A few weeks ago, farm operators and land owners should have received information from the Farm Service Agency (FSA) regarding base acre reallocation and updating FSA payment yields. This FSA information letter and data will likely be the first of many official FSA notices regarding details on the farm program choices with the new USDA farm program that is being implemented for the 2014-2018 crop years. It is very important for farm operators and land owners to place close attention to the details and information in all current and future FSA notices regarding the new farm program choices.
The initial information letter from FSA contained data on existing crop base acres on each FSA farm unit, as well as the listed planted acreage for each crop from 2009-2012. This letter also contained the existing counter-cyclical (CC) payment yields for each crop on every FSA farm unit. There have been several reports of the data on some FSA units not being accurate, due to changes in FSA farm units that occurred in the past five years. It is very important for farm operators and land owners to review this data, and to report any data that is not accurate the local FSA offices by September 26. This data will be used in the coming weeks for decisions on base acre reallocation and updating FSA payment yields on each FSA farm unit.
Land owners will be given a one-time opportunity to update crop base acres on each FSA farm unit, based on the average planted crop acres from 2009-2012, or they can choose to continue with the crop base acres that existed under the last Farm Bill. The total reallocated crop base acres for 2014-18 cannot exceed the total crop base acres that existed in 2013 farm program. Many farm operators planted more corn from 2009-2012, so there may be an opportunity to increase corn base acres on some FSA farm units. All farm program payments for both the new Ag Risk Coverage (ARC) and the Price Loss Coverage (PLC) programs will be calculated on crop base acres, rather than on year-to-year planted crop acres. Any changes in crop base acres will not affect future crop planting decisions.
Farm operators and land owners will also be given the opportunity to update the FSA payment yields for each eligible crop on a FSA farm unit. The choice will be to either keep the existing counter-cyclical (CC) payment yields on a farm unit from the previous farm program, or to update the FSA payment yields. Updated yields will be 90% (.90) of the 5-year (2008-2012) average crop yields for each eligible crop on a farm unit. The FSA has not yet announced what type of documentation will be required to verify crop yields from 2008 to 2012 on a farm unit; however, verification is likely to be similar to past farm programs.
FSA farm units that are enrolled in the new PLC program will utilize either the existing CC yields on a FSA farm unit, or the updated FSA payment yields. Even if a farm unit is not likely to be enrolled in the PLC program, it is still advisable to update FSA yields for crops on farm units, where there is advantage to doing so. The last time that there was an opportunity to update FSA payment (CC) yields was in 2002. Yields that were not updated at that time go back to the 1980s, and today’s average yields for most crops in many areas of the U.S. are much higher than those levels.
Once a land owner has made their decisions for base acre reallocation and updating program yields, as well as the farm program choice, those decisions will continue on through 2018, regardless if the land is rented to another farm operator in future years, or if the land is sold in the next few years. These decisions could have an impact on potential future farm program payments for a FSA farm unit, which could potentially affect future land rental rates and farmland values.
Actual farm program sign-up will take place at local Farm Service Agency (FSA) offices, and will likely be separated into two parts. The first sign-up period will likely start in the coming weeks and will continue into the Fall, which will be for the purpose of reallocating crop base acres, and for potentially updating farm program payment yields. The second sign-up period at local FSA offices will be to make the actual farm program choice for each eligible crop on a FSA farm unit. This sign-up period will likely start in late fall this year, and continue into early 2015. In the coming weeks and months, farm operators and land owners will need to pay close attention to the official FSA notices regarding the farm program choices. They will also need to take the time to study and evaluate the various farm program options and alternatives that will be available for the 2014-2018 crop years.
MN Soybean Farm Program Decision Webinar
The Minnesota Soybean Research and Promotion Council, in cooperation with the MN Soybean Growers Assn., the MN Corn Growers Assn. and the Assn. of MN Wheat Growers, have been hosting a series of free “Farm Program Decision Webinars” for producers and land owners. The next Webinar is on Thursday, September 11, from 7:30-9 p.m. This webinar will have a special focus on Farm Program Basics for Land Owners and Farm Managers.
The past Webinars can be viewed by accessing the MN Soybean website. Presenters for all the webinars will be Al Kluis, Grain Marketing Analyst, Kent Thiesse, Farm Management Analyst, and the State FSA Staff. Any interested person in viewing the previous Webinars, or in signing up for the Farm Program Webinar on September 11, should go the Minnesota Soybean website.