AgDM newsletter article, May 2002

2002 Farm Bill Offers Opportunity to Update Acres and Yields

by William Edwards, extension economist, 515-294-6161, wedwards@iastate.edu

The 2002 Farm Security and Rural Investment Act (FSRIA) extends some of the payment provisions related to feed grain and oilseed production, and adds some new provisions. The bill provides for three different types of payments:

The crops that are covered by the bill include corn, soybeans, oats, wheat, grain sorghum, barley, and other small grains. Hay and forages are not covered.

Decisions

There are three basic decisions to make regarding the new commodity programs. These decisions are made separately for each tract with a different Farm Service Agency identification.
1. You can keep your current program base acres, or update your base acres to reflect 1998-2001 cropping patterns.
2. If you do not update base acres, a soybean base will be created. You can then shift some base acres from other program crops into your soybean base.
3. If you do update base acres, you can keep your old program yields based on 1981-1985 levels, or you can update yields based on 1998-2001 levels.

The methods used to determine each type of payment are summarized in the table below. For more details on program acres, yields and payments refer to Decision File Commodity Programs for Crops.

Summary of Payment Acres and Yields
Payment Payment Rate per bu. Payment Acres Payment Yield
Loan deficiency Co. loan rate posted co. price Actual harvested Actual harvested
Direct Fixed rate 85% of old or new base Old program yield
Counter cyclical Target price - higher of loan rate or market price - direct rate 85% of old or new base Old or new program yield

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