MSU Extension offers summary of Farm Bill decisions for Montana farmers

BOZEMAN – Farmers in Montana finished selecting Agriculture Act of 2014 safety net options in April. Now the Farm Service Agency (FSA) has provided a summary of landowner and operator farm bill decisions on Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) at http://www.fsa.usda.gov/arc-plc.

Of the 21 covered commodities listed in the Agriculture Act of 2014, or Farm Bill, 16 have base acreage in Montana. Base acreage is a measure of acres planted historically to a certain crop and is part of FSA records. Farmers had the option to update payment yields and reallocate base acreage among program crops. The list of these crops appears in the following table, which shows the percent of each crop base that elected a given farm program.

“MSU Extension partnered with FSA and the Risk Management Agency (RMA) to give over 100 webinars and workshops around the state. Some producers attended multiple trainings–in many cases the decision of which program to elect was not easy and some of the rules and intricacies of the programs are complex,” said Kate Binzen Fuller, Montana State University Extension specialist in the Department of Agriculture Economics and Economics.

Overall, 74 percent of Montana base acres elected PLC, in which a payment is triggered if prices fall below a given reference price. According to Fuller, PLC may have been a more popular choice for Montana farms because of projected price declines for several program crops, which would trigger PLC payments.

A relatively small percentage (eight percent) of Montana base acreage was put into ARC-IC, despite early interest in the program (ARC-County, or ARC-CO, uses county average yields, while ARC-Individual, or ARC-IC, uses individual farm yields). Nationwide, most election percentages were quite different than in Montana; 23 percent of base acreage was put into PLC, and 76 percent into ARC-CO, with only one percent of base acreage put into ARC-IC. ARC payments are triggered by a combination of price and yield information relative to historical averages.

“Comparing signup rates nationwide with Montana is a challenging task because of the diversity of crops grown and production experience. A review of wheat signup shows a substantial difference: 43 percent of wheat base acres in the U.S. were enrolled in PLC, while over 73 percent of wheat base acres were enrolled in PLC in Montana,” said George Haynes, MSU Extension agricultural policy specialist and professor in the Department of Agriculture Economics and Economics. “Decision aids delivered by MSU Extension and others helped producers assess the production experience in their county and determine which farm programs to choose.”

Approximately 9.3 million base acres in Montana, and 242.4 million acres across the U.S. were put into ARC or PLC in this farm bill. Approximately 47,000 farms in Montana and 1.8 million U.S. farms elected an ARC or PLC program. In the U.S. as a whole, nearly 59,000 more eligible farms and approximately 2.5 million more base acres were enrolled than previous farm bill programs. 

The largest changes in base acreage nationwide were in wheat, which lost over 9.8 million acres, and corn, which gained nearly 13 million acres. Montana saw a decline in enrolled base of nearly 85,000 acres, and approximately 4,000 fewer farms signed up for a farm bill program. The largest decline in Montana base acres by far was in barley; however, large increases in base acres in pulse crops such as peas and lentils, along with wheat, made up some of the difference.

If you have questions about these programs in Montana, contact your local Extension agent or e-mail Kate Binzen Fuller at kate.fuller@montana.edu.