Frontier Farm Credit and Farm Credit Services of America (FCSAmerica) are co-sponsoring a webinar series, Two Economists and a Lender. Our latest installment featured Agriculture Economic Insights (AEI) co-founders David Widmar and Brent Gloy, and Ginger Langemeier, legislative affairs officer. The webinar recording from October 24 is available. Explore upcoming webinars.
After passing a one-year extension in 2023, the new Farm Bill has yet to arrive. In this episode, we reviewed the current state, possible implications for your operations, and how to think strategically about the changes.
The Farm Bill has historically played a significant role in agriculture, with government involvement in farm program payments dating back to the 1930s. These payments have varied greatly over time, often influenced by the state of the farm economy. Recently, there have been substantial government supports, particularly during the COVID-19 pandemic, but overall, the level of payments has decreased compared to the mid-80s to early 2000s.
In this webinar, we divide the Farm Bill into four main categories: ARC/PLC programs, conservation, ad hoc payments, and crop insurance. Crop insurance has become a major component of farm bill spending due to its stability. The ARC/PLC program, designed to provide payments based on revenue losses, initially made significant payments but has seen reduced payouts since 2017. This reduction is partly due to the program’s design, which adjusts guarantees based on farm revenue levels. In contrast, market facilitation program payments and supplemental ad hoc payments have provided substantial support outside the farm bill framework, especially during trade disruptions with China.
Recent changes in the farm bill include mechanisms to increase PLC price loss coverage prices, making the program more attractive. For instance, the price for corn has risen from $3.70 to $4.01 per bushel, with further increases expected. Despite these adjustments, the ARC/PLC program has not consistently delivered payments, leading to reliance on supplemental payments. The farm bill’s future will likely continue to evolve, balancing between structured programs and emergency supports to address the dynamic needs of the agricultural sector.
