USDA Opens 2019 Enrollment for Agriculture Risk Coverage and Price Loss Coverage Programs

A news release yesterday from USDA’s Farm Service Agency (FSA) stated that, “Agricultural producers can now enroll in the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, two popular safety net programs, for the 2019 crop year. Interested producers must sign up for either program by March 15, 2020.

“The 2018 Farm Bill reauthorized and made updates to these two [FSA] programs. ARC provides income support payments on historical base acres when actual crop revenue declines below a specified guarantee level. PLC program provides income support payments on historical base acres when the price for a covered commodity falls below its effective reference price.

“‘The ARC and PLC programs, in combination with crop insurance, are the bedrock of the farm safety net for crop farmers and something I hear about frequently on the road,’ said U.S. Secretary of Agriculture Sonny Perdue. ‘This exciting opportunity for enrollment in these programs marks the first time folks will have the opportunity to switch their elections since the 2014 Farm Bill was implemented. I am pleased to add that today’s announcement means our staff met yet another major Farm Bill implementation goal and they are continuing to move full speed ahead.'”

The FSA update added that, “In partnership with USDA, the University of Illinois and Texas A&M University are offering web-based decision tools to assist producers in making informed, educated decisions using crop data specific to their respective farming operations. Tools include:

  • Gardner-farmdoc Payment Calculator, the University of Illinois tool that offers farmers the ability to run payment estimate modeling for their farms and counties for ARC-County and PLC.
  • ARC and PLC Decision Tool, the Texas A&M user friendly tool that allow producers to analyze payment yield updates and expected payments for 2019 and 2020. Producers who have used the tool in the past should see their user name and much of their farm data will already be available in the system.”

“For more information on ARC and PLC, download our program fact sheet or our 2014-2018 farm bills comparison fact sheet. To sign up for the program, visit your FSA county office.”

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RMA Announces Changes to Whole-Farm Revenue Protection Policy for 2020

A news release last week from USDA’s Risk Management Agency (RMA) stated that, “[RMA] has made several updates to the Whole-Farm Revenue Protection (WFRP) policy for the 2020 policy year that expand safety net options and flexibility for agricultural producers. The 2018 Farm Bill triggered updates to WFRP, a popular insurance policy among specialty crop and organic growers.

“‘There has been some confusion about how WFRP interplays with other federal disaster programs and indemnity payments, and we’ve added new provisions to address these concerns,’ said RMA Administrator Martin Barbre. ‘The WFRP policy is an important product for producers of any crop, but particularly for growers of less traditional crops. We’re excited to offer these improvements.’

WFRP allows coverage of all revenue for commodities produced on a farm up to a total insured revenue of $8.5 million. It is popular for specialty crops and organic commodities.”

Last week’s update noted that, “Previously, producers who carried Noninsured Crop Disaster Assistance Program (NAP) and WFRP coverage had to choose which indemnity they would receive in the case of a loss. Beginning with the 2020 policy, producers with NAP and WFRP may receive indemnity payments under both policies. This means, an indemnity paid under NAP will not be counted as revenue-to-count under the WFRP program up to the deductible of the WFRP policy.”

“For 2020, RMA is also adding coverage for hemp producers through WFRP,” the release said; adding that, “To learn more, visit the WFRP Coverage and Frequently Asked Questions pages.”

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Drone Startups Getting a Cold Blast of Reality

Bloomberg writer Jake Pitcher reported today that, “New commercial drone businesses flooded into the market at the start of the decade, flush with venture capital and giddy with visions of unmanned aircraft being used for everything from delivering packages to fertilizing farmland.

“Unmanned aircraft are still seen as a pillar of the future. But for now, all that over-heated enthusiasm is getting a cold blast of reality.

Some of the biggest startups began closing their doors last year after burning through hundreds of millions in venture capital poured into a fledgling industry that, despite forecasts for explosive growth, is taking longer to mature than expected. Dozens of others are getting swept up in a consolidation wave as drone companies search for a profitable niche in a rapidly shifting marketplace.”

