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Policy

After passing the Agriculture Act of 2014, many producers are concerned about how programs will be implemented. 

“We know that there is a farm bill,” said Vince Smith, professor of economics at Montana State University. “We weren’t quite sure we were ever going to get one.”

The bill, he noted is 930-plus pages long, and an additional 20,000 pages of regulations are likely to be seen after the rules and regulations, as well as the implementation handbooks, are prepared.

“Most of us haven’t read the bill, and most of us never will,” he continued. “We are pretty sure we wouldn’t understand what it means, even if we did. There are so many ambiguities present in the bill.”

“We won’t really know what is in the bill until the implementation rules have been developed and published,” Smith emphasized. “It is only then that we will fully understand the options for farms.”

Missing programs

A handful of programs that have been a part of the Farm Bill are no longer available.

“We know that the $4.9 billion a year of direct payments to farms are gone,” Smith said. “Counter cyclical payments are also gone, but in practice, the new Price Loss Coverage (PLC) program is essentially that program with base yield, base acres and higher prices to trigger payments.”

The Average Crop Revenue Election (ACRE) program, which Smith described as the original shallow loss program from the 2008 Farm Bill, is also gone. 

“The Supplemental Revenue Assistance Payments (SURE) program for crops and the disaster aid program that is tied into a variety of other programs is also gone,” he commented.

The Dairy Margin Program has also replaced the dairy price support program and Milk Income Loss Contract (MILC) programs.

The eliminated options have been replaced by a series of other programs in the Agriculture Act of 2014.

New options

As Smith noted, the new Farm Bill sets up several new options for farmers that are quite complicated, particularly in Title One, the farm subsidy title, and Title 11, which looks at crop insurance.

“The first program to look at is PLC,” he explained. “In that program, payments will be made when they are available on historically determined acres with higher support prices than under countercyclical payments.”

Smith added that price support falls under a significantly higher standard than before. 

Essentially, PLC is very similar to the countercyclical payment program, where payments are triggered when prices fall below a reference level on the national average basis. 

An additional new program, the Supplemental Coverage Option (SCO), serves as the new insurance program.

Agriculture Risk Coverage

“The Agricultural Risk Coverage (ARC) program is also a program in which payments will be made on historically-determined payment acres, again with a different structure of support than has previously existed,” Smith explained.

Under ARC, the previous five years of estimated revenue at the county or farm level is used to establish expected revenue on a per-acre basis.

“If the estimated revenue per acre falls below 86 percent of the established expected revenue, payment is made,” he said. “Payment is capped, as well.”

For both PLC and ARC, payments are notionally capped at $250,000, said Smith, assuming two eligible persons are on each farm.

“It is a little more complicated, but that is a change from what might have been expected a year ago, where payment was a great deal of focus,” he commented. “There are some restrictions on disaster aid payments that can be received, as well.”

Livestock indemnity

Changes have also been made to the livestock indemnity and livestock forage disaster aid programs.

“Most of those disaster programs are funded retroactively for 2012-13,” Smith commented. “Farm Service Agency is moving very quickly on implementing those programs, with implementation rules being developed right now.”

Implementation rules are expected to be completed as soon as March 15, he added.

Making choices

With the new Farm Bill programs, Smith noted that producers must choose between PLC and ARC, with each program offering different benefits. 

“If the farm opts for PLC, it can also use the SCO for individually covered crops,” he said. “Payments will be made on 85 percent of farm production base for each crop, and if they opt for SCO, they have to make an additional choice about coverage.”

“If a farm opts for ARC, it cannot participate in SCO,” Smith said.

Under ARC, producers can choose to utilize county-level or farm-level estimated revenue. However, if they choose to utilize farm-level estimated revenue, only 65 percent of eligible production would be covered.

“There are lots of choices and decisions to be made,” Smith emphasized, “and those decisions will be based very much on what we expect prices to look like.”

Price triggers

Smith said price triggers for Farm Bill payments under the new programs are much higher than in previous bills.

“Under PLC, we have seen increases in the trigger prices,” he commented.

The trigger price increased by 57 percent for corn, 53 percent for wheat and 107 percent for barley.

“These are substantial changes intended to make PLC more attractive and more lucrative than past programs,” Smith said.

Take home message

At the end of the day, with all the changes seen in farm subsidy programs, Smith noted that they have become more complicated.

