Everyone in agriculture is facing a new Farm Bill, with the upcoming new-crop season. But the 2002 Farm Bill effects much more than crops. Still, there's no need to think you have to know all the ins and outs of the legislation, says Allan Gray, a Purdue University agricultural economist.
Rather, it's important to know where to go for information and who you can turn to. Naturally, land grant universities are one option– several have Web sites dedicated to the issue. Naturally, Gray points to the Purdue University Department of Agricultural Economics' page at http://www.agecon.purdue.edu/ But a web search will uncover a host of others. USDA also has a dedicated site– the Farm Bill Page at http://www.usda.gov/farmbill/index.html
Of course local and state government offices can help as can a variety of independent consultants.
If you plant crops, one of the early things you need to know is the government loan rate for qualified crops and the approaching deadline for updating base acres and program yields through USDA's Farm Service Agency, says Gray.
Farmers should carefully consider loan rates and market prices as they decide which crops to plant, he adds.
"When we factor net revenues from planting corn versus planting soybeans, we want to make sure we're using the higher of either the loan rate for our county or the market price," says Gray. "It's anticipated soybeans are likely to be below their loan rate for the 2003 crop. Nationally, that's $5 per bushel. With corn, the national loan rate is $1.98 a bushel, but we're anticipating prices to be higher than the loan rate."
Counter-cyclical payments provide additional support by making up the difference between a crop's market price per bushel and a government-set target price. Farmers should not focus on CCPs when making planting decisions, although the support payment does provide additional protection when markets are volatile, notes Gray.
Farmers intending to participate in federal farm programs have until April 1 to select base acre and yield options at local FSA offices. The five options range from leaving base acres and yields unchanged to updating both. Each option affects a producer's support payment level.
Producers who miss the signup deadline automatically will be assigned Option No. 2, which adds soybean base acres to current base acreage. Soybeans are a full-program crop in the 2002 Farm Bill.
Some farmers might benefit more from Option No. 4 - updating base acres using 1998-2001 historical planted acres and updating yields for CCPs, says Gray. He developed a Farm Bill spreadsheet calculator to help determine which option might be best for an individual. Go to http://www.ces.purdue.edu/farmbill/ and click on "Related Web Sites."