The Benefits of Having a Land Manager 

Meeting with UFARM Land Manager

You’ve made the decision to engage the help of a Land Management Company to aid you in your farm ownership needs. What happens next?

Fortunately, while the decision to turn to a land manager can be initially difficult, it is good to know that the ultimate goal of a land manager coincides with your own goals, with the overarching purpose of making your land as profitable as possible.

Owning a farm or ranch is an investment that comes with a lot of responsibilities, and can become overwhelming to even seasoned owners. This is especially true in the cases of non-farm owners, who may find themselves in the position after inheriting farm or ranch land from their deceased parents.

For the absentee or non-farm owner, spending large amounts of time arranging leases, supervising tenants, and managing farm property is simply not feasible, and many feel out of their depth as they struggle to make all the decisions that need to be made.

It is for these reasons that landowners across the state have turned to United Farm and Ranch Management (UFARM) to help them oversee and implement a management plan for their land for over 80 years.

The experienced land managers at UFARM begin by preparing a detailed inventory of all assets involved, following a thorough check-in process to itemize specific details of your property, including FSA aerial photos, NRCS soil maps, previous crop history, and a full list of buildings and structures on the property.

Then, insurance plans and options are reviewed to determine if the site has adequate coverage and the best rates. Along with insurance, property tax valuations are reviewed and compared with other properties to ensure that assessments are fair.

At this point, your UFARM land manager prepares a report, detailing his recommendations for your land’s best use and outlining ways to meet your ownership and investment goals.

Your land manager also endeavors to identify any potential problems that may exist, and make recommendations for remedying those problems through various improvements.

You may rely on UFARM to:

  • Make recommendations regarding lease options
  • Locate the best qualified operating personnel
  • Negotiate lease agreements
  • Manage and maintain homes, buildings, and other improvements
  • Develop a comprehensive operating plan covering crop or grassland rotations, tillage practices, chemical applications, etc., which are beneficial for the long-term value of the property
  • Supervise crop programs and conservation measures
  • Manage crop and livestock sales
  • Advise and oversee capital improvements
  • Facilitate participation in and compliance with government programs

While there are many more day-to-day tasks than just those listed, UFARM strives to do whatever needs to be done to work on your behalf and to make your operation sustainable and income-producing.

UFARM land managers pride themselves on keeping you up-to-date and informed about any decisions that need to be made, and to make sure those decisions have your approval. We always make sure to keep our level of involvement at your sole discretion.

An area where a land manager can be especially helpful is when arranging tenant leases—especially true when family is involved. In a perfect world, everyone would rely on a handshake agreement. However, it is best business practice to have a written lease prepared by a neutral third party to ensure both parties involved are satisfied and clear on the lease terms. UFARM land managers can prepare a number of different types of leases, and locate the best operator for the job.

Perhaps most importantly, however, is UFARM’s attention to the details that make such dramatic differences in profitability. We strive to keep up-to-date on the latest advances in marketing, science, government programs, technology, and equipment in order to help your farm continually improve.

Through frequent visits to your property, UFARM land managers provide you with timely reports that outline the status of your operation. We also are happy to take care of bills that need to be paid, and carefully review invoices for accuracy beforehand. Transaction journals are sent quarterly, itemizing farm income and expense in a clear, understandable way.

Most importantly, you can trust a UFARM land manager to always keep your goals in mind and your best interests at heart.  We are proud of our 85 year track record, and are eager to serve our clients for many more years to come. Please don’t hesitate to contact us at any time with your questions or concerns—we are happy to be of service to you.

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Harvest Time Busy for Land Managers as well as Farmers


Randy in field-cropped

Farmers across the Midwest are in the thick of harvest activity, and the weather has been favorable enough in Nebraska over the last week for producers to make good progress in the fields. It’s a busy time of year, and no exception for land managers, who are also working harvest hours for their clients. We checked in with one of our own land managers here at UFARM for an update on his harvest activities:

“I’ve been out in the country doing farm visits to see how harvest is progressing. While doing the visits, I’m making sure that the grain is getting to the right elevators if we have grain contracted, checking on the moisture content of the grain, and also getting a feel for what the expected yields might be on that farm.”