“The House and Senate Ag Committees have done their best to create lots of work for ag economists,” he joked. “The real question for the farm sector in deciding which new program to use is sorting out what will happen to the prices of major crops over the next five years.”

Smith commented, “There are lots of things to continue to sort out.”

Ag in Uncertain Times will continue to host webinars on the new Farm Bill programs. A March 17 webinar will cover the dairy margin and livestock disaster program. Commodity programs and crop insurance will be covered on March 24. The conservation title, horticulture and beginning farmers will be addressed on March 31, and the nutrition title and food policy will be detailed on April 7.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Laramie –  “As I look back at a Reagan quote, Reagan said, ‘As government expands, liberty contracts.’ I think what we’ve seen over the last eight years is the expansion of the federal government,” said American Farm Bureau Federation (AFBF) Director of Congressional Relations Ryan Yates.

He continued, “When we’re looking at how can we interact with this next Congress and with this next administration, we’re going to be looking for ways to come up with smarter government, not bigger government.”

Yates presented an analysis of the presidential election and future implications for the agricultural industry during the Wyoming Farm Bureau Federation’s 97th annual meeting on Nov. 10-12.

He noted that the AFBF is “hopeful that we will ensure agricultural and rural resource issues will be front and center within the first 100 days of the election cycle.”

Surprises

Against the predictions of pollsters across the nation, Donald Trump won several swing states in the Electoral College.

“Looking at just a week before the election, we saw Hillary Clinton favored to win in Pennsylvania, Wisconsin, North Carolina and Florida. These were states that the pollsters got wrong,” commented Yates.

He noted that while the pollsters were incorrect prior to the election, the data collected about why voters made their voting decisions is useful for determining how the outcome occurred.

“We had a very deeply pessimistic electorate. While we had some very unpopular candidates, the majority of people believed that the country was going in the wrong direction, with only one of three voters thinking that this country was going in the right direction,” Yates continued.

In late October, there was an announcement for ObamaCare, or the Affordable Care Act, that the premiums for next year showed dramatic increases for families that would be enrolling in the exchanges.

“There were several states with over 100 percent increases in those premiums. There was a lot of concern moving into this election cycle concerning the campaign about the Affordable Care Act and the fact that the Act was ultimately not affordable,” said Yates.

He noted that many voters were searching for a change, with it being a top priority over terrorism and the economy.

“Going back to the belief now that the country is going in the wrong direction – people just wanted something different. Donald Trump proved to be that different type of a candidate,” explained Yates.

Demographics

“Looking at who showed up to vote, ultimately this election cycle was about the base,” said Yates.

It was predicted that there would be an increase in certain demographics including women voters, new voters and Latino voters.

“Ultimately, there was an understanding or a thought that we would see big surges in certain demographics that just didn’t occur,” he explained.

Only 10 percent of voters were new voters this election cycle, with the majority of those voting for Hillary Clinton, and other demographics did not see any major changes.

“The female turnout in this election cycle went down from four years about by about one percent, and Latino turnout only managed to go up by one percent,” said Yates.

The silent voters who tipped the election in Trump’s favor were the rural voters.

“In rural and blue collar parts of the country, Donald Trump did very well. I think that was discounted in some of the early models that the polls looked at,” he continued.

When compared to campaigns in the past two cycles, Trump was more successful with minority groups.

“Trump did better with Hispanic voters than we saw in years past,” said Yates.

Regulatory pressure

AFBF anticipates that President-elect Trump will be a conventional Republican in terms of tax policies.

“He’s come out very strongly in favor of rolling back regulatory pressures that we’ve seen in the last eight years under President Obama’s Administration,” said Yates.

Trade and opening new trade agreements is a critical element of the agricultural industry.

“In terms of Donald Trump’s position on the Trans-Pacific Partnership (TPP), the current TPP, for all intents and purposes, is dead to the extent that new negotiations will come forward,” explained Yates. “Likely, things will be slowed significantly on the trade front.”

Other challenges

The Trump Administration has indicated to AFBF that it is understanding of the challenges facing agriculture in terms of farm labor and immigration.

“We hope to work with the Trump Administration on comprehensive immigration reform,” said Yates.

Federal overreach through regulations such as the Clean Water Act and Waters of the U.S. that have caused significant harm to agriculture and natural resource development is a top concern for the western states including Wyoming.

