| TheFencePost.com

USDA designates Scotts Bluff County, Neb., as a primary natural disaster area

WASHINGTON — Agriculture Secretary Sonny Perdue designated Scotts Bluff County, Nebraska, as a primary natural disaster area. Producers who suffered losses due to snowstorms and freeze that occurred Oct. 9-10, 2019, and Oct. 26-27, 2019, may be eligible for U.S. Department of Agriculture Farm Service Agency emergency loans.

This natural disaster designation allows FSA to extend much-needed emergency credit to producers recovering from natural disasters. Emergency loans can be used to meet various recovery needs including the replacement of essential items such as equipment or livestock, reorganization of a farming operation or the refinance of certain debts.

Producers in the contiguous Nebraska counties of Banner, Box Butte, Morrill and Sioux, along with Goshen County, Wyoming, are also eligible to apply for emergency loans.

The deadline to apply for these emergency loans is Oct. 7, 2020.

FSA will review the loans based on the extent of losses, security available and repayment ability.

FSA has a variety of additional programs to help farmers recover from the impacts of this disaster. FSA programs that do not require a disaster declaration include: Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program; Emergency Conservation Program; Livestock Forage Disaster Program; Livestock Indemnity Program; Operating and Farm Ownership Loans; and the Tree Assistance Program.

Farmers may contact their local USDA service center for further information on eligibility requirements and application procedures for these and other programs. Additional information is also available online at farmers.gov/recover.

Benchmark milk price falls $2.32

The Agriculture Department announced the first Federal order Class III benchmark milk price of 2020 at $17.05 per hundredweight, down $2.32 from December but $3.09 above January 2019 and the highest January Class III price since 2014.

It just might be the low point for 2020 as well. The Feb. 7 Class III futures settlements portended a February price at $17.06; March, $17.42; April, $17.50; and May at $17.45. The peak was $17.91 in September and October.

The January Class IV price is $16.65, down a nickel from December but $1.17 above a year ago and the highest January Class IV price since 2014.

Powder and butterfat values pulled the third Global Dairy Trade auction of 2020 down, reversing the previous two upticks as apprehensive traders await the continuing fallout of the coronavirus outbreak. The weighted average of products offered fell 4.7%, following the 1.7% rise on Jan. 21 and 2.8% on Jan. 7.

Whole milk powder led the declines, down 6.2%, after it gained 2.4% Jan. 21. Anhydrous milkfat was down 4.5%, after falling 2.6% last time and skim milk powder was down 4.2% after inching up 0.7%.

Gains were led by rennet casein and GDT Cheddar, both up 6.0%, after the Cheddar was up 0.6% higher last time. Butter inched 0.2% higher, following a 5.5% jump in the last event.

FC Stone equated the GDT 80 percent butterfat butter price to $1.8841 per pound U.S., up fractionally from the last event. CME butter closed Feb. 7 at $1.8325. GDT Cheddar cheese equated to $1.9513 per pound, up 11.5 cents, and compares to Feb. 7’s CME block Cheddar at $1.93. GDT skim milk powder averaged $1.3186 per pound and compares to $1.3770 last time. Whole milk powder averaged $1.3786, down from $1.4663. CME Grade A nonfat dry milk closed Feb. 7 at $1.25 per pound.

President Trump has signed the US-Mexico-Canada Agreement which should benefit U.S. dairy exports and China announced recently that it will halve the additional tariffs it imposed last September on $75 billion worth of U.S. imports, even as it deals with the escalating coronavirus outbreak there. China imports a lot of dairy products but most originate from New Zealand and the EU however easing trade relations with the trading giant holds great potential for the U.S. dairy industry.

Dairy prices at the Chicago Mercantile Exchange came under some downward pressure the first week of February. The Cheddar blocks fell to $1.8950 per pound Feb. 6 but rallied to close Feb. 7 at $1.93, up a penny on the week and 40.25 cents above a year ago.

The barrels lost 4.5 cents Feb. 3, falling to the lowest level since March 13, 2019, and set a new record spread of 46.5 cents. After losing 11 cents the previous week, they closed at $1.4775, down another 2.25 cents, 10.5 cents above a year ago, but at an unsustainable 45.25 cents below the blocks.