Strong winds swept through the state Sunday evening and all day Monday, when northeast parts of the state were in a red flag wind warning. Producers and farm managers were on the lookout for green snap on their corn as a result of the high sustained winds and the few very strong gusts. Any damage sustained may be turned into insurance, if necessary.

UFARM land managers are also undertaking much of the paperwork required for various farm programs, as well as the more basic accounting that must take place at the end of the growing season.

“In my area there are wheat acres that are being drilled and I’m in the process of getting those acres and plant dates from the tenants for Federal Crop Insurance reporting. There are always invoices that are being sent to the offices to finish out the expenses that were incurred during the growing season. Those need to be approved and paid. [Over the last month,] we finished up enrolling our farms in the most recent farm programs (ARC/PLC). We’re currently in the process of getting AGI’s (adjusted gross incomes) forms from the owners that have a share of any government payments that are to be paid.”

For many producers, enlisting the help of a land manager to take on these types of tasks provides peace of mind and takes away some of the workload, especially during busy times of year when they are needed in the field. Other landowners, who may rent out their ground, might have other full time jobs and simply don’t have the time to dedicate to these extra duties. Farm managers step in at this point to lend a hand.

Farm managers also help landowners look ahead to the coming growing season.

“As the crops get harvested and sales of the grains come into our offices we will be budgeting for the next calendar year to cover the input costs that will be needed for that year. For some owners the balance of the funds will be disbursed this fall and for some it will be in the spring.”

UFARM land managers are also dedicated to staying sharp and up-to-date with the latest educational opportunities available to them. They are ready to help clients interested in buying and selling land as well.

“This morning I just finished doing continuing education that is required by the Nebraska Real Estate Commission. The Commission requires licensee’s to have at least 18 hours of continuing education every two years.”

At UFARM, we strive to do our best for your farming operation. If you’re feeling the stress of harvest, and interested in delegating some of your necessary tasks to a qualified person, please don’t hesitate to contact UFARM for a free consultation at your convenience.

UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

 

What does a Land Manager do for a Landowner?

Land managers help landowners and tenants

To own farmland is both rewarding and a lot of hard work. The amount of decisions to be made regarding the growing of crops, as well as the marketing of those crops, managing the land and equipment, figuring out fair leasing options, and controlling input costs are too numerous to mention. Increasingly, many landowners are turning to professional land managers to help bear some of these burdens, and to ensure that their farming operations are giving them the best ROI as possible.

For landowners who acquire land as part of an inheritance, or solely as an investment with very little agriculture experience, professional land managers can be the key to making the best of that land investment. Other times, growers who have farmed for decades decide to take advantage of the expertise of a land manager to help them with certain aspects of their farming operations, such as helping them negotiate lease agreements, learning about the latest farm bill programs, giving them an edge with grain marketing, or selling land.

UFARM land managers have the qualifications and education necessary to manage production inputs and make improvements that will maximize your operation’s profits and ensure its sustainability. When you decide to take advantage of a land manager’s aid, they go the extra mile to do whatever needs to be done for your operation and your behalf. The client sets the level of involvement, and the land manager keeps clients up-to-date and informed of any decisions made.

Specifically, UFARM land managers can help with any or all of the following:

  • Make recommendations regarding lease options
  • Locate the best qualified operating personnel
  • Negotiate lease agreements
  • Manage and maintain homes, buildings, and other improvements
  • Develop a comprehensive operating plan covering crop or grassland rotations, tillage practices, chemical applications, etc., which are beneficial for the long-term value of the property
  • Supervise crop programs and conservation measures
  • Manage crop and livestock sales
  • Advise and oversee capital improvements
  • Facilitate participation in and compliance with government programs

A land manager’s role in your operation can be as broad or narrow as you, the landowner, decides. And, when it comes to each of these tasks, UFARM land managers pay close attention to detail. Whether it’s making sure a lease is written out with all possible scenarios considered or keeping up-to-date on the latest crop technology, UFARM land managers are always staying on top of the latest research and practices that affect land ownership.

