In early January, Congress voted to extend the 2008 Farm Bill, which expired on Sept. 30, 2012, for an additional year, with a new expiration date of Sept. 30, 2013. This means that most existing programs in the 2008 Farm Bill will continue for the 2013 growing season. The USDA Farm Service Agency (FSA) recently announced that sign-up for the 2013 farm program will begin on Feb. 19, 2013, at local FSA offices, and run through Aug. 2, 2013.
Direct payments will be continued for the 2013 crop year as part of the 2008 Farm Bill extension. Eligible producers will need to enroll in the Direct and Countercyclical Program (DCP) at local FSA offices during the designated enrollment period in order to receive the 2013 direct payments. Payment rates and eligibility requirements for 2013 will remain the same as in 2012. Payment rates are 28¢/bu. for corn, 44¢/bu. for soybeans and 52¢/bu. for wheat, which are paid on 85% of the eligible crop base acres. Direct payments will be made in October 2013, and there will be no advance payments made. Payment limits and adjusted gross income criteria will apply to the 2013 direct payments.
There have been some reports that direct payments will not occur for 2013; however, direct payments are likely to occur, given the extension if the 2008 Farm Bill through Sept. 30, 2013. If Congress is able pass a new five-year farm bill in the coming months, it will likely be implemented for the 2014 crop year, and not be made retroactive for the 2013 crop year. In all likelihood, direct payments will be eliminated in 2014 and beyond by the new farm bill, as all versions of a proposed new farm bill call for elimination of direct payments. It is still possible that Congress could still reduce the level of direct payments for 2013, as part of a comprehensive budget reduction package in the next few months. That reduction could be made by lowering the payment percentage from 85% of eligible crop base acres to a lower percentage.
Producers enrolled in the Average Crop Revenue Election (ACRE) program as part of the 2008 Farm Bill will have the option to opt out of the ACRE program for the 2013 crop year when they enroll in the 2013 farm program at their local FSA office. Previously, producers were required to remain in the ACRE program through the 2012 crop year, once they enrolled in ACRE. Most producers in the ACRE program enrolled for the 2009 crop year. Enrollment in the ACRE program requires a 20% reduction in the level of direct payments.
Farm operators currently enrolled in ACRE will have until June 3, 2013, to decide if they want to continue in ACRE for the 2013 crop year or opt out of the program. Similarly, producers who have not previously been in ACRE will have the option to enroll in ACRE for the 2013 crop year. Due to the increased crop prices in recent years, ACRE guarantees for corn and soybeans are likely to be significantly higher for 2013 than in previous years. Acre payments for 2013 are based on the USDA average crop prices for corn and soybeans from Sept. 1, 2013 to Aug. 30, 2014, and not on current price levels. Given the ongoing concern over drought in 2013 in many areas of the western Corn Belt, along with the high volatility in grain prices, it may be best to wait until closer to the June 3 deadline to finalize the ACRE decision for 2013.
The USDA FSA also announced that all dairy producers with Milk Income Loss Program (MILC) contracts will automatically have those contracts extended until to Sept. 30, 2013. Producers already in the MILC program will not need to re-enroll in the program at local FSA offices; however, they will need a new adjusted gross income (AGI) form at FSA offices before they can receive any MILC payments after Oct. 1, 2012. MILC payments will be made retroactive back to September 2012. USDA will be issuing payments for September and October 2012. The payment rate for milk marketed in September is 59¢/hundredweight, 2¢/hundredweight for October, and zero for November 2012. MILC payments occur anytime the adjusted Boston Class I milk price drops below $16.94/hundredweight.
For more details on the DCP program sign-up, payment rates and dates, ACRE program details or the MILC program, producers should contact their local FSA office.
Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at [email protected]innstarbank.com.