Cheese plant managers cite the drastic shift in markets since fall 2019 and how they are negatively affecting orders, according to Dairy Market News. Others suggest 2020 sales have been steady but one certainty is the availability of milk.

Heavy milk supplies are also heading to western vats and cheese output is at or near full capacity. Inventories are relatively stable and able to cover most buyer needs but contacts suggest demand is steady.

Cash butter saw its Feb. 7 closing at $1.8325, 6.75 cents lower on the week and 46.25 cents below a year ago.

Central region butter output has been higher this year compared to previous years, according to plant managers. With the bountiful abundance of cream from Western and Midwestern sources, churns are busy with cream trucks lined up outside.

Western butter production is also active. Cream supplies are reportedly tighter than they have been but there is still plenty to keep the churns full.

Grade A nonfat dry milk fell to $1.2150 Feb. 4 but closed Feb. 7 at $1.25, up a penny on the week and 25.5 cents above a year ago.

CME dry whey finished at 39 cents per pound, up 2.5 cents on the week, all on unfilled bids, and 2.5 cents above a year ago.

A lower All Milk price and higher feed prices pulled the December milk feed price ratio down, ending five consecutive months of gain for U.S. dairy farmers. The USDA’s latest Ag Prices report put the ratio at 2.55, down from 2.61 in November and compares to 2.07 in December 2018.

The index is based on the current milk price in relationship to feed prices for a set dairy ration.

The U.S. All-Milk price averaged $20.70 per hundredweight (cwt.), down 30 cents from November but $4.10 above December 2018.

The national average corn price averaged $3.71 per bushel, up 3 cents from November and 17 cents per bushel above December 2018. Soybeans averaged $8.70 per bushel, up 11 cents from November and 14 cents per bushel above a year ago. Alfalfa hay averaged $175 per ton, up $2 from November but $4 per ton below a year ago.

The December cull price for beef and dairy combined averaged $59.30 per cwt., up $1.60 from November, $7.50 above December 2018, but is $12.30 below the 2011 base average of $71.60 per cwt. ❖

Economist: China animal diseases as big a problem as coronavirus

BONITA SPRINGS, Fla. — African swine fever and an outbreak of highly pathogenic avian influenza are as big a problem for U.S. agricultural exporters as the human coronavirus, Bob Young, the former American Farm Bureau Federation chief economist, told the crop insurance industry here today.

Young, who now runs his own consulting firm, noted that since 2018 there have been 165 outbreaks of African swine fever in 32 regions of China and that about 1.2 million pigs have been culled. That may not seem like a large number, but the biggest factor is that the Chinese have been killing their breeding herds, he said.

For U.S. crop farmers and exporters hoping to resume normal feed exports to China, the question is whether the Chinese will need the feed.

“What if they don’t want to buy it because they don’t have the pigs,” Young said in a presentation on the state of the U.S. farm economy.

In addition, he noted, in recent weeks, there have been outbreaks of bird flu that have resulted in the destruction of thousands of chickens. That outbreak would have gotten more attention if the outbreak of human coronavirus — now called COVID-19 by the World Health Organization — were not so dire.

The coronavirus may also slow the Chinese economy.

Young said he does not view the U.S. farm economy as in crisis, but that due to these issues in China he sees “all sorts of uncertainty for the crop sector.”

Young said he doesn’t know whether the Trump administration will make another round of the trade aid known as Market Faciliation Program payments. Concern about deficits would make it “tough to talk about that, but it is a year divisible by four,” he said, referring to the presidential election. “It is a political question.”

Young asked the crop insurance executives at the meeting if they have lost business or expect to lose business due to farmers’ financial problems, but no one raised a hand.

Cattle producers inform court RFID mandate is not resolved

BILLINGS, Mont. — Last week the attorney for R-CALF USA and several individual rancher-plaintiffs, who alleged in October that the U.S. Department of Agriculture and its Animal and Plant Health Inspection Service violated U.S. law by attempting to force RFID technology upon the entire U.S. cattle industry, filed a response to the agencies’ motion to dismiss.