Enlisting the help of a farm manager may provide a landowner needed peace of mind. UFARM prides itself on excellent record-keeping and accuracy, and our land managers make habits of going through written records with an eagle eye, always making sure that the landowner’s best interests are represented.

Are you considering enlisting the help of a professional land manager and still have questions about how they can help you with your farming operation? Feel free to stop in or call UFARM for a free consultation—we are glad to walk through our services with you.

UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

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Assessing the Damage: Nebraska Winter Wheat

Wheat-Field-small

The May Baskets had been made, delivered and stored for next year, but that didn’t matter to Mother Nature, as a snowstorm blanketed a large portion of the Nebraska Panhandle on May 9th. Most of the wheat-growing regions from the southern Panhandle to South Dakota received anywhere from 6-18 inches of snow, causing some damage to the crop of varying degrees.

The snow presents yet another challenge to wheat growers in the area, some who have already been dealing with winter injury or winter kill, relating to variety, seeding date, and seeding depth. Now, with the May snow, the total impact could be significant, given the 695,000 acres of wheat this year, as reported by the Panhandle Crop Reporting District.

Growers have been busy assessing the type and degree of damage, and are encouraged to spend some time doing so. While the crop may appear to have recovered, closer inspection often displays damage not detectable from the road. UNL Extension Specialists Karen Deboer and Robert Klein reported that 10-40% of the wheat stems in the field had been broken or damaged due to lodging from the heavy, wet snow.

According to Deboer and Klein:  “The many factors influencing freeze injury to wheat — plant growth stage, plant moisture content, and duration of exposure — often make it difficult to predict the extent of injury too quickly. This is complicated further by differences in elevation and topography among wheat fields and between the fields and official weather stations. It is not unusual, for instance, for wheat growers to report markedly lower temperatures than are recorded at the nearest official weather station.”

While wheat can compensate since remaining tillers with viable heads, wheat will not compensate for lost stems if loss is above 25-30 percent. Should growers already have substantial winter kill, it is in their best interest to take great care in determining if the wheat should be brought through to harvest.

After determining the extent of damage, there are a few options for growers. If there is significant damage, the first option is to take the crop to harvest. This is also the least expensive option, and, depending on crop insurance coverage, may not make money, but will keep the producer from losing money. According to Extension Specialists at the Panhandle REC, “The projected price on crop insurance for wheat is $6.41 per bushel, so producers with revenue coverage may have an attractive revenue guarantee, relative to expected actual revenue from both lower yields and lower prices.”

A second option is to use the crop for forage. This could be done either by harvesting it or for grazing, while also providing grazing animals with supplements for bloat prevention.

Another option is to remove the wheat altogether, through tillage or an application of Roundup, and planting it back to proso millet, corn, or sunflower. Extension specialists recommend that growers first review their herbicide program. That way, they could “make sure there would be no plant-back restrictions. [They should also] check crop insurance provisions for fallow eligibility.”

 

Sources consulted: DeBoer, Karen, and Robert Klein. “Assessing Freeze Injury to Wheat.” Cropwatch. University of Nebraska-Lincoln. 12 May 2015. Web. 18 May 2015. Hergert, Gary, et al. “Freeze-Damaged Winter Wheat in Panhandle.” Cropwatch. University of Nebraska-Lincoln. 15 May 2015. Web. 18 May 2015.

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Leasing Basics for Landowners

Leasing FarmlandAside from the day-to-day duties of owning and managing land, one of the more difficult aspects of land ownership deals with leasing farm land. Many landowners have difficulties coming to mutually acceptable agreements, getting those agreements on paper, determining fair rental rates, and determining what type of lease agreement best suits their needs. What are the leasing basics of which landowners should have a firm grasp?

