A new farm bill
Bryan Doherty 01/31/2014 @ 3:12pm
The much anticipated (and delayed) farm bill finally passed the House this week and is on its way to the Senate, where passage is expectedBy many accounts, this was a monumental task, as it looked just days ago that this would not occurFor many in the agricultural industry, there was a collective sigh of relief that finally something is in place for the next five yearsNow it is a matter of deciphering through over 900 pages of rules and regulations that will govern the agricultural community for the next half decade.
On the surface, it looks like this bill had a lot of compromise and will provide something for everyoneAt the same time, not everyone will be pleasedIt does look like bipartisan support and a vision of the future in agriculture was put front and center for the House to pass the bill by a vote of 251 to 156Now comes the scramble to understand its impact and how it will affect the face of agriculture down to your individual decisionsWe'll take a high-level view of some of the major changes or expectations from the new farm bill, and then address if anything has really changed from a marketing perspectiveThat is, will your future behaviors or decision processes be any different?
The highlights of the new farm bill are the elimination of direct payments, as well as improved crop insurance toolsAnother element is reduced payment limits and tightening eligibility requirements and "streamlined means" testsA permanent livestock disaster assistance program is incorporated as well as dairy policy reform with voluntary livestock margin protection with no government-mandated supply controlsLastly, support for beginning farmers is also includedOn an interesting note, it appears the country-of-origin labeling for livestock will remain unchangedThis did not necessarily sit well with livestock producers.
Once the dust settles and the agricultural industry becomes accustomed to the new bill, it will likely be business as usualIn our mind, business as usual suggests you will still need to implement marketing strategies that are constructive, effective and efficientMarket Scenario Planning, as well as a disciplined implementation and review, will be paramountIt is likely that grain producers will struggle financially if supplies continue to grow over the next two yearsStay vigilant to manage risk and opportunities.
Don't lose sight of the big pictureAs a producer, your job is two-fold: to produce and to marketArm yourself with marketing tools at your disposal and communicate with those who can help you achieve your goalsThe new farm bill is here and adjustments will need to be madeThose who are willing to embrace change should keep informed and make the right decisions to grow their business.
If you have questions or comments, or would like help implementing strategy for the year ahead, please contact Bryan Doherty at 1-800-TOP-FARM ext
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