Paul Neiffer: New Farm Bill Details

June 15, 2015 12:00 PM
Paul Neiffer: New Farm Bill Details

Farm bill program elections are over for producers, but new developments continue to emerge as the agriculture industry and policymakers adapt to the new legislation.

Power Hour Noon Logo“Key things I’ve seen on dealing with probably hundreds or thousands of farmers over the last year on the farm bill are most of the farmers I’ve seen have leaned toward ARC-County,” explains Top Producer columnist Paul Neiffer, a CPA and partner with CliftonLarsonAllen. “Some have gone the PLC route, but really for especially those growers in what I call the northern Corn Belt, they’re looking at a maximum payment this year [for] the ’14 crop that was harvested last year.

“We’re almost coming up to the end of the marketing year,” he continues. “Unless prices really rally, they’re looking at a full payment. For a lot of these farmers, it’s $70 to $80 per acre. That’s the difference between losing some money and making some money.”

As for the 2015 crop, many producers should expect another maximum payment.

“The [Congressional Budget Office] was estimating that farmers were going to elect PLC on 65% to 75% of their acres,” Neiffer explains. “I think it’s going to be the complete opposite. Hopefully, we’ll get those details here fairly soon so we’ll have an idea of what it is.”

Save Through Restructuring. One area where some producers can find opportunity within the farm bill programs is entity restructuring, he says. Otherwise, they risk leaving payments on the table.

“A lot of farmers really haven’t brought their spouse in,” Neiffer points out. “It doesn’t mean he or she is the farmer. It just means if they go down to the local FSA office and get that spouse signed up, they automatically get an extra $125,000 payment . Maybe they were at $175,000 and they could only keep $50,000. Well if they bring their spouse in, now they’re at $250,000. They’re well under the payment limit, so they’re going to get the whole payment.”

Policy Change Rumors. Because commodity prices are lower now than when the farm bill won approval a year ago, it’s likely the government will end up spending more money on programs than anticipated.

“There’s going to be some battles in Congress about should we need to tweak that before the farm bill is up?” Neiffer says. “I don’t know how that’s going to happen. Definitely on the crop insurance side, there’s going to be some discussion. Do we need to reduce or eliminate those subsidies for farmers making a certain amount of money? That didn’t happen in this farm bill, I don’t think it probably really will happen.”

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Spell Check

cokato, MN
6/16/2015 07:08 AM

  i agree lets get out of govt farming but the strings should be cut to all involved. i am talking to biggest user of the farm bill also. any one that knows the farm bill will know what i mean by that statement. every thing should change from govt to health care to the taxation system, the world is not in reality, entitlements b.s what happened to earning it.

Canton, MN
6/15/2015 09:50 PM

  Wow get a extra $125,000 ! Gives a new meaning to welfare doesn't it. Just get your spouse to sign up. It doesn't matter if they farm do it or you will leave welfare money on the table ! I'm glad I don't take any I couldn't look my self in the mirror .

Buckingham, IL
6/19/2015 05:34 PM

  There we go. Farmers cry that Obama has not helped them . Another big handout. Cry sommore farmers that the Blacks and Mexicans are getting all the subsidies. Plus they are getting some more tax extensions. Get some new Chevy trucks,Florida vacations. Plus a new gator. Sad!!!A51FD5


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