The article stated that, “Once well-funded startups are struggling as hordes of self-employed pilots drive down prices, Chinese technology races ahead and non-drone companies across industry pull their unmanned aerial operations in-house. Federal regulation of the aircraft has been slow to catch up, and is holding back many businesses from expanding.”

Mr. Pitcher noted that, “But while some startups are testing investor patience, others are seeing an opportunity for growth. At least 67 drone startups have been sold since their inception, according to Crunchbase, which collects data on private companies. Buyers range from rival drone operators to companies in other industries, such as Verizon Communications Inc.”

The Bloomberg added that, “At least 25 drone startups have shut their doors this decade, with the largest burning through a total of $183 million in funding, according to Crunchbase’s online reports.

“‘The venture capitalists are less enthused now,’ said Dan Burton, CEO of Dronebase, a drone pilot network that’s held on through the turmoil.”

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Hemp Crop Insurance Coverage Available for 2020

An update this week from USDA’s Risk Management Agency (RMA) stated that, “Certain industrial hemp growers will be able to obtain insurance coverage under the Whole-Farm Revenue Protection (WFRP) program for crop year 2020. [RMA] today announced coverage for hemp grown for fiber, flower or seeds, which will be available to producers who are in areas covered by USDA-approved hemp plans or who are part of approved state or university research pilot programs.

“‘Numerous producers are anxious for a way to protect their hemp crops from natural disasters,’ said RMA Administrator Martin Barbre. ‘The WFRP policy will provide a safety net for them. We expect to be able to offer additional hemp coverage options as USDA continues implementing the 2018 Farm Bill.’

Producers can obtain WFRP coverage for hemp now if they are part of a Section 7606 state or university research pilot as authorized by the 2014 Farm Bill. Other producers cannot obtain coverage until a USDA-approved plan is in place.”

The RMA update added that, “For more information on the Hemp Production Program, visit the [USDA’s Agricultural Marketing Service] Hemp Production webpage and these questions and answers.

“For more information on WFRP coverage, visit the Hemp and Farm Bill Programs webpage on farmers.gov. RMA will publish a bulletin with additional information for approved insurance providers on Aug. 30.”

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The Risky Mortgage is Making a Comeback

Wall Street Journal writer Ben Eisen reported last week that, “The risky mortgage is making a comeback.

“More than a decade after home loans triggered the worst financial crisis in a generation, the strict lending requirements put in place during its aftermath are starting to erode. Home buyers with low credit scores or high debt levels as well as those lacking traditional employment are finding it easier to get credit.

The loans have been rebranded. Largely gone are the monikers subprime and Alt-A, a type of mortgage that earned the nickname ‘liar loan’ because so many borrowers faked their income and assets. Now they are called non-qualified, or non-QM, because they don’t comply with postcrisis standards set by the Consumer Financial Protection Bureau for preventing borrowers from getting loans they can’t afford.”

The Journal article pointed out that, “Proponents of unconventional loans argue that mortgages became too hard to get in the aftermath of the crisis and that their proliferation will open the housing market to sound borrowers who had been shut out of it. But some worry that the competition for customers could drive lenders to loosen standards too much.”

Mr. Eisen also explained that, “Right now, unconventional loans are largely being extended by nonbank mortgage lenders. But big banks have found another way in: JPMorgan Chase & Co., Credit Suisse Group AG and Citigroup Inc. have in recent months been arranging mortgage bonds backed by unconventional loans.

“Some $2.5 billion worth of subprime loans, those with FICO credit scores below 690, ended up in mortgage bonds in the first quarter of 2019. That is more than double a year earlier and the highest level since the end of 2007, according to Inside Mortgage Finance. There was $1.9 billion worth of subprime mortgage bonds in the second quarter.”

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Legal Wrangling Over CAFO Protections Continues in Missouri

Katie Bernard reported last week at The Kansas City Star Online that, “A collection of Missouri agriculture groups are calling a lawsuit filed this week to block the implementation of a state law aimed at protecting the interests of industrial farms a ‘frivolous’ and ‘desperate’ attempt to ‘disrupt Missouri Agriculture.’