The lawsuit, filed on Oct. 4, 2019, by Harriet Hageman, senior litigation counsel for the New Civil Liberties Alliance, alleged that the agencies’ April 2019 notice to discontinue all other forms of official animal identification by Jan. 1, 2023, and begin mandating the exclusive use of radio frequency identification (RFID) eartags and premises registration going forward was a blatant example of unlawful government overreach.

Three weeks after the lawsuit was filed, the agencies, after having already removed their mandate from their official Website in response to the suit, posted a statement indicating the RFID mandate was no longer representative of the agencies’ current policy.

The agencies then rejected R-CALF USA’s settlement proposal which sought to provide assurances for the U.S. cattle industry that the agencies would not repeat their unlawful actions. That settlement proposal also sought to ensure the agencies would not proceed with their stated goal of eliminating all other forms of official animal identification. The proposal also sought to stop the agencies from using materials and information provided by committees that were unlawfully formed to support the agencies’ single-minded approach to animal disease traceability.

Instead of responding to the settlement offer the agencies moved forward with filing a motion to dismiss, claiming the lawsuit was now mooted by the withdrawal of the RFID mandate.

Hageman informed the court this week that the agencies’ mere withdrawal of the unlawful mandate, along with their insistence that it did not violate U.S. law, is insufficient to resolve the continued threat the agencies pose to the statutory and regulatory rights and privileges of independent U.S. cattle producers. Hageman also informed the court that the agencies’ use of the “tainted” committees is cause for concern and that the livestock producers should be allowed to conduct discovery to find out what happened here.

According to R-CALF USA CEO Bill Bullard, the agencies’ position is that because they have temporarily pulled back on pursuing an unlawful RFID mandate that the court should now “trust them.” They claim that such trust is warranted because they promise to seek “industry input” when they pursue this same policy in the future. But, he said the agencies’ violations run far deeper than their unlawful attempt to burden independent cattle producers with a costly RFID mandate, and the implications for the cattle industry are serious.

“It’s important for producers to know that had we not stopped this mandate then cattle producers who are now voluntarily using RFID technology in return for market premiums would see those premiums evaporate as soon as the entire industry was forced by the government to give up all other forms of animal identification.”

Hageman notes that this case is important from the standpoint of preventing federal agencies from circumventing the Administrative Procedure Act and violating the law to try to impose costly and likely unworkable requirements on the livestock industry.

“What we have so far learned in this case is that when independent cattle producers organize and step to the plate to defend and protect their rights, they can be successful,” Bullard said.

Ranchers get help from unexpected source

Agricultural producers in southwest Colorado, mostly cow-calf ranchers, expended less labor to access the same amount of water to irrigate their pastures since implementing improvements to their irrigation ditches as part of a community-wide project.

They also have seen improvement in riparian habitats. A new video, which can be viewed at https://www.coagwater.org/stream-management, portrays the impact to the community of these project improvements.

The improvements were implemented following development of the Mancos Watershed Plan in 2011. The community project was able to acquire $6 million along with Natural Resources Conservation Service cost share dollars to improve irrigation ditch diversion structures, install pipe irrigation systems and reduce ditch bank erosion in some of the 49 ditches that divert water off the Mancos River and its tributaries. The funding also allowed the watershed to improve the river’s fisheries.

“Ranchers involved in the project were skeptical at first of the help proposed by the watershed plan and the different values and perspectives of those involved in the project,” said Gretchen Rank, director of the Mancos Conservation District. “But as they saw the opportunities to improve their irrigation system, while also improving the environmental health of the river, they agreed to work together on the project.”

“We learned not to make assumptions based on personal views and knowledge,” Rank said. “Involvement in the stakeholder process enabled participants to recognize the diversity of opinions, needs and knowledge that are brought to the table. Throughout the process, participants gained respect for other perspectives, often changing the way they think about the watershed. Decisions made at the watershed level affect everyone within that watershed, so it is important that decisions are data driven and community informed for the best possible outcomes.”

Through the watershed planning process, several ditches were identified as being in dire need of better diversion structures that would require a lot less maintenance and upkeep, according to Ben Wolcott, Wolcott Ranch, Mancos, Colo., who also served on the Mancos Conservation District board of directors.

