County yield info update, Feb. 24: Big differences between counties complicate decisions between ARC and PLC
Sometimes a picture’s worth a thousand words. With complicated decisions like the new farm program under the 2014 Farm Bill, that may be doubly true.
Some of the choices are made by landowners, and some by growers who farm the land. Many growers who rent land will help landlords through the process, explaining what works best for their business.
To help inform your deliberations we’ve put together a presentation, 2014 Farm Bill Program Choices. It includes farmers’ choices from our recent survey of growers about their plans, as well as county level maps detailing results from our exclusive analysis of key alternatives.
Three decisions must be made. For each farm program yields can be updated, and acreage bases can be retained or reallocated to reflect recent planting choices. Finally, a farm program must be selected for every affected crop.
Most corn and soybean growers are expected to choose between Price Loss Coverage and Agriculture Risk Coverage at the county level.
When making your selections, one consideration is what you want from the program. It can be used create a safety net to guard against low prices, or as a potential revenue source.
Growers who want to maximize the risk management features of the program can retain or reallocate bases depending on which will match their plans for the life of the program, which runs through the 2018 crop year. Price Loss Cover offers more downside protection against very low prices, another risk management tool.
Farmers who want to maximize potential revenue from the program can select the acreage base and programs that may pay the most. One method is simply to look at payments expected for 2014 crops, which is is already fairly easy to predict. We call this the bird in the hand selection.
The other method is to pick the alternatives that may bring the most revenue over the life of the program. This requires making an assumption about what prices will do, so we call it the two in the bush approach.
Our county level maps show how all these choices might turn out, based on different outlooks. Every farm’s decisions will be different, especially for PLC, which is based on individual farm yields. The maps provide an overview, as you get started with the process.
You can download the complete set of maps using the download link below.