, crop insurance, commodities, trade and conservation programs were among the programs to receive the most funds.

With the 2018 bill set to expire on Sept. 30, the Congressional Research Service last May released baseline spending for the same programs starting in the 2023 farm bill. The baseline shows a decrease in commodities and conservation, while nutrition, trade and crop insurance increased.

As the debate heats up, here’s a breakdown of what ag groups look to push on the 2023 farm bill negotiating table:

1. Crop Insurance

Industry leaders sounded the crop insurance alarm on the The Hill in Jan. when some 60 groups signed a letter to Senate and House Ag Committee members, pushing for protections from “harmful” insurance cuts.

“Farmers spend as much as $4 billion per year of their own money to purchase insurance from the private sector. On average, farmers also must incur losses of almost 30 percent before their insurance coverage pays an indemnity,” the groups wrote in the letter. “Given the challenges faced by rural America and the critical nature of crop insurance, cuts to the program should be avoided.”

Crop insurance is permanently authorized in a farm bill. However, amendments are often posed to the crop insurance title, adding an element of concern for producers.

Leaders at the American Soybean Association (ASA) are looking to play defense in the title, says Christy Seyfert, ASA executive director of government affairs.

“In the past, amendments have been proposed to use crop insurance as a funding resource for priorities outside of crop insurance,” Seyfert says. “We’re looking to protect against harmful amendments that make crop insurance more expensive for farmers.”

Read more: Stepped-Up Basis Leaning in Favor of Rural America on House Ways and Means Panel

National Association of Wheat Growers (NAWG) is aiming to take a different approach.

“We’re looking to maintain and enhance the crop insurance reach for producers by expanding current authority and programs,” says Chandler Goule, NAWG CEO. “To help with continued market fluctuations and erratic weather patterns, we’re leaning more into the revenue side.”

2. Farm Safety Net

Most farmers who grow row crops will soon be making their decision between Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) .

The 2014 Farm Bill first introduced ARC and PLC with a reference price, while the 2018 Farm Bill allowed the reference price to increase by up to 15%, which is why it is now called the effective reference price.

This reference price should be a focus in 2023, according to Wayne Stoskopf, director for public policy for risk management and tax at National Corn Growers Association (NCGA) .

“The effective reference price is definitely something we want to maintain,” he says. “We’re looking at how much it would cost, as well as some of the potential benefits, if it or the statutory reference price we’re to be increased.”

Read more: ARC or PLC - Which Do I Choose for 2023

Goule echoed Stoskopf, saying with the increase in the cost of goods, services and inputs since 2018, a $5.50 reference price for wheat is “simply not a realistic backstop” of what it costs to produce a bushel of wheat in the U.S.

“We’re encouraging Congress to increase budget authority so we can raise the reference price to something that’s reflective of our current circumstances and potential costs in coming years,” Goule says.

3. Trade

U.S. ag exports reached a record high of $196.4 billion in fiscal year 2022, according to USDA. With $237 million in funding for the Market Access Program (MAP) and Foreign Market Development Program (FMD) for 2023, Seyfert foresees another export record. However, her team thinks more funding could be impactful.

“We’re looking to double funding for MAP and FMD in the next farm bill,” she says. “A jump to $400 million and $69 million, respectively, will help us continue to build relationships internationally.”

Read more: SHIP IT Act Could Save Truck Drivers Up to $10,000 and Cover CDL Costs

According to Seyfert, ASA and other associations feel increased investments will open new doors to untapped markets overseas.

How the $1.7 Trillion Omnibus Spending Package Might Impact Your Operation

Tue, 20 Dec 2022 17:19:29 GMT

Text of the $1.7 trillion omnibus spending package was released early Tuesday morning. The Senate will vote first and intends to pass the measure before Thursday, leaving the House no time to demand changes before the Christmas holiday.

Here are the details that might impact your farm:

Disaster Relief

• $250 million in aid to rice producers and $100 million to cotton merchandisers to make up for losses related to the pandemic or supply chain disruptions. USDA previously provided $80 million in aid to textile mills and other cotton users. For rice, USDA would determine payment rates based on yield history and acreage.

• $40.6 billion for drought, hurricanes, flooding, wildfire, natural disasters and other matters — $3.7 billion in disaster aid for farmers to cover 2022 crop and livestock losses.