“Before any of this got upgraded, irrigation diversions were just push-up structures and anything cobbled together, sometimes tree trunks and whatever was in the river,” said Wolcott. “Most years we didn’t even get any water, but now with the new diversion structures and screens we have in place in front of piped ditches, we’ve seen leaps and bounds in (improved) efficiency. I go to each headgate once a week instead of daily, and that is mostly a five-minute maintenance check. The diversions can handle high water really well and then still divert water under low flows.”

Another rancher who has benefited from the project is Ryan Brown, Reddert Ranch, Mancos, Colo. “Over my 60 years, I’ve seen the river channel deepen, which makes it harder to dam up diversions. It was helpful when the Mancos Conservation District came to us and asked if it could help make those diversions more efficient.”

Tom Weaver, Ratliff Homestead, Mancos, Colo., said that before water piping was installed there was a lot of seepage and evaporation in his and his neighbor’s irrigation ditch. “There’s more (water) going down the river now due to increased efficiency.”

Rank added that the piping and diversion improvements have allowed fish to pass through upstream to reach their spawning grounds, while reducing soil erosion and the spread of noxious weeds.

“I think it is important for local landowners to stay involved with their communities and with the organizations that are helping facilitate the changes and improvements like this,” said Wolcott. “Their voice can be heard, and their values can be shared.”

The Mancos Watershed Plan is the second of three projects showcased in a video series. The series is produced by the Colorado Ag Water Alliance and River Network with the goal of demonstrating how farmers, ranchers, ditch companies, conservation districts, environmental groups and other entities have come together to improve river health, irrigation efficiency and environmental and recreational use of Colorado’s limited water supplies.

To see a six-minute video of the Mancos Watershed Project, a fact sheet on this project and other resources, visit https://www.coagwater.org/stream-management. For more resources on funding for agricultural infrastructure improvements, contact Greg Peterson with the Colorado Agricultural Water Alliance at coagwater@gmail.com.

Grants to help fund stream management planning, such as those used by the Mancos Watershed Project, are available through the Colorado Water Conservation Board.

For more information on stream management planning in your area, visit coloradosmp.org or contact Alyssa Clarida with the Colorado Department of Agriculture State Conservation Board at alyssa.clarida@state.co.us. ❖

Safari Club International raises $140,000 to help defeat Colorado wolf ballot initiative

Safari Club International, the leader in defending the freedom to hunt and promoting wildlife conservation worldwide, raised an astounding $140,000 in response to a strategic call to action focused on the proposed forced reintroduction of wolves into Colorado.

Led by the Colorado delegation of SCI during last week’s 48th Annual SCI Convention, these funds will be utilized in the state to advance concerns surrounding the Colorado Wolf Ballot Initiative.

SCI hosted an educational seminar focused on the issue and the SCI board of directors also discussed a strategy and detailed course of action to address the threats posed by this issue and prevent the initiative from advancing. Chapters from across the country stepped up to help fund this effort and SCI will continue generating additional revenue for this fight until it is finished in November.

SCI will immediately begin engaging in a grassroots campaign led by Coloradoan’s Protecting Wildlife alongside our partners from the Rocky Mountain Elk Foundation, Colorado Farm Bureau, and the Colorado Woolgrowers Association. Interested parties are invited to view their website for more information on the “Rethink Wolves” campaign.

The proposed ballot measure would mandate the Colorado Parks and Wildlife Commission to develop a plan to restore and manage gray wolves in Colorado “using the best scientific data available” and “designed to resolve conflicts with persons engaged in ranching and farming.” According to documents obtained by Safari Club International through a Colorado Open Records Act request, the reintroduction effort would cost Colorado Parks and Wildlife approximately $6 million dollars through the first eight years of implementation, with additional yearly expenses topping over three-quarters of a million dollars annually.

“Wildlife management by ballot box is a horrible precedent to set,” said Ben Cassidy, director of government affairs for SCI. “Wildlife management decisions should be made by the biologists, wildlife managers and scientists who have the expertise and experience to make decisions that will affect Colorado’s wildlife and those who enjoy that wildlife.”

Aside from the obvious safety concern of releasing wolves into a rapidly growing state that already boasts 6 million residents, the ballot effort has raised red flags in the hunting community. Forcing the sudden presence of an apex predator into the ecosystem would likely have disastrous effects on the large ungulate populations for which Colorado is famous.

