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Northwest Iowa Dairy Outlooks

A local discussion of current science and issues concerning dairying in northwest iowa

The President signed the farm bill into law on Friday, February 7 in Michigan.

Even though there is a lot of excitement about the bill being passed, it will take several months for USDA-FSA to interpret the changes in the new bill and be ready to implement it for producers.  Extension Specialist Joe Outlaw notes, producers should be cautioned that what they have read or have been told is in the farm bill is subject to change until the regulations for each of the programs is published.

If past experience is a guide, sign-up would not occur until summer at the earliest but there are significant changes to the commodity programs that provide the safety net to row crop producers that producers will need to become familiar with.

Direct payments that have provided the bulk of the producer safety net have been eliminated.  Producers will have to make a choice between a new agriculture risk coverage (ARC) program that protects producers against income losses relative their recent income experience and price loss coverage (PLC) that provides income protection against deep price declines.

Producers will also have the opportunity to update their base acres allowing them to obtain protection on crops they currently grow rather than what they grew during the 1980s.

These two decisions will have to be made for the 2014 crop and will not be changeable for the life of the farm bill.  They are also quite complicated but Extension Economists with Texas A&M AgriLife Extension Service are working educational materials and a tool to assist producers with these decisions.

Cotton producers will no longer participate in commodity programs other than the marketing loan program that protects against very low prices.  The primary government safety net for cotton producers will be from a new cotton only insurance program referred to as stacked income protection plan (STAX).  STAX will not be available until the 2015 crop year at the earliest so the bill provides cotton producers a transition payment that is similar to the direct payment in previous farm bills.

Dairy producers will have the opportunity to purchase a milk over feed costs margin insurance program to protect them from low milk prices, high feed costs or some combination.  Again, a decision aid is being developed to educate producers about their insurance choices.

A new area-wide insurance program will be available to all producers to purchase beginning in 2015 that is designed to protect them against losses that would normally fall within their insurance deductible range.

Prior to sign-up with FSA, Texas A&M AgriLife Extension will conduct educational meetings across the state in cooperation with Texas FSA.




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