(Posted Thu. Aug 14th, 2014)
One week from today, farmers and landowners are invited to attend a free DTN webinar, co-sponsored by the National Corn Growers Association, that will help them choose the right farm bill risk coverage package in the months ahead.
“It’s very important for farmers to understand the ramifications of one-time program decisions that will affect their farms for years to come,” said Jim Reed, an Illinois corn grower and chair of NCGA’s Public Policy Action Team. “We’re proud of NCGA’s work on federal legislation with a program like Ag Risk Coverage to provide a smart and cost-efficient, market-based approach to managing risk.”
Later this winter, farmers will make a one-time choice of which farm program safety net they favor when prices and/or yields hit adversity. Price Loss Coverage is a price-only program very similar to past counter-cyclical programs, only with higher reference prices than in the past. ARC benchmarks revenue and pays when there is a shortfall. It has features that resemble GRIP insurance policies, based on county yields or individual yields.
If farmers don’t sign up for a program for their 2014-2018 crops, PLC becomes the default, and that could mean corn growers sacrificing $77/acre to $45/acre on 2014 ARC payments in some Midwest counties. At the moment, 2014 wheat, corn and soybeans aren't likely low enough to trigger payments under PLC.
"When congressional authors passed the farm bill last winter, they didn't contemplate as dramatic a drop in commodity prices as we've experienced," Jerry Lehnertz, vice president of lending for AgriBank says, referring to the 30% crash in average cash corn in the last 90 days. "But that's the exact situation where new programs like Agriculture Risk Coverage come into play."
DTN’s webinar, hosted by Executive Editor Marcia Taylor, will include presentations from economists Carl Zulauf of Ohio State University and Gary Schnitkey of the University of Illinois, who will help growers analyze options and prepare landowners for critical one-time decisions. It takes place from 9 to 10 a.m. CDT, Thursday, Aug. 21. Click here to register.
Participants are encouraged to email questions to Taylor before the webinar. The event will be recorded for later viewing in case you find that time inconvenient.