Fewer elk and mule deer from predation means fewer hunting tags available for resident and non-resident hunters. Such a reduction in tags and the hunting licenses required to purchase the tags would result in a loss of revenue for CPW for management of wildlife and habitat. Over time, this could impact the federal funding the state of Colorado receives through the Pittman-Robertson Act, which distributes funds based on the number of hunters a state has for the purpose of wildlife management.

Hunters are joined in their concern by the agricultural community who fear that wolf predation on livestock could damage an industry that contributes more than $4 billion a year into the state. Lastly, there are also Endangered Species Act implications. Wolves are an endangered species and will continue to be so until the U.S. Fish and Wildlife Service delists them.

Safari Club International will continue to monitor this situation and will be involved in every way we can to ensure state management authority isn’t undermined at the ballot box. To receive important updates and alerts about not only this ballot issue in Colorado, but other important fights around the country sign up for SCI’s Hunter Advocacy Action Center at https://p2a.co/r2682hs?iframe=1. ❖

Students test prairie restoration methods for joint Prairie Corridor project

LINCOLN, Neb. — Stand at the top of the last hill at Pioneers Park in Lincoln, look south, and see bison and elk roaming the fenced-in tallgrass prairie there. But look even further into the horizon and find the Prairie Corridor on Haines Branch, a tallgrass prairie passageway that eventually will connect south Lincoln to the Spring Creek Audubon Center at Denton.

The vision for the project is to restore 7,800 acres of prairie along the Haines Branch of Salt Creek and build in trails and exploration hot spots such as the Conestoga Lake, Denton Prairie and Bobcat Prairie.

It is at Bobcat where six University of Nebraska-Lincoln students spent their summer gaining a greater understanding of the best ways to implement prairie restorations for long-term ecological diversity. The prairie sits 16 miles south of Lincoln, a 297-acre plot of cascading pasture and trees in various stages of restoration, 25 of which are dedicated to research projects by the School of Natural Resources. Dave Wedin, ecosystem and prairie ecologist at the school, and Katharine Hogan, applied ecology doctorate student with the National Research Traineeship program at SNR, led those studies on 24 plots, divided into randomly assigned experimental and control spaces.

The goal was to compare the two established methods of prairie restoration plantings and management: grassland conservation program, used by the Conservation Reserve Program, and high-diversity local ecotype restorations, used elsewhere along the corridor.

“We are studying the success of these two methods for adding native species to existing low-diversity grassland,” Wedin said. “One of our goals is to see where efficiencies in time and money can be gained in this type of restoration.”

While both approaches contribute to grassland conservation in the Nebraska landscape, he said, the researchers want to know whether differences in land preparation, planting, and diversity of seed mix make a long-term difference for restoration success. Of particular concern are native pollinators, which are a priority for the Prairie Corridor.

In May, the plots were planted, and under a beating late-June sun, the students counted and documented the diversity of seedlings that had come up, fully knowing next year and the year after and the year after the counts will need to be repeated. Establishing tallgrass prairies take time, Wedin said, and what it looks like today will shift over time. But the benefits will be countless.

While all students participated in the prairie planting experiment, they each also had a project of their own, funded by Nebraska Environmental Trust; Cabela’s Apprenticeship; or UCARE funds. Through the semester, we’ll highlight those individual projects, including:

• “Bird communities in the Prairie Corridor,” by Grace Schuster, a junior fisheries and wildlife student;

• “Prairie Corridor plants,” by Elizabeth Park, a junior environmental studies student;

• “Assessment of insect communities among different prairie habitats” by Hunter Brophy, a sophomore insect science student;

• “Spatial and temporal variation in nutrient chemistry in the Haines Branch,” by Phuong Minh Tu Le, an environmental restoration science student; and

• “Platte Basin Timelapse: Prairie Corridor,” by Ethan Freese, an applied science graduate student.

The Prairie Corridor project is a joint effort among more than 30 organizations and individuals, including the University of Nebraska-Lincoln; Lincoln Parks and Recreation; Lincoln Parks Foundation; Spring Creek Prairie Audubon Center; Great Plains Network; Lancaster County; Lower Platte South Natural Resources District and Nebraska Game and Parks Commission.