The first is to know and understand how rental rates are set. The end goal is to come to an agreement that is mutually beneficial to both the landowner and tenant. As such, setting a fair rate is important. There are several factors landowners can take into account when determining this rate, among them are the rental rates of the local area, percentage return on investment, survey data showing rental rates, percent of gross income, and many others. Most land managers recommend that landowners estimate the rental rate based on three or four of these factors and then make a decision. Determining a local rental rate is fairly straightforward; ag loan officers from the local bank, ag real estate professionals, and professional land managers are able to supply the going rates for current lease agreements.

Additionally, the National Ag Statistics Service (NASS) releases land value surveys annually for consultation. This, along with determining your desired ROI and percent of gross income, are excellent ways to come to a fair rental price agreement with your renter.

With over half of the agriculture land in Nebraska rented, it’s important for landowners and farmers who lease land to recognize the importance of a well-written lease agreement. Where a handshake was enough in many cases in the past, the nature of farming today is a bit more complicated, and the necessity of having a well-designed legal agreement is paramount. Land managers are well-versed in helping you get that lease down on paper, as well as helping you sort through the necessary particulars prior to it.

Land managers are also able to help you determine if a flexible lease agreement may be the right choice for you and your tenant. The factors that have the greatest effect on rental price are land values and crop yields. As these vary year to year, it can be tricky for owners and the farmers who rent the farmland to agree on a fair rental price. To address this complex problem, area farm management experts increasingly promote flexible land lease agreements in order to reduce risk and optimize profit potential for both parties. A flexible land lease agreement is an agreement in which the rent is not paid until the after the crop is harvested. The final rate is then based upon the actual prices and yields attained in a year, rather than a set rate.

After determining the type of rental agreement come the particulars, such as who pays for grain bin storage and power, how irrigation costs are to be handled, and the like. These vary from farming “neighborhood” to neighborhood. The important thing is that both parties come to an agreement so there is no confusion if/when an issue arises.

There is no definitive right or wrong land rental rate, but taking the above factors into account will accomplish the most important leasing goal: A mutually beneficial and satisfactory agreement for both parties.

Source consulted: Vyhnalek, Allan. “Frequently Asked Questions—Farmland Leases.” University of Nebraska-Lincoln Agricultural Economics. University of Nebraska-Lincoln. Web. 17 Mar. 2015.

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Ways to Manage Your Land for Wildlife

Managing Your Land For WildlifeFarmers and landowners generally focus on crop production, and land management often falls to finding ways to improve the land in order to increase yields and profit margins. Fortunately, many land improvements that build up natural wildlife habitats are also found to be beneficial for improved crop production as well.

Creating places for native wildlife to live and thrive offers many benefits to farmers and landowners. Abundant wildlife populations provide excellent hunting and fishing opportunities. Management practices that improve wildlife habitats can also help improve soil moisture, improve water quality, and prevent soil erosion, all which benefit crop production. Improvements such as windbreaks can reduce home energy costs, as well as fuel and cattle feed costs. Some landowners are able to receive extra income by establishing public or private wildlife preserves on their land as well.

There are simple steps you can take if you’re looking to manage your land for wildlife. The first is to determine your basic objectives. Do you wish to generate income with your improvements? Or provide more hunting ground? Whether you’re looking to achieve major changes, such as re-creating wetlands, or more minor changes, such as field-corner food plots, it’s necessary to have your end-goal clearly delineated so that you can know the best way to move forward.

Secondly, take a close look at your land inventory. What do you have to work with already? Determining the areas that you already have, and where they’re located, is important. For instance, do you have existing wetlands, or lots of edges? Wooded areas or streams? Knowing what you have to work with will help you further create prime natural habitats for wildlife on your land.

Finally, make the production decisions that fit well with your goals, what you have already, and your personal qualities. If necessary, see if there are opportunities for financial assistance and seek out technical assistance for advice.

The following are just a few examples of actions that can be taken to improve wildlife habitats on your land:

  • Conservation tillage- Provides food for wildlife, improves soil moisture and reduces tillage costs.
  • Grassed waterways- Provide food and cover for wildlife, as well as reduce erosion.
  • Wetland enhancement and restoration- Provides food and nesting areas for waterfowl and other wildlife, maintains quality groundwater, and reduces flooding by slow absorption and slow release of spring runoff.
  • Field borders- Provide food and cover for wildlife, and prevent snow drifting and soil erosion.
  • Food plots- Food plots such as grains, legumes, and grass provide over-winter feeding areas for wildlife and act as snow fences.
  • Windbreaks, shelterbelts, and living snow fences- Reduces cattle feed costs, soil erosion, and heating expenses, as well as conserve soil moisture.

