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.
“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.”