The deadline is February 27 for landowners to visit the local Farm Service Agency office to update their yield and base acre information for USDA farm program purposes. The Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, established by the 2014 Farm Bill, are the two main commodity crop programs offering farmers a financial safety net for 2014 through 2018, the 5-year life of the new farm bill.
The farm bill provides landowners with the option of updating their farm program payment yields and reallocating base acres. This is the first time farmers have been allowed to update since 2002, notes Steve Johnson, Iowa State University Extension farm management specialist.
Farmers can use crop insurance data from USDA's Risk Management Agency, he says, to get certified yields for their farms to better calculate how the new farm financial safety net programs (ARC and PLC) can offer the best protection against low crop prices. You can check with your local FSA county office to see if the data is available for you. This data belongs to the producer, and only the producer associated with crop insurance records will be provided this service.
Good reason to visit FSA today, get this done
"If you haven't already, you need to make an appointment today with your local FSA office and schedule a visit," says Kevin McClure, chief farm program specialist with the Iowa FSA state office in Des Moines. "In January some landowners were starting to visit our county offices to record their base acres and make their yield update decisions, but there weren't as many people coming in as we would have liked to see."
If you wait until close to the February 27 deadline and find yourself standing in long lines at the FSA office, you'll wish you had gotten this done earlier. "At this point, there's no indication FSA will extend the deadline," says McClure. "Now is the time to visit your FSA office and make your decisions."
You'll have to make two decisions at FSA office
When you go to the FSA office you'll have to decide on two choices:
1) Keep or reallocate the base acres of commodity program crops.
2) Keep your old Counter-Cyclical (CC) payment yields or update them with yields from 2008 through 2012 crop years.
There's some confusion among farmers about who signs which FSA forms and when for the ARC and PLC programs. "If you choose to update yield and reallocate base acres, that's form CCC 858 and a current landowner must sign it," says McClure.
Here's how to update your FSA yield information
Go to the FSA office with your yield information, bushels per acre by farm number for years 2008 through 2012. Do you want to keep your old Counter-Cyclical yield or update the yield? You are allowed to certify the yield on that farm for 2008 through 2012 each year the crop was planted. The simple average of the yields is then taken times 90%, says McClure. The new yield becomes the PLC yield.
Producers and landowners received a letter from FSA last August. It has your old base and the planting history from 2008 through 2012 for each FSA farm number as well as your CC yields. Owners requesting to update their CC yields are certifying they have evidence for the yields. Nearly all producers are using crop insurance records. "If you put your yields together by FSA farm number before you go to the FSA office, it will save you time once you get there," says McClure.
Deciding whether or not to reallocate base acres
When visiting FSA you can view your base acres for each farm as of September 2013, along with the reallocated base acres and then make a decision about whether to reallocate. Remember, yield update and base acre forms must be signed by February 27.
To help you make base acre decisions, he says you can plug your old base and recent planting history into USDA's online calculator before going to the FSA office. You can find the calculator at www.fsa.usda.gov. Under popular topics, click on Agricultural Risk Coverage/Price Loss Coverage. Base and yield tools are on the upper right side of that page.
McClure says you can review your acreage history for various farms in the letter FSA sent you last August. Plug that information into the FSA spreadsheets provided on the ARC/PLC website. He recently helped a farmer do this. They reviewed the acreage history for about 20 FSA farm numbers that the farmer received in the FSA letter last summer. They then plugged the information into the FSA spreadsheets online and the farmer made his decision in about 15 minutes.
If you can create more corn base, then reallocate
Choosing to reallocate your base acres basically boils down to deciding whether the old or new acres have more corn base, he notes. If you can create more corn base, then go ahead and reallocate. Corn base is more likely to receive payments than soybeans—in either the ARC or the PLC program.
Updating yields benefits you only if you elect to go into the PLC program. ARC-County doesn't use PLC yields. However, ISU farm management specialist Steve Johnson and many others who've run the numbers on this are advising that you should go ahead and update if the 2008-2012 yields are higher. "This opportunity to update yields doesn't come along often," says Johnson. "The last time FSA gave you the chance to do this was in 2002. I recommend you take advantage of this opportunity."
Who signs the form when making ARC/PLC election?
Producers use a different form for the ARC/PLC farm program election. The current producer or producers on the farm sign this form CCC-857. Current producers include current tenants and landowners who will share in crops grown on the farm, says McClure. If there's been a tenant change from 2014 to 2015, the current tenant refers to the tenant who will be farming the land in 2015. This form must be signed by March 31.
"Thus, current landowners sign the yield update and reallocation forms," he notes. "Current producers, meaning 2015 tenants and 2015 landowners who will share in the crops, sign the actual election form where you choose ARC-County and ARC-Individual or PLC. If it's a cash-rent farm, then only the 2015 tenant signs the program election form. However, if it's a 50-50 share lease and the landowner will have interest in the crop, tenant and landowner would both be required to sign."
Annual FSA farm program sign-up and payment
After the base reallocation, yield update and program election process is completed this year, FSA will have an annual enrollment for each year of the farm program through 2018, says McClure. That annual enrollment is when it's determined who will be eligible for a potential payment that year.
For 2014 and 2015 crop years, ARC/PLC enrollment will be done simultaneously beginning in spring 2015. This part will be similar to past determinations in previous programs. Who gets the USDA payment (when there is one) will depend on how the farm owner and tenant agree to farm the farm, and who has an interest in the crops for that year, McClure explains.
Who will receive FSA farm program payment?
In a cash lease agreement where the tenant gets 100% of the crops in return for a rental payment, the tenant will also get 100% of the USDA payment, says McClure. In a 50-50 crop share lease, the USDA program payments will be split on a 50-50 basis between landowner and tenant. If it's some other type of share agreement, the payments will be split based on how the share percentages are set up in the lease for the farm for that year.
If the 2014 tenant is different than the 2015 tenant, the 2014 tenant will sign up for 2014. The new tenant (and landowner if it's a crop share lease) will sign up for 2015.
ISU Extension has updated helpful online tools
"We have revamped and simplified our Farm Bill Analyzer and created a new Farm Bill Calculator to help producers make these USDA farm program decisions," says Alejandro Plastina, an ISU Extension ag economist. He provides these links for you to find and use several helpful farm bill decision tools and for the USDA/RMA crop insurance decision tool.
• Farm Bill Tools:
• RMA Crop Insurance Decision Tool
For farm management information and analysis visit ISU's Ag Decision Maker site www.extension.iastate.edu/agdm; ISU Extension farm management specialist Steve Johnson's site is at www.extension.iastate.edu/polk/farm-management.