Farms.com Home   News

Should You Reallocate Bases And Update Program Yields?

Make the reallocation decision on a farm-by-farm basis.

Although the 2014 farm bill allows producers to reallocate crop bases and update program yields, everyone may not be better off making these changes.

The decision to update program yields is straightforward, according to North Dakota State University Extension Service farm management specialist Dwight Aakre.

“Higher yields are better than lower yields,” he says.

Program yields will be used as part of the calculation to determine Price Loss Coverage (PLC) payments for those crops enrolled in the PLC program.

“It is very simple: A higher yield results in a larger payment,” Aakre says. “It doesn’t change the probability of receiving a payment, but it increases the payment if the national average price falls below the reference price, triggering a PLC payment. There is no reason not to update program yields by individual crop when the 2008 through 2012 average yield on your farm is at least 10 percent higher than your 2013 counter-cyclical yield. The updated yield is 90 percent of the average yield in 2008-2012.”

Reallocating program crop bases is a more difficult decision to make. In fact, it may turn out to be the most important decision with the new farm program, Aakre believes.

Base acres are used in the calculation of payments for PLC as well as the county and farm options with the Agricultural Risk Coverage (ARC) programs. More importantly, payments are determined on base acres exclusively. Planted acres are used only with the ARC-farm option to calculate the payment rate. This rate then is applied to base acres to determine the total payment.

One assumption is that having crop bases be closely aligned with the more current crop mix on the farm unit is preferable. Reallocating bases on the basis of the percentage of covered commodities planted from 2009 through 2012 would accomplish this. For those who view the farm program as a safety net for current farm operations, this may be the preferred choice. However, your crop rotation during the life of this farm bill may change from what was planted in 2009-2012.

In the heart of the Corn Belt, this is not a big issue because that region has had a two-crop rotation for years. However, on the northern and western fringes of the Corn Belt, a wide variety of covered commodities has been grown in the past and likely will continue to be grown in the future. Acreage of corn and soybeans has increased significantly during the past few years in this region, largely due to price leadership by these two commodities. Producers have no assurance that this will continue during the next few years, though.

Because base acres, not planted acres, are used to determine the payments, another way to view this decision is as a separate revenue source, rather than a safety net, Aakre says.

One revenue source is market income from farm production, and another revenue source is potential farm program payments from program crop bases. These are separate decisions that depend on what one’s expectation for crop prices for the next few years may be. While planting the crops with the strongest market price outlook almost always is preferable, having crop bases with the weakest market price outlook may be preferable.

“This will not be an easy decision for many,” Aakre says. “Everyone needs to make his or her base reallocation decision on a farm-by-farm basis. Just because your neighbor is making a certain election doesn’t mean you should do the same.”

Source : ndsu.edu


Trending Video

EVENT PREVIEW: You Can Help Reimagine Plant Breeding at the 2024 NAPB Meeting

Video: EVENT PREVIEW: You Can Help Reimagine Plant Breeding at the 2024 NAPB Meeting

Martin Bohn can’t wait to welcome people to the 2024 meeting of the National Association of Plant Breeders meeting being held in St. Louis, Miss., July 21-25. This year’s meeting, hosted by Bayer Crop Science and the University of Illinois-Urbana-Champaign, promises to be one of the NAPB’s most important yet, evident in its theme Rethink, Reimagine and Revolutionize.

While the main conference will be held at the St. Louis Union Station Hotel, it will feature a tour of the nearby University of Illinois-Urbana-Champaign facilities. Bohn serves not only as co-organizer of the meeting, but as crop sciences professor at the university.

“The conference theme revolves around rethinking, reimagining, and revolutionizing plant breeding. We’ve witnessed significant technological advancements over the past decade, with an abundance of genetic, phenotypic, and environmental data becoming more accessible, alongside the integration of artificial intelligence into data science, opening up new possibilities,” Bohn says.

During the conference, attendees will examine these advancements, reassess the field, and explore how we can adapt to or leverage them. The event will feature three sessions: Reimagining, Rethinking, and Revolutionizing, with speakers delving into each theme. Audience participation is encouraged, with lively Q&A sessions expected.

The climax will be the Revolutionize session, featuring speakers from St. Louis startup companies at the forefront of plant breeding innovation, all hailing from the St. Louis Innovation Hub. It promises to be an exciting showcase of cutting-edge ideas, Bohn says. Ultimately, the conference aims to inspire attendees with the innovative work happening at the University of Illinois and beyond.

Bohn is looking forward to showing off the facilities at the university, where there exists a thriving plant breeding program. Visitors are in for a treat.

“When you’re coming from St. Louis to the university, you might expect to see a lot of corn and soybeans, but there’s much more in store. We’ve put together a diverse program featuring various facets of agricultural innovation,” he says.

“Throughout the day, we’ll showcase national initiatives focused on advanced bioenergy and bioproduct innovation. We’ll also explore autonomous farming, environmental resilience, and soil quality at two different stops.”

You’ll get a peek into the USDA Maize Genetics Cooperation Stock Center, home to crucial genetic stocks for corn breeding, and the USDA Soybean Germplasm Collection. Additionally, the tour will highlight the CornBox, a project by some of Bohn’s colleagues which is their version of a sandbox to test innovations for digital agriculture in a live corn field. Visitors will also see the breeding programs spanning soybeans, corn, small grains, hemp, and more.

“One highlight close to my heart is our organic farming systems breeding program. We’ll also tour our student farm, featuring research on vegetable production systems and how robotics aid in managing insects. And let’s not forget about our local startup companies at the University of Illinois Research Park, showcasing their latest research and products,” Bohn adds.

Visitors will wrap up the day at Riggs Beer Company, known for using locally grown seeds and grains. Their motto, “On our farm, we grow beer,” sets the tone for a relaxed Q&A session with the brewery’s owner and team, accompanied by great food and, of course, some beer.

Of course, organizing a conference like this is no small feat; it’s a monumental task that requires careful coordination and collaboration.

“Initially, I thought it would be as simple as putting together a program and inviting speakers, but it’s far more complex than that. Many moving parts need to come together seamlessly to make it a success,” Bohn says.

The beauty lies in sharing the workload among many shoulders, ensuring that no single organization or individual bears the burden alone. The meeting is being co-hosted by Bayer Crop Science.

“Working together toward a common goal of hosting the best conference possible is a tremendous opportunity to build relationships. I truly believe that the connections we forge with our colleagues and partners at Bayer will endure beyond this event,” Bohn says.

“Working with Bayer has been eye-opening. While we often operate within the confines of academia, collaborating with a company brings a fresh perspective on what matters in the real world. It’s invigorating to explore shared interests and embark on collaborative projects together.”