“The Trump campaign has been very positive in terms of our requests for changes on the regulatory front, so we are excited about the opportunities that we’ll have there,” he explained. “He has been very clear that he will appoint pro-agriculture appointees to these key cabinet positions, and we’re going to hold him to it.”

Emilee Gibb is editor of Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

On Dec. 18, the U.S. House of Representatives and Senate both passed the Fiscal Year 2016 Omnibus Appropriations Bill, with votes of 316-113 and 65-33, respectively.

Wyoming Sen. Mike Enzi (R) and Rep. Cynthia Lummis (R) both voted against the bill. Enzi cited the lack of a balance in the budget as his reason for turning the bill down.

Beef trade

With a variety of provisions in the bill, National Cattlemen’s Beef Association (NCBA) President Philip Ellis said the bill requires a more stringent regulatory process for allowing beef imports from regions with a history of animal disease outbreaks.

“America’s cattle producers are strong supporters of trade,” said Ellis, “but we must have strong safeguards in place and do our due-diligence to ensure the health and well-being of our domestic herd is not sacrificed.”

Conservation programs

The National Association of Conservation Districts (NACD) cited that locally-led conservation programs were strongly supported in the bill.

“After weeks of intense debate, I am pleased that lawmakers have finally reached an agreement on a spending bill for the remainder of the fiscal year,” NACD President Lee McDaniel said. “The investment Congress is making in conservation will enable conservation districts and our partners to provide cleaner water, improved soil health and wildlife benefits through locally-led delivery of conservation assistance to landowners.”

While cuts were seen to the Environmental Quality Incentives Program (EQIP), conservation operation funding and state and private forestry funding increased, and other programs retained their funding or saw increases.

Continuation for funding to enroll 10 million acres in the Conservation Stewardship Program was put in place, and an allotment of $271 million was reserved for emergency conservation programs, including the Emergency Watershed Protection Program, the Emergency Conservation Program and the Emergency Forestry Restoration Program.

“We are pleased to see that lawmakers are listening to conservation districts on key programs and initiatives tied to appropriations funding and the federal budget, but there is a lot of work yet to do in conveying the importance of all of these programs,” McDaniel added.

EPA

Also of note in the conservation realm is that funding for the Environmental Protection Agency (EPA) remained stagnant from 2015.

“Specifically, the bill keeps the overzealous EPA in check by continuing to prohibit the agency from requiring livestock producers to obtain Clean Air Act permits or report greenhouse gas emissions on livestock operations,” said NCBA.

However, the agency’s Waters of the U.S. (WOTUS) rule was not addressed in the omnibus package, much to the chagrin of many in the ag industry.

Public lands

Brenda Richards, Public Lands Council president, said the increase in wildfire management funds is critical, as the recent drought and lack of federal forest management has ignited several massive fires this year.

“Wildfires are a significant threat to our forests and rangelands, as well as our homes and lives,” said Richards. “When a fire does break out, however, we need the appropriate resources to put it out.”

Richards continued, “Additionally, we appreciate the continued blocking of the sage grouse listing, which will give producers more flexibility to address prescriptive Resource Management Plans. Livestock grazing is one of the best management tools we have to maintain healthy landscapes, reducing the risk of wildfire and allowing our natural resources to thrive.”

Language in the bill also directs BLM and the U.S. Forest Service to make vacant grazing allotments available to permittees in case of drought and wildfire. The agencies are also directed to address domestic and Bighorn sheep conflicts by completing risk analyses and using relevant, accurate data.

Richards added the bill also continues to block the Secretarial Order 3310, preventing the Department of Interior from designating de facto wilderness areas, which diminishes multiple-use on our nation’s public lands.

  Another area that is critical for producers across a wide range of ag sectors are the tax extenders included in the bill.

Section 179 is permanently extended at $500,000, up from $25,000 previously. Bonus depreciation is set at 50 percent for property acquired from 2015-17 and phases down, with 40 percent in 2018 and 30 percent in 2019.

Additionally, the conservation easement tax credit is made permanent.

“These provisions are vital to providing a stable environment for farmers and ranchers like myself to plan for the future,” said Ellis, a Wyoming rancher. “We have had to rely heavily on last-minute tax extender legislation over the past several years, but making these provisions permanent will allow businesses to invest in equipment and property with the financial certainty required.”