Food Aid

• Funds two programs that provide foreign food aid. These include the Food for Peace Program (PL 480), which is funded at $1.8 billion, and the McGovern-Dole International Food for Education Program, which is funded at $248 million, for an increase of $11 million over fiscal year 2022.

• Summer Meals Program Modernization: Updates the summer food service program to permanently allow states to provide non-congregate meals and summer electronic benefit (EBT) options nationwide to eligible children in addition to meals provided at congregate feeding sites. Non-congregate meals, such as grab-and-go or home delivery, would be provided in rural areas to eligible children, and summer EBT benefits would be capped at $40 per child per month. This provision is fully offset and based largely on the Hunger-Free Summer for Kids Act, which Boozman authored and introduced earlier this Congress.

• Supplemental Nutrition Assistance Program (SNAP) EBT Skimming Regulations and Reimbursement: Requires USDA to coordinate with relevant agencies and stakeholders to investigate reports of stolen SNAP benefits through card skimming, cloning and other similar fraudulent methods. This provision aims to identify the extent of the problem, develop methods to prevent fraud and improve security measures, and provide replacement of benefits stolen through these fraudulent actions.

Conservation

• Cracks down on “conservation easements,” which allow tax breaks when land is dedicated for conservation purposes. The IRS has identified the transactions as a method for avoiding taxes. The conservation easement provision was expected to raise between $6 billion and $7 billion.

• SUSTAINS Act: Enacts a House bill that allows corporations and other private entities to contribute funding for conservation projects and authorizes USDA to match up to 75% in matching the donations.

Inputs

• Pesticide Registration Improvement Act (PRIA 5) Reauthorization: Reauthorizes pesticide registration and review process user-fee programs administered by the Environmental Protection Agency (EPA) and increases registration and maintenance fees to support a more predictable regulatory process, create additional process improvements, and provide resources for safety, training, bilingual labeling, and other services to advance the safe and effective use of pesticides.

• Pesticide Registration Review Deadline Extension: Extends deadline for EPA to complete registration review decisions for all pesticide products registered as of October 1, 2007. EPA is facing a significant backlog of pesticide registrations due to a variety of factors over the past several years, which raises potential implications for continued access to numerous crop protection tools. The agency will be allowed to continue its registration review work through October 1, 2026, as a result of this extension.

Climate

• Growing Climate Solutions Act: Incorporates updated language from the Growing Climate Solutions Act, which directs USDA to establish a program to register entities that provide technical assistance and verification for farmers, ranchers and foresters who participate in voluntary carbon markets with the goal of providing information and confidence to producers.

Farm Business

• $1.92 billion for farm programs, which is $55 million above the fiscal year 2022 enacted level. This includes $61 million to resolve ownership and succession of farmland issues, also known as heirs’ property issues. This funding will continue support for various farm, conservation, and emergency loan programs, and help American farmers and ranchers. It will also meet estimates of demand for farm loan programs.

• Funding for specialty crops and remarks on crop insurance/A&O. Some $25 million is being made available for specialty crop equitable relief and report language directing USDA to use its legal authority to index all A&O (crop insurance program) for inflation and provide equitable relief for specialty crops going forward.

Livestock

• Livestock Mandatory Reporting Extension (LMR) Extension: Extends livestock mandatory reporting requirements until September 30, 2023. LMR requires meat packers and importers to report the prices they pay for cattle, hogs, and sheep purchased for slaughter and prices received for meats derived from such species to USDA who then publishes daily, weekly, and monthly public reports detailing these transactions.

Markets

• Commodity Futures Trading Commission (CFTC) Whistleblower Program Extension: Enables CFTC to continue payment of salaries, customer education initiatives and non-awards expenses related to the whistleblower program to ensure it can continue to function even when awards obligated to whistleblowers exceed the program fund’s balance at the time of distribution.

Some ag sector items that did NOT make the omnibus package:

Nothing for the proposed farmworker labor reforms from Sen. Michael Bennet (D-Colo.) and others. The bill also left out legislation to reform cattle markets or appoint a special investigator at USDA to investigate possible anti-competitive behavior in the meatpacking sector.

We’ll be updating this article as more details become available.

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