R Brent Young PhD Agriculture and Business Management Specialist Colorado State University Extension Jeff Tranel Norm Dalsted Jesse Russell Dennis Kaan Your Risk Management Toolbox Public Tools PLC ARCCO ARCIC Crop Insurance ID: 600104
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Slide1
Using the Farm Program Decision Tools
R. Brent Young, Ph.D.Agriculture and Business Management SpecialistColorado State University Extension
Jeff TranelNorm Dalsted
Jesse Russell
Dennis KaanSlide2
Your Risk Management Toolbox
Public Tools: PLC, ARC-CO, ARC-IC, Crop InsurancePrivate Sector Tools (things producers can do on their own):Hedging commoditiesUsing options contacts (commodities & inputs)Forward contracting commoditiesAdvance purchase of inputsCollective Solutions (things producers do with help):
Forward pricing: cooperative or other buyer offers a fixed price contract for a future period and uses futures markets to protect their position.
2Slide3
Title 1 Farm Bill ProcessSlide4
Evaluate your safety net optionsSlide5
Two Online Tools are Available
NCPE
Illinois Program
NAAFP
Texas A&M ProgramSlide6
National Coalition for Producer Education (NCPE)
http://farmbilltoolbox.farmdoc.illinois.edu/arc-plc-decision-steps.htmlSlide7
Opening ScreenSlide8
Step 1 Collect InformationSlide9
Sample FSA LetterSlide10
Reported Commodity Crop History SummarySlide11
Step 2 Keep or Update YieldsSlide12
APAS Online ToolSlide13
Payment Yield Update CalculatorSlide14
Payment Yield Update CalculatorSlide15
Step 3 Retain or Reallocate Base Acres Slide16
Base Acre Reallocation Tool Slide17
Step 4 Compare ARC-CO and PLC Slide18
APAS Online ToolSlide19
APAS Sample Farm Slide20
All Crops Slide21
Prices Slide22
Wheat Slide23
Grain Sorghum Slide24
Corn Slide25
Build Your Own FarmSlide26
Build Your Own FarmSlide27
Step 5 Consider ARC-ICSlide28
All Crops Slide29
Step 6 Consider SCOSlide30
All Crops Slide31
Step 7 Sign-upSlide32
NAAFP Decision Aid
National Association of Agriculture and Policy (NAAFP) has been working on the decision aid for more about 2 years. NAAFP is led by
AFPC at Texas A&MFAPRI at University of Missouri-ColumbiaApplied for and received funding from USDA-FSA to develop a nation-wide decision aid
Available at:
https
:/
/USDA.afpc.tamu.edu
And at:
www.afpc.tamu.eduSlide33
Overview of NAAFP Farm Bill
Decision Aid
Register as a producer or a multi-client user
Email address and password protect your data
Email address allows us to contact user when FSA changes rules and when new price projections are available
Enter data for all of the farm’s FSA Numbers
All Crops and their Practices by Type
Types not critical to FSA but important to RMA for SCO, STAX, and
I
nsurance
D
ecisions
Types of Analyses
Yield update
Base reallocation
ARC-IC, ARC-CO, PLC, SCO
STAX and SCO for cotton
Insurance options (Y, RP, RP-HPE, CAT, None) Slide34
Overview of NAAFP Farm Bill
Decision Aid
Producers’ data are stored
i
n the decision aid
Data accessed by a user name and password
S
ecured behind Texas A&M firewall, along with student grades and records
Producers can enter their data, run for alternative prices as updated by FAPRI monthly
Yield Update
D
ecision
Next analyze the
interaction
between Base
R
eallocation and PLC and ARC-CO Election
Before final election, farmers can re-run the analysis for March price outlook
Run Insurance Analysis annually for next 5 yearsSlide35
Information Needed for the NAAFP Decision Aid
Information available from two primary sources
FSA Reported Commodity Crop History Summary (letter from FSA to producers, August 2014) FSA farm number
Base Acres and CCP Yield for covered crops
Crop Insurance Actual Production Report
Historical yields and planted acres
Ten years of yields preferred but 2008-2012 are essential
Slide36
NAAFP Information Sheet Slide37
First Step Is to RegisterSlide38
Producer vs. Multi Client UserSlide39
Create Client Records & Switch ClientsSlide40Slide41Slide42Slide43
Yield Update AnalyzerSlide44
Verify Yield Data 2008-2012Slide45
Yield Update AnalyzerSlide46
Base Acre Reallocation & PLC/ARC
Decision AidSlide47
Verify Input for
Base, PLC, ARCSlide48
Verify Input for
Base, PLC, ARCSlide49
Mean Prices to AnalyzeSlide50Slide51Slide52
Crop Insurance Interaction with Base Reallocation, PLC, and ARCSlide53
Crops on the Farm Eligible for InsuranceSlide54
User’s Input Information for the CropSlide55
Corn
ExampleSlide56
Top Five Crop Insurance and Farm Policy CombinationsSlide57
Wheat ExampleSlide58
User’s Input Information for the CropSlide59
Wheat ExampleSlide60
Top Five Crop Insurance and Farm Policy CombinationsSlide61
All of the decisions required in the farm bill add to the producer’s ability to tailor the bill to fit their operations – not just add to complicationThere will be plenty of time to gather needed info, analyze options, and make sign-up decisions – no reason to panic
A Few Things to Think AboutSlide62
FSA Announced Sign-Up Timeline
Annual Sign-up
Fix Planted Acres with FSA
Reallocate Bases & Update Yields
Election Between ARC & PLC
August 2014
June
2015
Sept
Oct
Nov
Dec
Jan
Feb
March
April
May
17th
31st
Mid
29th
27th
Dairy Margin Protection Program for 2014 and 2015
2nd
28thSlide63
Your Risk Management Toolbox
Public Tools: PLC, ARC-CO, ARC-IC, Crop InsurancePrivate Sector Tools (things producers can do on their own):Hedging commoditiesUsing options contacts (commodities & inputs)Forward contracting commoditiesAdvance purchase of inputsCollective Solutions (things producers do with help):
Forward pricing: cooperative or other buyer offers a fixed price contract for a future period and uses futures markets to protect their position.
63Slide64
Richardson, J. W. (2014, November). NAAFP Farm Bill decision aid, Farm Bill decision aid training. Meeting conducted by the National Association for Agriculture and Food Policy, Salt Lake City. UT.This presentation can be found at the CSU
ABM Website http://www.coopext.colostate.edu/abm/farmbilltrainings.shtmlReferencesSlide65
QuestionsSlide66
R. Brent Young, Ph.D.Agriculture & Business Management SpecialistPh. 970.522.7207
brent.young@colostate.eduThank you!!!