I don't know about you, but I seem to be in a state of total confusion much of the time. I have decided to accept this state of befuddlement as the norm concerning the new Farm Bill and just try to understand as much about it as my small mind will permit. In yesterday's mail, I received the USDA-FSA newsletter containing information on 42 topics. You will find topics from beginning farmer loans to honey bees to the new Dairy Margin Protection Program.
I had a call last week from a producer who had read somewhere that he needed to get into the Farm Service Agency Farm Programs office to update their farm's acreage and yield history. The Farm Bill (the Agricultural Act of 2014) was signed into law on February 7, 2014 after several years of debate. This Farm Bill will be in effect from 2014-2018. Let's review a few important items you need to be aware of.
Let's first take a look at the Acreage History and Yield Notification program. As a producer or a land owner, you should have received a notification to come into to the FSA Farm Programs office to update your current base acres, yields and 2009-2012 planting history. If your history has not changed, you do not need to contact the office. If your crop acreage has changed, you will need to verify your data before you can enroll in the Agriculture Risk Coverage and Price Loss Coverage programs. More information is available at www.fsa.gov/wi.
Dairy producer will have one of two options for managing their dairy business risk. Dairy producers can choose to participate in either the Dairy Margin Protection Program or the Livestock Gross Margin Program.
The new Dairy Margin Protection Program (MPP) replaces the old Milk Loss Income Contract program (MILC ends August 31, 2014) and will be effective on September 1, 2014, through December 31, 2018. MPP-Dairy offers protection for dairy producers when the difference (margin) between the all-milk price and the national average feed cost falls below a certain producer selected margin.
The margin protection program offers dairy producers: (1) catastrophic coverage, at no cost to the producer, other than an annual $100 administrative fee. Catastrophic coverage provides payments to participating producers when their margin is less than $4.00 per hundredweight (cwt). The national dairy production margin is the difference between the all-milk price and average feed costs. Producers may purchase coverage that provides payments when margins are between $4.00 and $8.00 per cwt., in $0.50 increments and can also determine their desired coverage ranging from 25-90% of their projected yearly milk production. Producers can purchase margin protection coverage from a government approved vendor. The premium will increase as one protects a wider margin (i.e. income over feed cost) and the desired amount of produced milk one wants to cover.
Informational meetings are scheduled for September 4th at the Millhome Supper Club east of Kiel, Wisconsin and at the Dodge County Administration Building in Juneau on September 8th.
At this time, it is believed the deadline for enrollment in the MPP program will be November 28th. Decision making tools will be available this fall. Once that tool is released, I will be assisting producers with that tool in the adult continuing education classes at both Moraine Park and Lakeshore Technical Colleges.
The area of focus in the adult Farm Business Course will be "Understanding Farm Financial Management". Those participating in the class will learn how the risk management tools can be used to negate low prices and thereby avoiding periods of negative cash flows. Other things that will be discussed later this fall and winter in the Farm Business Program will be: preparing a farm balance sheet, constructing cash flow projections, evaluating flexible land rents and working with crop and livestock production budgets.
To participate in these discussion groups, contact Greg Booher, instructor at 920-960-0551 or greg.booher@gotoltc.edu.
Greg Booher
Adult Farm Business Instructor-Ag Journalist
Lakeshore Technical College, eastern Wisconsin
9.4.2014