Whether you’re looking to improve your soil quality, expand your hunting acres, or derive extra income, taking these steps to manage your land for increased wildlife is a great way to carry out your vision.

Feel free to contact a UFARM representative with your questions about wildlife management on your land. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

Sources consulted:  “Managing Your Land for Wildlife.” University of Minnesota Extension. Web. 19 Jan. 2015.

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4 Skills a Professional Farm Manager Must Have in the 21st Century

Key Qualities Land Manager Should HaveA successful farm used to be judged by good yields, well-maintained fields and machinery, and timely planting and harvesting. With the burgeoning land and commodity values that characterized the first decade of the 21st century, coupled with advances in risk management and an often volatile grain market, it is clear that the skills necessary for agriculture success are often the ones that go on behind the scenes. What are the skills that a successful farm manager must possess in 2014 and beyond?

The Purdue University Ag Extension compiled a self-assessment checklist to help farmers and farm managers gauge their efforts on a number of crucial business management fronts. The first area explored deals with production management. Production management is typically described as the hands-on aspect of farm management. Managers who are well-acquainted with the processes of crop production are in a better position to achieve the goal of successful production management: To have a cost of production that is lower than the industry average. With this key aspect in mind, successful farm managers seek to stay on top of the latest technology for their particular operation, know their machinery, and focus on making their farm run efficiently at every stage of production.

The next area is in procurement and selling. Procurement deals with the purchase of needed inputs; selling with the selling and delivery of the product. Smart procurement and selling practices are critical to farm management success, and involve more than simply buying low and selling high. Seeking and getting good marketing advice, where to price products, when and how to deliver, and risks taken to enhance price are all necessary things to take into consideration.

Successful farm managers also need to be mindful of their financial management practices. Financial management involves where funds will be obtained and how they will be used. It is important for farm managers to have a good understanding of the concepts of leverage, interest rates, the rate of return on assets and equity, and the cost of debt and equity capital. Along with this, good financial farm managers also understand and utilize good tax management strategies, as well as the use of insurance to protect against financial losses.

Finally, successful farm managers have a good grasp of the risk management tools available to them. Farming involves a lot of risk; in addition to the price variability of commodities, the farm manager also faces production risks, financial risks, and legal risks as well. To combat them, successful farm managers take advantage of futures price contracts and options, crop insurance, and health, life, and liability insurance. In addition to this, farm managers must have a contingency plan, and be aware of world market trends that are occurring in the industry.

In addition to assessing these skills, it’s also important to re-visit them from time to time, to see if they are being used effectively. If you’re concerned about the proper management of your farm, contact UFARM, and they can help you assess your operation so that you are operating it to its highest potential. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

Source consulted:  Boehlje, Michael, Craig Dobbins, and Alan Miller. “Are Your Farm Business Management Skills Ready for the 21st Century?” Purdue University Dept. of Agriculture Economics. Purdue University Ag Extension. Web. 04 Dec. 2014.

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What Does A Well-Written Farm Lease Really Cover?

LeaseOne of the most overlooked aspects of farming deals with leasing agreements. With over half of the agriculture land in Nebraska rented, it’s important for landowners and farmers who lease land to recognize the importance of a well-written lease agreement. Where a handshake was enough in many cases in the past, the nature of farming today is a bit more complicated, and the necessity of having a well-designed legal agreement is paramount.

A leasing agreement, down on paper, benefits both landowner and tenant. Each party is able to outline their responsibilities, rights, desires, and needs ahead of the growing season, so there are no surprises that could compromise the good nature of the agreement. As anyone who has ever dealt with a difference of opinion could attest, proactively avoiding potential issues ahead of time can save time, money, and a great deal of headache for both parties involved.