“The statement was released [August 22nd] and authored by the the Missouri Farm Bureau, the Missouri Cattlemen’s Association, the Missouri Pork Association, and the Missouri Corn Growers Association, many of whom are named in the suit. They were responding to a judge’s order Monday, after the suit was filed, to delay the bill’s implementation.

The groups say the bill protects family farmers from ‘unfounded’ county health ordinances. It would prevent local officials from passing more stringent regulations than the state on large farms.

The article noted that, “The legislation is directed at protecting the interests of industrial farms known as concentrated animal feeding operations [CAFOs], which can produce beef, pork, poultry, dairy and eggs more efficiently than traditional farms can but also stoke concerns about air and water pollution.”

At least 20 counties have imposed additional regulations and fees on animal feeding operations through health ordinances, according to data from the University of Missouri Extension. Another nine counties and townships enacted zoning regulations,” the article said.

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Bipartisan Family Farmer Relief Act Signed Into Law – Expands the Debt that can be Covered Under Chapter 12

A news release this week from Representative Antonio Delgado (D., N.Y.) stated that, “[Rep.  Delgado’s] bill to aid family farmers during downturns in the agriculture economy was signed into law by President Trump. H.R. 2336, The Family Farmer Relief Act, eases the process of reorganizing debt through Chapter 12 bankruptcy rules, a tool created specifically to help family farmers during tough economic times. Delgado introduced the legislation in April with support from House Judiciary Committee Ranking Member Jim Sensenbrenner (R-Wisc.), House Agriculture Committee Chairman Collin Peterson (D-Minn.), and Reps. TJ Cox (D-Calif.), Kelly Armstrong (R-N.D.) and Dusty Johnson (R-S.D.). This legislation passed the House on July 26, the Senate on August 2, and was signed into law today, August 23, 2019.

“‘Today is a victory for our small and mid-size farmers who now have the flexibility to reorganize their debt and continue operations in what continues to be a challenging time for agriculture. In this era of bitter partisanship, I was proud to lead my colleagues on both sides of the aisle to pass a bipartisan, commonsense bill to help small farmers in New York’s 19th Congressional District during this down farm economy. Today, the President signed the Family Farmer Relief Act into law—following bipartisan support in both the House and Senate.’ Delgado continued, ‘I thank my bipartisan, bicameral partners for their work to move this legislation through the House and Senate and to bring this urgent relief to our farmers. While the Family Farmer Relief Act is an important first step—our work is not done. I will continue to fight for small and mid-size farmers across our region during this downturn in the farm economy.'”

The release added that, “The Family Farmer Relief Act was introduced with a Senate companion led by Senators Chuck Grassley (R-IA), Amy Klobuchar (D-MN), Ron Johnson (R-WI), Patrick Leahy (D-VT), Thom Tillis (R-NC), Doug Jones (D-AL), Joni Ernst (R-IA) and Tina Smith (D-MN). The bill addresses an outdated debt cap of that limits eligibility for Chapter 12 bankruptcy relief and has essentially rendered the tool inaccessible to farmers today. Delgado’s bill expands the debt that can be covered under Chapter 12 from $3,237,000 to $10,000,000. The changes reflect the increase in land values, as well as the growth over time in the average size of U.S. farming operations and are meant to provide farmers additional options to  keep their doors open during downturns in the farm economy. The legislation is endorsed by the American Farm Bureau, National Farmers Union, National Corn Growers Association, National Milk Producers Federation, the National Pork Producers Council, and the American Bankruptcy Institute.”

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Sales of Previously Owned U.S. Homes Picked up in July

Wall Street Journal writers Will Parker and Harriet Torry reported this week that, “Sales of previously owned U.S. homes picked up in July, a sign that lower mortgage rates may be finally starting to drive sales after a weak spring selling season.

