click play for farm podcast
FARRM ACT of 2014
Federal Agricultural Reform & Risk Management Act
Before I get into this a few updates.
1. I have a really good podcast on how 2014 could be 1914 all over again, but Farm Bill will be bigger news and I do not want that one to get “buried” in the news.
2. Economics may over take the farm bill story anyway
a. Argentine Peso devaluation
b. Stock Market looks like it is in trouble.
c. Emerging markets and their currencies are in trouble.
d. Ukraine – looks like in the end it is all chaos
Two of the four above are major competitors with U S agricultural producers.
So on to the Farm Bill
I will post show notes tonight and do the podcast tomorrow afternoon after I feel more comfortable with what I know. Take everything I say until the Farm Bill is official as preliminary analysis.
covers years 2014 to 2018
Crop Insurance no major changes, they say they have strengthened it. Conservation compliance is now part of crop insurance.
Dairy – Gross margin insurance program with no supply side controls.
No Direct Payments, but cotton gets a “transition” payment for 2014. After 18 years gone.
Separate STAX insurance program for cotton.
Permanent Livestock disaster program
$8 billion in food stamp cuts, mainly by cutting the gaming of using heating assistance to get more food stamps.
Several choices for crop producers on assistance. Need to make one choice for all 4 years.
1. ARC – “shallow loss” program Corn Growers backed program – current olympic corn price about $5.20
5 year olympic average ( throw out high and low average the 3 left) of price, covers loss between 86% and 76% of loss, limited to 10% total, based on base acres, county option 85% of loss, individual farm limited to 65% of loss or could be instead of loss limited to base acres of 65 and 85%
2. PLC program – “target price” program proposed corn target $3.70, but much better targets for commodities such as rice. I think also based on base acres.
2A. SCO – supplemental coverage option – available only starting in 2015 add on for PLC to make it more like ARC I think above 85 and 65 for county or individual farm applies.
Payment limit for above programs is $125,000 per person / $250,000 per couple.
CRP – capped at 24 million acres includes Grassland reserve acres – small cut in overall acres
CSP – Harkin’s baby, capped at 10.3 million acres about 15 to 20% cut from where we are now.
SUGAR – big winner no changes same as now
COOL – looks like most mainstream livestock and meat groups not happy
Seen figures of up to $40 billion in savings, most analysis of this counts cuts as $24 billion including $8 billion in food stamps.