Using the Farm Program Decision Tools - PowerPoint Presentation

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

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NAAFP Information Sheet Slide37

First Step Is to RegisterSlide38

Producer vs. Multi Client UserSlide39

Create Client Records & Switch ClientsSlide40
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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 AnalyzeSlide50
Slide51
Slide52

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!!!