Agriculture groups commented that the bill is very positive for agriculture and the cattle industry, and they urge President Obama to sign the bill without delay.

Looking forward

While the bill is overall positive, there are areas that could be improved.

For example, language related to delisting the gray wolf in Wyoming and the Great Lakes region, action to address wild horses and streamlining of environmental reviews are not seen in the bill.

“We will continue to focus on Endangered Species Act issues, including implementation of the prescriptive sage grouse management plans and delisting of recovered species like the gray wolf, as well as larger reforms to the Act itself,” said Marci Schlup, associate director of the Public Lands Council.

This article was compiled by press releases from the National Cattlemen’s Beef Association, National Association of Conservation Districts and National Sustainable Agriculture Coalition, among others.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Montana State University Economics Professor Vince Smith expects the next Farm Bill to be released in 2019, although it is scheduled for 2018.

“We have not had a farm bill at its scheduled time since 2002,” he noted, adding, “2018 is also an election year for congress, and in general, the House and Senate Agricultural Committees prefer to see bills passed in non-election years for a whole variety of reasons.”

Smith discussed current programs and addressed possible discussion for future farm bill legislation in an April 19 webinar hosted by Ag in Uncertain Times.

He believes that the 2014 Farm Bill continues a 25-year shift in subsidies toward crop insurance and other farm safety net programs. There has been almost a complete shift away from traditional price support subsidy programs at the same time.

Potential risk

“Over the past 15 years, U.S. farm lobbyists, particular USDA administrators and congressional Agriculture Committee members, have increasingly chosen to describe Title I and Title XI programs as risk management and farm safety net programs. While those programs increase farm incomes and reduce participating farm’s risk of going out of business, they do anything but reduce overall risk taken by the farm sector,” he explained.

The programs incentivize risk, he noted, and they transfer the consequence of risk away from the individual farm or ranch and onto the taxpayer.

From 1996 through the current farm bill, traditional payment programs have decreased, conservation spending has increased, and crop insurance programs have increased significantly.

Budget

Addressing expected points of discussion for the upcoming farm bill, Smith said, “Budget will always be an issue, and the baseline will be the initial focus of the discussion. The baseline for the farm bill is close to $100 billion a year, of which the majority is allocated to nutrition programs.”

Despite the Republican push to separate nutrition from the farm bill, Smith does not expect the issue to be a subject of debate for 2018.

“Another issue concerns Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). Those programs were put in place to replace direct payments, which were roughly $5 billion a year. The claim was that the programs would cost roughly $2 billion less,” he remarked.

Current indications suggest that ARC and PLC could cost nearly $1.5 billion more than direct payments, and that figure will likely be a point of concern in discussions regarding the next farm bill.

“ARC and PLC are likely to cost about 90 percent more than what was claimed by the House and Senate Ag Committees prior to the passage of the 2014 Farm Bill. That has not gone unnoticed by interest groups critical of farm spending, some of whom are influential,” he said.

Crop insurance

Although they are sometimes referred to as crop insurance programs, Smith also noted that ARC and PLC programs do not include premiums, and payments are not associated with production.

“Those programs raise World Trade Organization (WTO) issues that are far more severe than those associated with the now defunct direct payments program, which they essentially replaced,” he said.

Smith also noted, “The ARC-PLC choice has been widely viewed as overly complicated by many farmers, and the structure of the program may be revisited.”

Crop insurance continues to be the largest budget item, and interest groups from both the left and right have criticized the Harvest Price Option revenue contract, claiming it to be an expensive waste of money.

“Farmers don’t have that view because it suddenly pays out nicely for them on a net basis, but it has been identified on the left and right as an essentially heavily subsidized call program,” he stated.

The Obama Administration has argued over the last several years that the Harvest Price Option should no longer be subsidized, and it appears that the message is resonating in some areas of congress.

Conservation

“Conservation programs may also be revisited,” Smith predicted.

Commodity prices that remain at current or more moderate levels may encourage farm groups to push for a more expansive Conservation Reserve Program (CRP), and Smith guesses the money could be transferred from the Conservation Stewardship Program (CSP).

“Beyond the farm sector, CSP is being criticized as a subsidy program targeted at states like Iowa,” he commented, adding that the original proposer of the program was a congressman from Iowa. “We could see a reallocation of funds between the CRP and CSP.”