Learn more about the project’s history at https://journalstar.com/niche/l-magazine/haines-branch-prairie-corridor-project-an-opportunity-to-leave-a/article_f02e7238-bbf9-55a6-9050-f270648ebd3b.html. ❖

Feral swine eradicated from Colorado thanks to state and federal partnership

PUEBLO, Colo. – All known feral swine have been eliminated from Colorado thanks to a near 15-year state and federal partnership comprised of the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service Wildlife Services, the USDA Forest Service, Colorado Parks and Wildlife and the Colorado Department of Agriculture.

The partnership formed in the early 2000s as a task force to manage invasive feral swine, which root up crops and pastures causing billions in damage nationwide each year. Feral swine also spread disease to livestock, wildlife and humans. Ground-nesting birds and other wildlife are easy prey for feral swine. And the swine put native wildlife at risk by competing for resources and destroying habitats and ecosystems.

Feral swine are incredibly hardy animals and can survive, even thrive, in almost any habitat. That combined with high reproductive rates makes their ability to establish new populations extremely effective.

“The eradication of feral swine will help protect and benefit Colorado’s agricultural crops and livestock as well as wildlife, wildlife habitat and private and public lands,” said Travis Black, deputy regional manager of CPW’s Southeast Region.

“This achievement points to the value of collaborative efforts in staffing, funding and resources to accomplish a common goal,” said Wayne East, CDA agriculture wildlife liaison.

“Partnerships are important to completing complex tasks and we have done something great for agriculture and the wildlife of Colorado by eradicating feral swine,” said Martin Lowney, USDA APHIS WS, state director.

The Colorado feral swine task force will continue to monitor to ensure the state remains free of this invasive species and the damage they can inflict.

You can help keep Colorado free of feral swine.

Spread the word that in Colorado it’s illegal to possess, transport or release feral swine, wild swine species or hybrids.

Report sightings of feral swine or transportation activities to USDA Wildlife Services at 1-866-4-USDA-WS (1-866-487-3297) or Colorado Parks and Wildlife at (303) 297-1192.

For more information about the National Feral Swine Damage Management Program, visit https://www.aphis.usda.gov/aphis/ourfocus/wildlifedamage/operational-activities/feral-swine.

Hemp for horses? Tarleton researcher investigating benefits

STEPHENVILLE, Texas — Hay may be for horses, but — now more than ever — so is hemp.

Using CBD to treat horses with arthritis or anxiety has become mainstream since the 2018 farm bill legalized industrial hemp. But does it work?

Researchers at Tarleton State University’s Equine Center are looking into that right now in a unique study that has the attention of horse owners around the world.

“I have just been overwhelmed by the level of interest in this study,” said Dr. Kimberly Guay, who is overseeing the research. “By now, horse owners have all heard the hype about the potential benefits of CBD oil. Here at Tarleton, we are working to give them the reliable data that’s just not there yet.”

See a video about Guay’s study: http://www.youtube.com/user/tamusystem?sub_confirmation=1.

Guay’s study seeks to quantify how CBD affects inflammation, stress and stereotypical negative behaviors in horses.

Guay and her student researchers from Tarleton’s equine science classes give horses in the trial different kinds of CBD, such as oil or pellets. Then they measure the physiological effects of the non-psychoactive substance on the horses’ heart rate and cortisol levels. They also observe the horses after dosing them with CBD to note its effect on any common obsessive compulsive behaviors common to horses that spend time in a stall or trailer, such as cribbing, which is when a horse bites on a fence or gate.

“We are also tracking how long CBD stays in the horse’s system,” Guay said. “Many people who compete with their horses are interested in using CBD products to reduce stress and inflammation, but many event organizers are still working through their CBD restrictions for horses in competition.”

Horse owners eagerly await the results, which Guay said she expects to publish sometime in 2021.

“Tarleton Texans know how to sort out the facts from the hype,” said John Sharp, chancellor of The Texas A&M University System. “This practical, fact-based research is the exactly the kind of thing folks know they can count on from The Texas A&M University System.”