What comprises a well-written lease? First, make sure the basics are covered. According to FarmProgress.com, this includes: “[An] accurate legal description of the land to be leased, the identity of the parties and their signatures, length of the lease, kind and amount of rent, time and place of payment, responsibilities of each party, an indemnification clause (whereby tenant agrees to compensate the landlord for any loss resulting from the tenant’s negligence, and vice versa) and any other special provisions the parties agree upon.”

In addition to these basics, it’s often good to recognize some commonly misunderstood landlord rights, so that the leasing relationship runs smoothly, and hopefully for many years. Usually these are addressed by a written lease, so that they do not become issues during the growing season.

One such misunderstanding regards farming practices; a well-written lease will make it clear that the tenant/farmer is in charge of how the land is farmed, unless otherwise agreed upon ahead of time by both parties.

Another issue that can arise is when the landlord can come onto the land; without a written lease, this can only be to make repairs or to collect rent. Should both parties like to amend this, it should be decided upon when the lease is put together.

Sometimes, the landowner decides he/she wants to sell the land before the lease agreement is up. It should be understood that the new buyer is responsible for the existing lease agreement.

Another important concept that written leases address is when a landowner can raise the rent, if so desired. In Nebraska, a landowner cannot raise the rent for the next year after September 1.

Finally, with rifle season just around the corner, it’s good to remember that landowners don’t necessarily have the right to hunt on the land they rent without the tenant’s permission. Addressing this in the written lease may help avid hunters avoid potential headaches the third weekend in November.

It cannot be overstated that good farming relationships start with a well-crafted lease, written down on paper. If you’re looking to update your leasing agreements, contact UFARM for advice on how to accomplish this goal. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

 

Sources consulted:“Five Myths of Landlord Rights.” Cropwatch. University of Nebraska Extension. University of Nebraska-Lincoln. 02 Oct. 2014. Web. 10 Nov. 2014.“Good Reasons for a Written Lease.” Prairie Farmer. Farmprogress.com. 05 Aug. 2011. Web. 10 Nov. 2014.

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Land Managers: Helping Both Landowners and Tenants

Land managers help landowners and tenantsWith volatile grain markets and land values, and with increasing amounts of landowners acquiring land as part of an inheritance, or solely as an investment with very little agriculture experience, many are hiring professional land managers to help them run their farming operations. Even farmers with experience and close ties to the land often turn to land managers to help them negotiate fairly with tenants, or to ask their advice about any number of farming issues—be it the cost of fertilizer or news about the latest farm bill programs.

Despite the overall value that many see in maintaining a relationship with a land manager, there are still pockets of resistance, especially among those who hold the impression that land managers work only for the landowner, and not the tenant who farms the land. Land managers work continually to dispel this myth, and hold their legal fiduciary duty to put their clients’ interests ahead of their own in high regard. This duty applies not only to the landowner, but to the farmer as well.

Resistance to land managers on the part of tenants is something that UFARM managers are familiar with. Their advice to landowners is; if your tenant dislikes the idea of the involvement of a land manager, then you should run, not walk to hire a manager, because something may be amuck. While this may not be the case in every instance, land managers hold their responsibilities to all their clients—be they landowners or tenants—in high regard, and are able to sort out complicated farming situations if the need arises.

Often, this is in helping to negotiate rental agreements between landowners and tenants that are mutually agreeable to each party. In these situations, farm managers are able to act as an impartial third party, and for those who desire it, can keep such relationships at arm’s length. Even in good landlord/tenant relationships, a third party is sought simply to keep the relationship running smoothly, which is often the case when it takes place between family members.

UFARM managers feel like an important liaison with both owners and tenants. Some tenants contact UFARM managers to check fertilizer prices, chemical prices, and new technologies. A qualified land manager holds value for not only the landowner, but can be an important resource for tenants as well.

If you are considering hiring a land manager for your farm, contact UFARM for a free consultation. We are glad to help you determine if our services are right for you. United Farm and Ranch Management (UFARM) is a Nebraska-based company devoted to meeting landowners’ needs. UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!

