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Farmers Face Multiple Trips to the FSA Offices This Year
DES MOINES, Iowa -- Typical Iowa farmers will make five to six trips vs. two (normally) to their county’s Farm Service Agency office this year.
Between now and next spring, farmers are urged to plan for possibly busy county FSA vists.
Among other reasons, the following is a list of trips that farmers will make to the governmental offices to enroll in the 2018 Farm Bill and the Market Facilitation Program.
- Certify acres.
- Sign up for the MFP payment.
- Sign up to take grain under loan.
- Deliver sealed grain receipts to get grain under loan.
- Enroll in the Price Loss Coverage (PLC) and Agriculture Risk Coverage with County Option (ARC-CO) crop insurance payment programs.
- Record the PLC yield update, an option offered in the new Farm Bill.
At a recent farmland owners meeting, Steve Johnson, Iowa State University Extension field specialist, told the crowd that cash-flow shortages will keep farmers relying on government help.
“Do you see a little bit of a traffic jam at the FSA office? Farmers are going to be more dependent on the government programs than they ever anticipated,” he says.
This week, Hobbyfarmer, a contributor on the Agriculture.com talk forum, says there are even more reasons to visit the FSA offices.
“There is a visit to the NRCS division to apply for cover crop cost share and then the one later to submit seed receipts for payment. Plus, if you live in a county that doesn’t have an NRCS office, as I do, and you rent farms, you may get to make trips to several different counties to get all of them signed up,” the southern Iowa farmer posted.
Hobbyfarmer adds, “Got a call literally 10 minutes ago from an FSA employee. He forgot to have me sign some MFP papers. They want me to have to drive 42 miles each way to finish it up, so they can pay me, maybe, sometime in next two weeks.”
Rickgthf, a contributor on Agriculture.com talk forum, says he agrees that more trips to the FSA offices are happening.
“Usually, I make two trips per year – one in late winter and another after planting. But with this MFP thing, there was an extra one in late fall and another one yesterday,” Rickgthf says.
Rickgthf adds, “I had all my business for the different counties consolidated to one office, so there’s no running around to different counties at all.”
USDA’s Farm Service Agency Administrator Richard Fordyce tells Agriculture.com that enrollment periods have been extended to curb some of the traffic.
“We understand that there is a lot of program activity ongoing in the local Farm Service Agency offices, especially with implementation of the 2018 Farm Bill and the Market Facilitation Program. To accommodate producers, FSA has set lengthy enrollment periods that will allow producers to maximize their office visits by taking care of multiple actions during their appointment,” says Fordyce.
For the Market Facilitation Program, producers can download the application at farmers.gov/manage/mfp and submit the form to their local FSA office by fax, mail, email, or by dropping it off in person.
“We have a dedicated and trained staff in our FSA offices across the county. We have made considerable efforts to ensure our FSA staff members are fully trained and ready to provide excellent customer service to our producers,” Fordyce says.
Producers are encouraged to make appointments with their local FSA office to allow staff time to prepare before the appointment, Fordyce says.
“The number of appointments required will depend on the needs of each producer as well as their schedule,” the FSA official stated.
Because of low commodities prices and cash-flow constraints, Johnson sees a lot of interest in the government’s Marketing Assistance Loan (MLA) program in 2019/2020.
The national loan rate on corn is going up 25¢ per bushel and $1.20 per bushel on soybeans.
“If there is anything in the new Farm Bill that farmers can react to, it’s the fact that they can go to their county FSA office and take their grain under loan,” Johnson says.
Because of the rate increases, the same number of bushels that they can take under loan vs. a year ago is going to create a larger loan amount.
Beware: This may cause deception among some farmers that this higher loan rate is a great marketing tool, Johnson says.
“A loan is not a great marketing tool,” Johnson says. “It’s just access to cheaper interest money. Under the terms, it’s a nine-month, nonrecourse loan. Farmers will probably use the money to pay off other higher interest loans that they have on their books.”
The reason for the extra visit to the FSA office, with this loan issue, revolves around the fact that farmers can’t take grain under loan until they have sealed it. “Somebody has to come out to the farm to measure the grain bins, and farmers need a warehouse receipt. Farmers won’t do that until they are done harvesting and a bin can be measured,” Johnson says.
Crop insurance indemnity payments will come. In fact, they are already here for acres where prevented-planting claims were filed.
Earlier this month, the USDA reported that U.S. farmers were not able to plant crops on more than 19.4 million acres in 2019. This marks the most prevented-plant acres reported since FSA began releasing the report in 2007 and 17.49 million acres more than reported at this time last year.
“Of those prevented-plant acres, more than 73% were in 12 Midwestern states, where heavy rainfall and flooding this year have prevented many producers from planting mostly corn, soybeans, and wheat,” according to the USDA.
“There will be a lot of indemnity claims on soybeans,” Johnson says. “Because farmers are guaranteed $9.54 per bushel, the crop insurance spring price. So, farmers don’t have to have a lot of yield loss to trigger a revenue claim. But they do have to finish their harvest and provide production evidence to their crop insurance agent,” Johnson says.
If farmers don’t harvest early enough, they won’t have the money from crop insurance insurance proceeds. So, cash flow needs for September and October could get backed up into December and January, Johnson says.
Fall Grain Marketing Plan
Farmers are being urged to market enough bushels between now and November 1 to get cash flow to work.
“Otherwise, farmers will be totally dependent upon MFP payments, crop insurance claims, and using the government loan program for bushels that are not priced,” he says.
Unless farmers had a preharvest grain marketing plan and bushels to sell, they may have to sell corn to free up bin space for unpriced soybeans. Again, this stems from a shortage of cash flow and lack of soybean profitability.
“Perhaps farmers don’t have enough bin space for their corn, and they will be forced to store soybeans in commercial storage. That corn basis will be attractive through most of harvest, however that local basis for soybeans could be $1 to $1.50 under Chicago November soybean futures. Farmers might want to find on-farm storage to stash unpriced soybeans at harvest,” Johnson says.
If farmers sold corn on the late-spring/summer rally, moving that corn at harvest or out of the bin makes more sense, Johnson says.
Johnson adds, “Because of the record soybean ending stocks and lack of pricing opportunities, there will be a lot of bushels in storage even before harvest starts. With carry in the soybean market, farmers, hopefully, will be able to get a better price later as basis improves.”
If farmers can store soybeans until November/December, that crop could be sold to a processor with a much better basis opportunity.