Reviewing ARC, PLC and SCO commodity safety net programs

For farmers with base acres and eligibility to participate in Title I commodity safety net programs, the deadline for election and enrollment of covered commodities such as corn, soybeans, wheat, seed cotton, rice and peanuts into Agriculture Risk Coverage or Price Loss Coverage is quickly approaching. The cutoff date for completing the program election and enrollment process for the 2019 crop year is March 16, and the closing date for the 2020 crop year is June 30. (A producer can sign up for both crop years ahead of the March 16 deadline.)

Farmers enrolling in ARC or PLC must make a one-time election on a commodity-by-commodity basis in either ARC-County Option or PLC, or they may enroll all covered commodities in ARC-Individual Coverage. Farmers choosing to enroll commodities in PLC may also purchase additional shallow loss coverage through the Risk Management Agency’s Supplemental Coverage Option program. For example, a producer may enroll all seed cotton base acres in PLC and SCO and enroll all soybean base acres in ARC-CO, or he or she may enroll all seed cotton and soybean base acres in ARC-IC.

There are 22 covered commodities eligible for ARC and PLC. These commodities include corn, wheat, soybeans, seed cotton, grain sorghum, barley, rice-long grain, peanuts, oats, sunflowers, canola, rice-temperate japonica, dry peas, lentils, flaxseed, rice-medium grain, safflower, large chickpeas, mustard, small chickpeas, sesame, crambe and rapeseed. At the end of the 2014 farm bill sign-up periods in 2018, there were a total of 253.8 million base acres enrolled in ARC and PLC, with 68.4 million acres in PLC, 167.9 million acres in ARC-CO and 2.07 million acres in ARC-IC. Figure 1 highlights the base acres for select covered commodities based on the 2018 program year.

To assist farmers in making program decisions, this Market Intel provides an overview of each of the commodity safety net programs.

ARC

Agriculture Risk Coverage is an income support program that provides payments when actual county-level crop revenue, based on county-average yields and the marketing year average price, falls below 86% of the benchmark revenue.

The benchmark revenue is the product of the five-year Olympic moving average of county yield and marketing year average prices. The five-year Olympic average drops the highest and lowest values from the sample and averages the remaining three values. For example, the 2019 program year will average prices and yields from 2013 to 2017.

Program payments under ARC-CO are capped at 10% of the ARC-CO benchmark revenue. ARC-CO program payments are paid on 85% of the farm’s base acres of the covered commodity. Previous Market Intel articles reviewed ARC-CO details and payment expectations for the 2019 program year, i.e., ARC-County, A Bird in The Hand for Some in 2019 at https://www.fb.org/market-intel/arc-county-a-bird-in-the-hand-for-some-in-2019 and What’s in Title I of the 2018 Farm Bill for Field Crops? at https://www.fb.org/market-intel/whats-in-title-i-of-the-2018-farm-bill-for-field-crops.

The Congressional Budget Office’s January 2020 Baseline for Farm Programs projects ARC-CO expenditures over the next 10 years to total $5.29 billion. ARC-CO expenditures are expected to range from a high of $1.06 billion in 2019 to a low of $351 million in 2024. At $1.9 billion, corn is projected to be the maximum outlay over the 10-year period, with the largest expenditure, $401 million, projected in 2019. Soybean projections total $1.27 billion from 2020 through 2030, with the largest outlay projected at $311 million, in 2021. Outlays for wheat are expected to reach $739 million over the 10-year period, with the largest expenditure coming in at $354 million, in 2019. Seed cotton projections come in at $735 million over the next 10 years, with the highest outlay, $75 million, projected to occur in 2021.

While ARC-CO is a commodity-by-commodity program, ARC-IC is a whole farm program that bases program benefits on individual farm yields for all covered commodities. An ARC-IC payment is triggered when the actual crop revenue for all covered commodities planted on the farm is less than 86% of the benchmark revenue and is capped at 10% of the individual weighted benchmark revenue. While ARC-CO program payments are paid based on 85% of the farm’s base acres, ARC-IC limits payments to 65% of the farm’s base acres.

The CBO’s 10-year projections put the ARC-IC program cost at $109 million from 2020 through 2030. The largest expenditure for the program, $23 million, is estimated to occur in 2019.