 

Source consulted: Knutson, Jonathan. “Hiring Expert Help.” Agweek. Agweek.com. 18 Feb. 2013. Web. 03 Nov. 2014.

 

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Latest Farm Bill’s Effects on Landowners

2014 Farm BillThe Agricultural Act of 2014, more familiarly known as the Farm Bill, was finally passed in February, and since then the changes made in the final iteration of the bill are out in the open. Among the most significant changes for farmers and landowners—besides the end to direct payments—are the expanded insurance and revenue protection programs available. In place of DCP and ACRE programs, the new farm bill will offer:

• Price Loss Coverage (PLC), a price protection program that triggers payments when market year average prices fall below target levels, which are called reference prices.

• Agricultural Risk Coverage County (ARC-C), a revenue protection program that triggers payments when the county revenue per acre falls below a benchmark revenue guarantee per acre set for the county.

• Agricultural Risk Coverage Individual (ARC-I), a revenue protection program that triggers payments when there is a revenue-per-acre shortfall on the individual farm that falls below a benchmark revenue guarantee per acre for that farm.

Producers taking advantage of the ARC program will have to choose either the county or farm option. The county option pays up to 85 percent of the base acres, while the farm option is limited to a maximum of 65 percent of base acres.

The PLC option will work much like the previous DCP program. The PLC payment results when the covered commodity’s marketing price falls below the reference price.

While the initial analysis of these new program options seemed a bit more clear-cut last spring, the falling grain prices and bearish markets coupled with the record volume of harvested grains forecasted this fall, the options become a bit muddied. In addition to the current market trend, it’s important for farmers and landowners to understand that whichever program in which they choose to enroll is permanent for the five year span of the bill, and cannot be changed. Therefore, it is critical that they make the best decision based on their specific farm situation.

Landowners also need to be aware that if “push-comes-to-shove” it is really the operator of record for 2014 that will make the decision.  With that in mind, landowners should work with their land tenants to arrive at a decision that both parties are comfortable with.  A professional land manager can provide valuable assistance to landowners when it comes to negotiating the correct programs for their land.If you are changing tenants for 2015, the former tenants have the authority to make the program decisions, when they really have no stake in the 2015 or beyond crops.  This could leave the landowner, or new buyer, of the farm with a program choice they didn’t have input on. The FSA is still determining if there’ll be exceptions made for those types of situations.

Some other specific considerations to be aware of are as follows:

  • Failure to enroll in 2014 places a farmer automatically in the PLC program beginning in 2015 with no payment eligibility for the 2014 crops
  • If choosing either PLC or ARC-C, a farmer may enroll in different programs commodity by commodity. As an example on the same FSA farm, the corn base acreage could be enrolled in PLC while soybeans are enrolled in ARC-C
  • If choosing the ARC-I program all base acres on that FSA farm must be enrolled in the ARC-I program
  • Base acreage can be reallocated to be in the same proportion as the actual planted crops during the 2009 to 2012 crops. This will be an elective as each farm can stay with the current base, or update.
  • Those electing PLC can update their FSA yield base to 90% of that farm’s yields from 2008 through 2012. It is likely that most electing PLC will also want to update their yields.

Undoubtedly, farmers and landowners have even more critical decisions to make with the expended program options available with the new Farm Bill. The pressure is on to have the latest information in order to make the right decision. This program details are still evolving and training for FSA staff is going on as this is written.  More information will come to light in the weeks ahead.

Do you have questions or concerns about the latest Farm Bill’s affect on your land and how the programs will be applied to your property? Contact a UFARM representative, and they’ll be happy to help make you make an informed decision.

Sources consulted:
Clayton, Chris. “Offering Advice on Farm Bill Choices.” The Progressive Farmer. 12 Oct. 2014. Web. 13 Oct. 2014.
Keeney, Roman. “A Perspective on the 2014 Farm Bill.” Purdue University Center for Commercial Agriculture. Purdue University Ag Econ Dept. 2014. Web. 13 Oct. 2014.