Agricultural Risk Coverage and Price Loss Coverage for the 2021 Crop Year

by: Mary Griffith, Chris Zoller, Hallie Williams, OSU Extension Educators

Enrollment for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs for the 2021 crop year opened in October, with the deadline to enroll and make amendments to program elections on March 15, 2021. This signup is for potential payments for the 2021 crop.

If changes are not made by the March 15th deadline, the election defaults to the programs selected for the 2020 crop year with no penalty. While it is optional to make changes to program elections, producers are required to enroll (sign a contract) each year to be eligible to receive payments. So, even if you do not change your program elections, you will still need to make an appointment at the Farm Service Agency to sign off on enrollment for the 2021 crop year by that March 15th deadline.

Producers have the option to enroll covered commodities in either ARC-County, ARC-Individual, or PLC. Program elections are made on a crop-by-crop basis unless selecting ARC-Individual where all crops under that FSA Farm Number fall under that program. These are the same program options that were available to producers during the 2019 and 2020 crop years. In some cases producers may want to amend program election to better manage the potential risks facing their farms during the 2021 crop year.

As you consider amending your program choices, here are some important reminders:

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Thinking about storing more grain this fall?

Source: Chris Bruynis, OSU Extension

There are several market factors that may have farmers looking to increase their storage for this fall. With lower prices, some farmers will look to store grain and hope prices will improve. With the current basis and price improvement between the harvest period compared to the January/March delivery period of 22 to 40 cents for corn and 16 to 34 cents for soybeans, elevators are sending a message to store grain.

The concern I have is that we will use some facilities that are not typically used for grain storage making aeration challenging at best. With poor air movement, grain going into storage will need to be of better quality, lower foreign material, and probably lower moisture.

Farmers interested in learning some strategies for successful drying and storage of grain, specifically corn and soybeans, are invited to join a Zoom Webinar on Monday August 24, 2020 at 8:00 PM.  Dr. Kenneth Hellevang, Ph.D., PE, Extension Engineer and Professor from North Dakota State University will be the featured speaker. He is one of the leading experts on grain drying, handling and storage.

To join the webinar, go to https://osu.zoom.us/j/7911606448?pwd=L1pQQ0VoODROZG56Q015enNBQkVVUT09 and enter the Password: STORAGE

Also, if you cannot attend the program during the broadcast time, the recording will be available on the Ohio Ag Manager website following the program. The recording will be located at  https://u.osu.edu/ohioagmanager/resources.

If you have questions, fell free to contact Chris Bruynis, bruynis.1@osu.edu or 740-702-3200. If you need assistance logging in on the evening of the program, contact David Marrison at 740-722-6073 or marrison.2@osu.edu.

Summer Climate and Grain Market Outlook Webinar

State Climatology Field Specialist, Aaron Wilson and Ben Brown, Assistant Professor of Professional Practice in Agricultural Risk Management, both with The Ohio State University will give a summer weather and grain market update after the release of the 2020 Acreage and Grain Stocks Reports. Due to the Coronavirus, economic conditions for corn changed rapidly after the March Prospective Plantings Report, with likely changes in acreage for the Eastern Corn-Belt. Weather, as always, during July and August will play a major factor in final yields and production in 2020. Free Registration can be found at go.osu.edu/2020agoutlook

Sign up for USDA-CFAP Direct Support to Begin May 26, 2020

Ben Brown, Peggy Kirk Hall, David Marrison, Dianne Shoemaker and Barry Ward – The Ohio State University

Since the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020 and the announcement of the Coronavirus Food Assistance Program (CFAP) on April 17, 2020, producers in Ohio and across the country have been anxiously awaiting additional details on how the Coronavirus Food Assistance Program (CFAP) will provide financial assistance for losses experienced as a result of lost demand, short-term oversupply and shipping pattern disruptions caused by COVID-19.

The additional details on CFAP eligibility, payment limitations, payment rates, and enrollment timeline arrived on May 19, 2020, when the USDA issued its Final Rule for CFAP.  In this article, we explain the Final Rule in this issue of News from the Farm Office.

Click here to read the complete article

Starting Tuesday, May 26, 2020, producers can contact their local FSA office and begin to sign up for CFAP.  This bulletin serves as the authors’ interpretations of the Final Rule released by USDA, and FSA interpretation may be different.

OSU Extension and Ohio FSA will conduct a webinar in the upcoming days to outline program materials and answer questions. For information about the webinar and additional information on CFAP, please visit farmoffice.osu.edu.

Managing stored grain into summer

Source:  Jason Hartschuh, Elizabeth Hawkins, OSU Extension

If you are storing more grain on farm this spring than usual, you are not alone. Over the last few weeks, we have heard from more producers who are considering holding grain longer into summer months than they normal would. We have also heard a few reports of spoiled grain as producers fill April contracts. Carrying graining into summer has been done for many years successfully but requires much more intensive management than winter grain storage.

