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2013 Farm Bill

2013 Farm Bill. ISU Extension Farm Management In-service Nashua, Iowa May 20, 2013 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911. Farm Bill Progress?. House and Senate have basically revived their packages from last year

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2013 Farm Bill

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  1. 2013 Farm Bill ISU Extension Farm Management In-service Nashua, Iowa May 20, 2013 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911

  2. Farm Bill Progress? • House and Senate have basically revived their packages from last year • A couple of new wrinkles have been added to address specific crop concerns • Like last year, the key will be the floor vote in the House (which didn’t happen last year)

  3. Ideas on the Next Farm Bill • Let’s look at the common features • Both versions of the farm bill eliminate direct payments, countercyclical payments, ACRE, and SURE • The marketing loan program would continue • Livestock disaster programs would be reestablished

  4. Reference Prices Senate: 55% of 5-yr Olympic average MYA price House: Set by law Corn $3.70 Wheat $5.50 Soybean $8.40

  5. ARC or RLC instead of ACRE Revenue-based support program Revenues based on 5-year Olympic averages for yields and prices Yields and prices have cups (T-yields and reference prices)

  6. Revenue Programs

  7. Revenue Programs

  8. AMP or PLC instead of CCP Price-based support program Reference prices establish targets Works like CCP Payment rate = Max(0, Reference price – Max(MYA price, Loan rate))

  9. Price Programs

  10. Dairy • Dairy Producer Margin Protection Program • Voluntary margin coverage, with the opportunity for supplemental coverage • Dairy Market Stabilization Program • Managed supplies when margins fall • Packages are very similar across the House and Senate versions

  11. Supplemental Coverage Option (SCO) • An additional policy to cover “shallow losses” • Shallow loss = part of the deductible on the producer’s underlying crop insurance policy • SCO is county-level yield or revenue policy • Indemnities are paid when the county experiences losses greater than 10% of the expected yield or revenue level, but payments are not more than the original deductible

  12. SCO Examples from Last Year’s Bills Source: Congressional Research Service

  13. Thank you for your time!Any questions?My web site:http://www.econ.iastate.edu/~chart/Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/Ag Decision Maker:http://www.extension.iastate.edu/agdm/

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