Lastly, Smith mentioned that environmental issues will also be included in farm bill policy discussions progressing toward 2018, as environmentalists and farm groups talk about expansion and production in potentially fragile areas of land.

Natasha Wheeler is editor of the Wyoming Livestock Roundup and can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

In December, producers will no longer be able to legally use medically important antibiotics for growth promotion or feed efficiency under a new law being enforced by the Food and Drug Administration (FDA).

According to Christie Gabel, territory business manager with Zoetis, the Veterinary Feed Directive (VFD) will impact everyone who has livestock.

“Producers should support VFD and the judicious use of antibiotics, so we can continue to use them in livestock production,” she stated.

The goal of VFD is to move all medically important feed grade antibiotics and microbials under veterinary oversight.

“Essentially, this means if we use feed grade antibiotics, we need a prescription from the veterinarian to use those,” she said.

The Centers for Disease Control estimates drug-resistant bacteria cause up to 2 million illnesses in humans every year and up to 23,000 deaths in the U.S. The livestock industry is embracing this law because producers want to make sure they are not creating massive antibiotic-resistant bacteria in humans.

VFD is also a way for the industry to address social media and negative press about animal agriculture from special interest groups that may influence legislation.

VFD origins

This law was first introduced as a bill in Congress in 2007 by Representative Louise Slaughter (D) of New York. It was known as the Preservation of Antibiotics for Medical Treatment Act and sought to ban antibiotics for growth, prevention and control in the use of feed-administered antibiotics in shared classes.

“This bill would have essentially taken away the use of all feed-grade antibiotics,” Gabel said.

Through compromise, the groups came to a consensus and agreed to do away with label indications for antibiotics for growth promotion, she added.

By December 2016, the FDA directive seeks to eliminate use of medically important antibiotics for growth promotion or feed efficiency.

The second stage of the directive, to be completed by January of 2017, will bring the therapeutic use of medically important antibiotics under the oversight of antibiotics.

“VFD will ensure safe food and sustainable, long-term use of anti-microbials for humans and animals,” Gabel said.

Critically important medications, like penicillins, tetracyclines and macrolides, will all be impacted by VFD.

Guidance 209

In April 2012, FDA established Guidance 209, which stated feed grade antibiotics should be limited to judicious use considered necessary for ensuring animal health.

The guidance said it’s not judicious for these feed grade antibiotics to be used for growth promotion or feed efficiency.

A veterinarian must provide oversight when using antibiotics on all types of animals.

“Essentially, we can use feed grade antibiotics for treating sick animals or for controlling a potential outbreak,” Gabel said. “We just can’t use feed grade antibiotics for growth promotion or feed efficiency, which we can all agree may not be the most judicious use of those technologies. If we want to use feed grade antibiotics for treatment, control or prevention, we need to get a script for it,” she added.

Gabel noted that ionophores, like Rumensin and Bovatec, are not included in the VFD, but they will be impacted if they are fed in combination with antibiotics.

Guidance 213

Guidance 213 outlines three steps to make Guidance 209 happen.

First, the guidance notes that FDA will initiate the process to eliminate growth promotion claims.

They will then allow the manufacturer of each drug to apply for prevention or therapeutic claims.

Finally, the process was slated to be finalized in 2013 and scheduled to go into effect in 2016.

On-the-ground impacts

VFD regulations will require veterinarian oversight on feed additives containing medically important antibiotics.

A distributor, which is defined as a person who distributes a medicated feed containing a VFD drug to another distributor or end-user, is required to maintain receipts and distribution records for two years and manufacturer records for one year. The veterinarian is required to keep the original VFD either in hard copy or electronically. The client must also keep a copy of the VFD.

“The VFD is going to force all livestock producers to have a strong, ongoing, positive relationship with their veterinarian,” Gabel said. “The veterinarian is going to need to feel comfortable with everything we’re doing on our operations to write us a prescription to use these products.”

She noted, “We need to prepare, get ahead of the game and be proactive about VFD.”

Once the veterinarian issues a prescription, it is only good for six months. The prescription will also state how many animals the drug can be used for. Producers will need to have a prescription in hand before a distributor can sell or deliver VFD feed.

Gabel said producers need to understand and obtain clearances for the feed products they are using.

“They need to find out what combinations are okay to feed and which ones aren’t,” she said.

Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..