Associate Professor/Crop Markets Specialist The 2014 Farm Bill Ames, Iowa May 31, 2014 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911 1 1

Farm Bill Titles Commodities IX. Energy Conservation X. Hort. & Organic Ag. Trade XI. Livestock Nutrition XII. Crop Insurance Credit XIII. Commodity Futures Rural Development XIV. Miscellaneous Research XV. Trade & Taxes Forestry

Farm Bill Projected Spending 2014-2018 $489 Billion

Old vs. New Direct Payments (DP) Countercyclical Payments (CCP) Marketing Loans (LDP) Revenue Countercyclical Payments (ACRE) Countercyclical Payments (PLC) Marketing Loans (LDP) Revenue Countercyclical Payments (ARC) New programs, but they have strong similarities to previous programs

Marketing Loans Loan Rates Set by law Corn $1.95 Wheat $2.94 Soybean $5.00 Sorghum $1.95 Barley $1.95 Oats $1.39

PLC instead of CCP Price-based support program Reference prices establish targets Works like CCP Payment rate = Max(0, Reference price – Max(MYA price, Loan rate)) Payment = Payment rate * Payment yield * Payment acres

PLC vs. CCP and DP

ARC instead of ACRE Revenue-based support program Revenues based on 5-year Olympic average yields and prices Yields and prices have cups (County T-yields and reference prices) Triggers at county or individual farm level, instead of state level

ARC-County

Producer Choice

Thank you for your time. Any questions. My web site: http://www. econ Thank you for your time! Any questions? My web site: http://www.econ.iastate.edu/~chart/ Iowa Farm Outlook: http://www.econ.iastate.edu/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/