Farm Bill: Domestic Policy Outlook Joe L. Outlaw Regents Fellow Professor & Extension Economist Co-Director, AFPC 2018 Southern Outlook Conference Atlanta, GA September 24, 2018

Presentation Outline A Few Observations About the Current Farm Bill MFP Seed Cotton Outlook FAPRI Net Income Update Conclusions Farm Bill

A Few Observations About The Current Farm Bill Baseline Farm Bills are no Fun – for anybody Getting Seed Cotton in the Bipartisan Budget Act was Way Bigger Than Leadership Gets Credit For Can’t imagine trying to get cotton back in Title I in the current D.C. climate Instead of spending cuts across commodities at least we are flat to flat + We All Need to Let the Process Play Out Before Declaring a Certain Commodity Isn’t Getting Anything There are still some beneficial provisions in play Think about yield exclusion in the 2014 FB …. Didn’t score much…. Not much talk in the press but… HUGE in terms of a producer’s safety net

Sometimes Doing the Right Thing is Hard Source: Jim Wiesemeyer

Key Seed Cotton Takeaways You will have to: Allocate generic base acres to cotton or other crops Evaluate your opportunity to update your seed cotton payment yield Choose between ARC or PLC for safety net coverage SIGN UP If You Need Any Help With Decision Aid https://www.afpc.tamu.edu/tools/cotton-base Call AFPC at (979) 845-5913 or toll free at (888) 890-5663

3 Situations Producers Are In Decision Focuses on the 2009 to 2012 Plantings Your 2009-12 Average Plantings were either: Greater than or equal to generic base acres Option 1 will give you all your generic acres in seed cotton Option 2 depends on the overall base on the farm Less than but close to generic base acres Option 1 will give you at least 80% of generic and maybe more but not 100% Option 2 will allow you to have quite a bit of seed cotton but add to other bases Very small relative to generic base acres Option 1 will provide up to 80% of generic in seed cotton Option 2 will largely reallocate generic to other crops

What Option 2 Won’t Allow You to Do? Can’t just put all your bases in the crops you want – determined by the percentage of acres planted to covered crops from 2009- 12 Can’t end up with more base on farm than you started with Where we are – cotton projected payments are higher than almost all other crops so… does a producer take fewer base acres to get higher potential payments?

Conclusions I am not going to say that all farmers are broke and we are headed for a 1980s type crash What I think is true is that for the 300,000 to 400,000 real farmers in the U.S., the likelihood of failure is equal to the likelihood of staying in business – some just don’t realize it Across the country the record yields experienced over the last few years temporarily changed the outlook and put off a disaster—for now Getting a farm bill can help but more about lenders than producers

Thanks!!! Joe Outlaw joutlaw@tamu.edu 979-845-5913 www.afpc.tamu.edu