With the passing of the 2014 Farm Bill, producers and land owners have some important decisions to make regarding their involvement in the federal government's crop programs. A major change was the integration between the use of crop insurance and the bill's programs. The new bill eliminates the old DCP and ACRE programs, allows land owners to update their yields and reallocate base acres and gives producers the power to decide which of new programs they want to participate in.

"This is much more based on risk management where the old programs were price support programs, that's the main difference," said University of Minnesota Extension Educator Robert Holcomb. He was among the presenters at a seminar held at Southwest Minnesota State University Monday that aimed to explain the options and strategies farmers could use to navigate the new crop programs.

"(Land owners) need to update their yields and then they need to choose whether they want to keep their old base acres or update it to say what they are planting," Holcomb said. "There's some people that may not have updated yields since the 1980s. In my mind, there is no reason why you don't go in there and update your yields because they're going to benefit from that moving forward."

After land owners make their decisions, producers will need to elect which new program to enroll in that are offered in the 2014 Farm Bill. Agricultural Risk Coverage (ARC) offers revenue protection at either the county level (ARC-CO) or individual farm level (ARC-IC) where payments are made when the actual revenue is less than the ARC guarantee. The other program, Price Loss Coverage (or PLC) offers price protection where payments are made when the effective price is less than the reference price for a covered commodity. With either option, farmers will need to decide which program best fits them and their farmland and the type of risk management they want.

"What the producers really need to decide this year is what is important to them." Holcomb said. "If protection against catastrophic losses is very important, then they need to pick PLC. If they're concerned about yield loss and revenue protection, then they need to go with ARC-CO."

Land owners will need to decide if they will update their yields and base acres by the end of February, and producers will need to elect which program to choose by end of March. Recent price drops and unpredictable weather don't make their decisions any easier.

"Nobody knows that the future is going to bring, let alone four years out," Holcomb said. "That's what makes these decisions difficult."

Source - http://www.marshallindependent.com/