PLC

The PLC program delivers a deficiency payment when the effective price of a covered commodity is less than the effective reference price, i.e., when the price of a commodity falls below a specific price floor. For example, a $3.30 market year average price for corn is below the effective reference price of $3.70 and would trigger a program payment of 40 cents per bushel. The effective price equals the higher of the MYA or the national average loan rate for the covered commodity.

A new feature in the 2018 farm bill is a floating reference price in PLC. Under a floating reference price, the effective reference price is determined by comparing the statutory reference price to 85% of the five-year Olympic moving average of the MYA price, selecting the higher one, then comparing it to 115% of the reference price and picking the smallest.

Like ARC-CO, PLC program payments are made on 85% of the farm’s base acres and the farm’s PLC program yield. Farm owners will have an opportunity in 2020 to voluntarily update PLC yields of each individual covered commodity on their farm. The updated yield is equal to 90% of each covered commodity’s 2013-2017 simple average yield, but a yield floor equal to 75% of the county yield is in place to address any poor crop yields in the sample period. Yield updates can occur until Sept. 30.

The PLC projections from CBO put total expenditures at $62.98 billion from 2020 through 2030. Those projections run from a high of $7.3 billion in 2022 to a low of $2.03 billion in 2019. Corn is projected to be the largest expenditure overall at $25 billion, with the largest outlay, $3.3 billion, occurring in 2022. A total of $10.5 billion is expected to be spent on wheat over the 10-year period, with the largest expenditure, $1.78 billion, occurring in 2021. Total spending for seed cotton is projected at $4.8 billion and rice is expected to come in at $7.4 billion from 2020 through 2030. Soybeans are projected at $3.04 billion over the 10-year period, with the largest expenditure, $467 million, occurring in 2023.

SCO, commonly known as shallow loss coverage, is a county-level crop insurance product provided by RMA that offers additional coverage for a portion of the underlying crop insurance policy deductible. It is considered a companion plan and can be added as an endorsement to a crop insurance product at a subsidy rate of 65%. SCO provides participating farmers an opportunity to buy up additional coverage, up to 86%, when used with Yield Protection, Revenue Protection or Revenue Protection with the Harvest Price Exclusion policies.

Producers who elect to participate in PLC also have an option to purchase SCO. It is available for spring barley, corn, soybeans, wheat, sorghum, seed cotton and rice and for alfalfa seed, canola, cultivated wild rice, dry peas, forage production, grass seed, mint, oats, onions, potatoes and rye in select counties.

SCO follows the coverage of the underlying policy, i.e., if Revenue Protection is the underlying policy, then SCO would provide additional revenue protection; if Yield Protection is the underlying policy, then SCO would provide additional yield protection. For example, if a corn grower purchases a Revenue Protection policy with a 75% coverage level as the underlying policy, the grower has the option to buy the additional 11% in SCO coverage up to 86% total revenue protection. A payment is triggered on the underlying policy when the individual revenue is less than 75% of the expected insured level. However, the SCO coverage begins to pay when the county average revenue falls below 86% of the expected level It is paid in full when county revenue falls below the original 75% coverage level of participation.

Producers who elect to participate in either ARC-CO or ARC-IC are not eligible for SCO.

The 2018 farm bill made several modifications to the ARC and PLC programs, and producers now have an opportunity to re-elect on a commodity-by-commodity basis new program determinations for ARC and PLC for the 2019 and 2020 crop years. Then, beginning with the 2021 crop year, producers will be able to make an annual election in ARC or PLC on a commodity-by-commodity basis.

Making these elections can be complex and farmers must consider several factors such as expected prices and yields, as well as the impact of prevented plantings on program performance. To help farmers make an informed decision ahead of the March deadline, there are two web-based decision-making tools available. These include the Gardner-farmdoc Payment Calculator, a University of Illinois tool that offers farmers the ability to run payment estimate modeling for their farms and counties for ARC-County and PLC, and the ARC and PLC Decision Tool, Texas A&M’s user-friendly tool that allows producers to analyze payment yield updates and expected payments for 2019 and 2020. Producers who have used the tool in the past should see their username, and much of their farm data will already be available in the system.