Agricultural News
Oklahoma State University's Dr. Amy Hagerman Talks Farm Policy and Tools Available to Producers Through Agricultural Safety Net Programs
Tue, 06 Jul 2021 13:27:57 CDT
There are some current farm policy tools available for producers through the agriculture safety net program. Radio Oklahoma Ag Network Farm Director Ron Hays spoke with Dr. Amy Hagerman, Oklahoma State University Assistant Professor of agricultural economics, and she said one available resource is payments for wheat producers for the marketing year that is now ended. Hagerman said this is made through two programs: the Price Loss Coverage program and the Agriculture Risk program.
PLC looks at national price and the risk there. The ARC is local level. It looks at yield or price and how it could affect your operation negatively.
In the last couple of years, we have seen PLC and ARC trigger payments because of market prices, Hagerman said.
2020 was a year where national prices came in under the 550 trigger point, she said. So, I would expect those who signed up for the PLC program to expect a small payment in October, she added.
Though Hagerman does not have the exact figures she concludes a payment will be available, based on the wheat market prices.
Opposite of wheat, Spring planted row crops, which are a ways away from the end of the marketing year, are showing strong prices, Hagerman said.
"This is a good sign for producers and a good sign for the market," Hagerman said, "but it's not the kind of market where these safety net programs are designed to trigger."
Therefore, she expects there to be no payments for the 2020 spring planted row crops like corn and soybeans.
For seed cotton producers, whether or not a payment could occur is still up in the air.
The cotton seed trigger point is .367, and the current projected marketing year price as of May is .344, Hagerman said.
With the marketing year concluding July 31, we will have to wait and see how it evolves before we can predict a payment, she added.
This last week, the United States Department of Agriculture released a report many folks took notice of.
Farmers took note of acreage numbers and responded to prices on certain commodities, all in an effort to figure out what gives the best chance at turning a profit.
Hagerman said when looking at the USDA report that came out June 30 as compared to the March estimate, wheat was up a little bit and corn was up.
When you look at supply and demand signals, especially compared to the last year, we are seeing stocks down, acreage up, and an immediate result in market prices, Hagerman said.
Prices are strong right now, and we are going into this year with strong prices, especially compared to last year.
Despite challenges faced by farmers, including severe drought in some areas, market volatility and uncertainty, and international markets, Hagerman remains optimistic going into this next year.
The strong prices we are currently seeing have to dictate what we think moving forward, Hagerman said.
"Each year we have to look to the future, gaze into our crystal ball and make the decision of whether we really need that yield and price protection through ARC at the local level or if we are more concerned with price and volatility at the national level which PLC covers.
March 15 was the deadline for the 2021 crop year, but October is when the application re-opens and allows looking forward to the 2022 crop year, specifically in terms of crop protection for operations.
To hear Ron Hays' complete conversation with Dr. Hagerman, click or tap below.
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