Key advice for long term grain storage   

  1. If bins were not cored in early winter core bins now
  2. Verify the moisture content of stored grain is at or below recommended levels
  3. Monitor grain temperature every 3 or 4 weeks throughout storage paying special attention to insect activity and mold
  4. Monitor the roof area for signs of condensation
  5. Cover fans to keep the chimney effect from warming the grain
  6. Provide roof ventilation at two levels above the surface of the grain, one vent should be close to the peak of the bin
  7. Aerate bins on cool mornings every couple weeks as grain at the top of the bin becomes warm

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What Does a Trade Deal Promise for Soybean Exports?

Source: Hubbs, T. “What Does a Trade Deal Promise for Soybean Exports?.” farmdoc daily (9):207, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, November 4, 2019

The proposed Phase 1 trade deal with China continues to move toward a resolution.  An initial announcement of $40-50 billion a year of agricultural exports gradually morphed into a $20 billion arrangement. Subsequently, a scenario popped up from Chinese trade commentators framing increased U.S. agricultural imports as China market demands require.  Stronger soybean prices appear to have priced in much of the recent export activity and leave the question of what if any change in soybean exports may come from the new deal.

USDA projections for Chinese soybean imports in 2019-20 are at 3.12 billion bushels, up 73 million bushels over the previous marketing year estimate.  The ongoing issues with swine fever led to the Chinese hog herd estimates coming in around 40 percent below last year.  Despite the reduced herd, Chinese attempts at rapid herd expansion and alternative feed use for soybeans to meet protein demands keep soybean imports from falling.  China reported soybean imports of 301 million bushels in September, with the vast majority of those coming from Brazil.  In the run-up to this latest round of negotiations, China exempted 10 million metric tons (367.4 million bushels) of U.S. soybean imports from tariffs.  Through October 24, China’s total commitments for U.S. exports sit near 227 million bushels.  Space exists for more buying under the current tariff exemption.  The implementation of a trade deal in November appears set to change the nature of soybean exports over the next year.

 

While the prospect of expanded export totals to China appears promising, the overall increase in soybean export may not be at levels equivalent to Chinese buying.  During the 2018-19 marketing year, the U.S. shipped 489 million bushels of soybeans to China and 1.258 billion bushels to the rest of the world.  Soybean exports to the rest of the world increased 41 percent from the previous marketing year as the U.S. picked up the slack witnessed from large Chinese buying out of South America.  A reversion to higher South American exports to the rest of the world’s major importers seems assured under expanded Chinese buying of U.S. soybeans.  Projections for non-Chinese soybean imports for the world are expected to decrease around 10 million bushels to 2.318 billion bushels for the marketing year.  It seems unlikely China would walk away from the trade relationships built over the last year and a half during the trade war.  Particularly when substantial uncertainty remains about the prospects of a long-term deal.  Significant Chinese buying from non-U.S. sources should continue.

The projection for U.S. soybean exports during the marketing year is 1.775 billion bushels.  This forecast is 7 million bushels higher than last marketing year’s total exports.  Soybean accumulated exports through October 24 equaled 292 million bushels, 21 million bushels above last year’s pace.  As of October 24, 416 million bushels of soybean had been sold for export but not shipped.  The outstanding sales total sits close to 100 million bushels below last year at this time despite increased Chinese buying.  The current unshipped export sales to China totaled 167 million bushels.  In the five marketing years before the onset of the trade war, U.S. exports to China averaged 37.7 percent of China’s total imports.  If the trade deal saw a reversion to that historical average, soybean exports to China this marketing year come in at 1.18 billion bushels.  By factoring in export substitutions related to expanded South American shipments to non-Chinese nations, expansion of U.S. exports by 70 – 100 million bushels above the present 1.775 billion bushel projection seems realistic.  This scenario remains strongly dependent on production levels in the U.S. and South America and the final framework for the trade deal.

World soybean production is set for much lower totals in 2019 due to the reduction in U.S. acreage.  U.S. soybean production is projected at 3.55 billion bushels for the 2019 crop.  The present yield forecast of 46.9 bushels per acre may see a further decline with the November 8 crop production report.  The continued deterioration of the U.S. crop diminishes the potential for massive increases in soybean exports that do not impact soybean crush profitability.  Brazilian production is forecast to be 5.3 percent higher than last year as higher export demand drove an increase in acreage.  Projected harvested acreage in Brazil sits at 91.2 million acres, up from 88.7 million acres last year.  Brazil’s soybean yield in 2018-19 came in at 48.5 bushels per acre.  The yield projection for the current crop is 49.5 bushels per acre.  Dry conditions and a slow start to planting in many areas may decrease the potential for a larger yield.  Argentine soybean production is forecast at 1.947 billion bushels, down a little over four percent from last year’s estimate.  The evolving nature of Argentine politics injects considerable uncertainty into future profitability for farmers in the region.  When considering the potential for the Brazilian crop, the market share of exports remains crucial in determining soybean export potential this marketing year.

Expanded soybean exports under the proposed trade agreement look probable.  The magnitude of this expansion may not be at the levels many hoped for when accounting for changing trade flows associated with South American export potential.  A substantial production shortfall from any of the major producing nations holds the potential for major changes to trade flows over the next year.

Discussion and graphs associated with this article available here:

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