July marked the first year-over-year uptick in 17 months and economists have been somewhat puzzled why the lowest mortgage rates in nearly 50 years, strong employment and wages edging higher have failed to spark more home buying. The July activity was one of the few signs that these forces may be starting to translate into more sales.

Existing-home sales rose 2.5% in July from the previous month to a seasonally adjusted annual rate of 5.42 million, the National Association of Realtors said Wednesday. Economists surveyed by The Wall Street Journal had expected sales to rise 2.3% last month.”

The Journal writers noted that, “A shortage of homes means home prices remain high. The median sales price for an existing home in July was $280,800, up 4.3% from a year earlier. In some large markets, however, the median price of lower-end homes has appreciated by more than 100% since 2012, according to NAR, further limiting the pool of eligible buyers.”

“Buyers have also worried about the effects of the U.S. trade dispute with China, and concerns of slower economic growth has been fueled in recent weeks by some indicators, such a bond yields, that now suggest the possibility of a recession,” the Journal article said.

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As Dicamba Injury Complaints Rise, States’ Communication With EPA Declines

DTN writer Emily Unglesbee reported earlier this week that, “Once again, most major soybean states are dealing with a deluge of dicamba injury allegations this summer, with two states already reporting a record level of complaints.

But, unlike last year, the EPA’s Office of Pesticide Programs is not getting routine updates from state regulators on these injury reports. Last year, representatives from the federal agency participated in weekly conference calls with state pesticide regulators on dicamba injury complaints and investigative findings throughout the summer and fall. EPA officials also visited multiple states to tour dicamba injury and hold public forums on the topic.

“This year, this regular communication and canvassing has dried up.”

The DTN article noted that, “‘We haven’t been asked to provide any information to U.S. EPA headquarters,’ said Doug Owens, chief of the Bureau of Environmental Programs at the Illinois Department of Agriculture, which has fielded more than 450 alleged dicamba injury reports, up nearly 40% from last year and a record for the state. ‘I know last year, we reported to them every week with weekly conference calls. We’re not participating in that this year, and no information has been requested.'”

Ms. Unglesbee indicated that, “In Illinois, dicamba injury complaints soared later than usual in the season, from mid-July into August.

“Earlier this summer, the Illinois Department of Agriculture extended the state’s June 30-cutoff date for dicamba applications to July 15 to help growers control weeds in late, June-planted soybean fields. As a result, applicators were spraying dicamba later than normal, during the hottest, most humid days of the summer, Owens noted.

“‘Of the 652 pesticide misuse complaints we’ve received, 456 are alleged dicamba, and we’ve gotten three-quarters of those within the last three to four weeks,‘ Owens said. ‘I think most of the dicamba went on between July 1 and July 15 — and so that’s about two to three weeks out when people started seeing the damage and then making the decision to report it.'”

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Farm Service Agency Expands Payment Options

A news release yesterday from USDA’s Farm Service Agency (FSA) stated that, “[FSA] is expanding its payment options to now accept debit cards and Automated Clearing House (ACH) debit. These paperless payment options enable FSA customers to pay farm loan payments, measurement service fees, farm program debt repayments and administrative service fees, as well as to purchase aerial maps.

“‘Our customers have spoken, and we’ve listened,’ said Bill Northey, USDA’s Under Secretary for Farm Production and Conservation. ‘Finding ways to improve customer service and efficiency is important for our farmers, ranchers, producers, and forest landowners who work hard for our nation every day. Now, our customers can make electronic payments instantly by stopping in our offices or calling over the phone.’

“Previously, only cash, check, money orders and wires were accepted. By using debit cards and ACH debit, transactions are securely processed from the customer’s financial institution through Pay.gov, the U.S. Treasury’s online payment hub.”

The FSA update noted that, “While traditional collection methods like cash and paper checks will continue, offering the new alternatives will improve effectiveness and convenience to customers while being more cost effective. In 2017, the average cost to manually process checks, a process that included navigating multiple systems, cost USDA more than $4.6 million. The expanded payment options will cut the time employees take processing payments by 75 percent. “

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