Recently USDA’s Farm Service Agency (FSA) released the enrollment data for the commodity programs under the 2014 Farm Bill. FarmdocDaily recently delved into the enrollment data on a national level (Schnitkey et al., 2015). Nationally, the Agricultural Risk Coverage – County Option (ARC-CO) was the overwhelming pick by farmers for the 2014 Farm Bill (Schnitkey, 2015) . ARC-CO was elected on 76 percent of the program acres, followed by the Price Loss Coverage (PLC) program on 23 percent of the program acres, and the Agricultural Risk Coverage – Individual Option (ARC-IC) on less than 1 percent of the program acres (Schnitkey, 2015). This got me curious as to how Maryland and Delaware producers elected to cover their base acres.
Program Choices in the Two States
Maryland producers overwhelmingly elected ARC-CO for corn (94.4 percent), soybeans (96.1 percent), grain sorghum (87 percent), and sunflowers (83.3 percent) base acres (Figure 1). PLC was selected by a majority of Maryland producers with base acres in barley (79.8 percent) and wheat (51.3 percent). Maryland producers with oat base acres almost evenly split oat base acres between ARC-CO (54.2 percent) and PLC (45.8 percent). Around .1 percent of total base acres in Maryland elected the ARC-IC.
Delaware producers overwhelmingly elected the ARC-CO program for soybean (97.3 percent), corn (96.4 percent), grain sorghum (86.6 percent), sunflowers (71.2 percent), and oats (66.5 percent) of base acres (Figure 2). PLC was the overwhelming pick for Delaware producers with base acres in barley (63.1 percent) and wheat (63 percent) (Figure 2). Again ARC-IC barely registered in Delaware as it did in Maryland and nationally.
Similar to what was seen nationally by farmdoc Daily, Maryland and Delaware producers did not split protection between ARC-CO and PLC. Instead of splitting between revenue protection and a target price program, the majority of Maryland and Delaware producers elected to go with revenue protection. We can probably also guess that a majority of producers in the two states did not put much value in the Supplemental Cover Option (SCO) since SCO eligibility was based on PLC participation. Maryland oat producers potentially did attempt to split protection between the two programs, unlike the majority of other producers in the region.
Base Acre Reallocation
The FSA data also included changes in base acres from 2013 (the last year for the 2008 farm bill programs) and 2014 (the first year for the 2014 farm bill programs). The 2014 farm bill included a one-time opportunity to keep existing base acres or reallocate base acres based on current farming practices. The 2014 farm bill did not include an opportunity to increase total base acres, just reallocate.
Figure 3 highlights the changes Maryland producers made in base acres among commodities. Maryland producers choose to reallocate base acres to corn (an increase of 5.27 percent), soybeans (increase of 1.99 percent), and sunflowers (increase of 20.24 percent). Maryland producers reallocated these base acres from wheat (decrease of 5.64 percent), barley (decrease of 10.74 percent), grain sorghum (decrease of 25.67 percent), and oats (decrease of 35.2 percent).
Maryland producers potentially saw base acres enrolled in corn and soybeans paying off in larger amounts over the life of this farm bill. The other reason for this shift could be to align base acres on the farm with a true picture of what Maryland producers are actually producing. Previous farm bills had not offered an opportunity to reallocate base acres and producers may have taken advantage this time around to align base acres with actually production.
Figure 4 highlights the changes Delaware producers made in base acre reallocation. Delaware producers increased corn base acres by 5.27 percent. The remaining commodities all lost base acres, including soybeans. Again this could be seen as Delaware producers taking the opportunity to reallocate base acres to mirror production on the farm.
Maryland and Delaware producers overwhelming picked the ARC-CO program for a majority of eligible commodities, and both states moved base acres from other commodities into corn base acres. Currently, producers are encouraged to remember that FSA has begun signup for the 2014 and 2015 crop years till Sept. 30, 2015. To be eligible for any payments, eligible producers will need to make an appointment with their local FSA office to complete the paperwork.
Producers will also need to remember that starting with the 2016 crop year through the 2018 crop year, producers will need to sign up annually for the program selected each year from Dec. 1 to Aug. 1. For the 2016 crop year, which starts on Oct. 1, 2015, producers would need to sign up with their local FSA office from Dec. 1, 2015 to Aug. 1, 2016.
If you have other questions on the 2014 Farm Bill and the new farm programs, check out the Department of Agricultural and Resource Economics' Crop Insurance page.
Schnitkey, G., J. Coppess, N. Paulson, and C. Zulauf. "Perspectives on Commodity Program Choices under the 2014 Farm Bill." farmdoc Daily (5):111, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 16, 2015.
U.S. Department of Agriculture—Farm Service Agency. ARC/PLC Program Data. Washington DC. Internet site: http://www.fsa.usda.gov/programs-and-services/arcplc_program/index (Accessed June 29, 2015).