1. Extension and Outreach/Department of Economics 2014 Farm Bill: Overview ABA National Agricultural Bankers Conference Omaha, Nebraska Nov. 10, 2014 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911

2. Extension and Outreach/Department of Economics Farm Bill Titles I. CommoditiesIX. Energy II. ConservationX. Hort. & Organic Ag. III. TradeXI. Livestock IV. NutritionXII. Crop Insurance V. CreditXIII. Commodity Futures VI. Rural DevelopmentXIV. Miscellaneous VII. ResearchXV. Trade & Taxes VIII. Forestry

3. Extension and Outreach/Department of Economics Farm Bill Projected Spending Projected Spending 2014-2018 $489 Billion

4. Extension and Outreach/Department of Economics 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

5. Extension and Outreach/Department of Economics What Stayed the Same? Loan Rates  Set by law  Corn$1.95  Wheat$2.94  Soybean$5.00  Sorghum$1.95  Barley$1.95  Oats$1.39

6. Extension and Outreach/Department of Economics Livestock  Livestock Indemnity Program (LIP) Compensates for mortality loss  Livestock Forage Disaster Program (LFP) Compensates for grazing losses due to drought or fire  Emergency Assistance for Livestock, Honeybees, and Farm-Raised Catfish (ELAP) Compensates for disaster losses not covered elsewhere

7. Extension and Outreach/Department of Economics Dairy Source: futurefordairy.com

8. Extension and Outreach/Department of Economics Conservation  Conservation Reserve Program →27.5 million acres in 2014 →26 million acres in 2015 →25 million acres in 2016 →24 million acres in 2017 and 2018 →Grassland enrollment capped at 2 million acres  Links conservation compliance to crop insurance premium subsidies

9. Extension and Outreach/Department of Economics Commodity Program Decisions Decisions for each FSA farm: 1.Programs yields (current or updated) 2.Base acres (retained or reallocated) 3.For each FSA farm/crop, which program will be used to make payments: –Price Loss Coverage (PLC) –Agriculture Risk Coverage – County level (ARC – County) –Agriculture Risk Coverage – Individual level (ARC – Individual ) * ARC-Individual applies to all crops and all farms in a state * SCO not available with ARC Timeframe: Decisions 1 and 2: Now to February 28 Decision 3: November 17 to March 31

10. Extension and Outreach/Department of Economics Base Acres  Keep current base acres or do a one-time “reallocation” of base acres  Reallocation allowed to covered commodities planted between 2009 and 2012  Reallocation in proportion to the ratio of 4-yr average plantings/prevented plantings  Total number of base acres limited to total of existing base acres

11. Extension and Outreach/Department of Economics Payment Yields  Keep current CCP payment yield or do a one-time “update” of payment yield on a commodity-by-commodity basis  Update: 90% of 2008-2012 yield per planted acre on the farm  If the farm yield is below 75% of the 2008- 2012 average county yield, then the farm yield is replaced by 75% of the 2008-2012 average county yield

12. Extension and Outreach/Department of Economics Online Farm Bill Analysis fsa.usapas.comusda.afpc.tamu.edu

13. Extension and Outreach/Department of Economics Thank you for your time! 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/