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Agriculture Act provides payments for price loss coverage

By Diana Strouse • Aug 26, 2017 at 10:00 AM

The Agricultural Act of 2014 provides for payments for covered commodities through the Price Loss Coverage (PLC) program when the market year average price is below the reference price.

Agricultural Risk Coverage (ARC) program payments are triggered when the actual revenue is below the guarantee established for the program. The Marketing Year Average (MYA) price for wheat, barley and oats was announced June 29, resulting in a PLC payment rate of $1.61 per bushel for 2016 wheat and $0.34 per bushel for 2016 oats.

There is no PLC payment on 2016 barley. For Agriculture Loss Coverage – County (ARC-CO), actual crop revenue is calculated by multiplying the actual average yield for your county times the higher of the MYA price or the national loan rate. For 2016, the following prices have been set – wheat at $3.89 per bushel; barley at $4.96 per bushel; and oats at $2.06 per bushel.

2016 county yields will not be available until this fall. Agriculture Loss coverage–Individual Option (ARC-IC) will utilize the same prices as ARC-CO, however the actual crop revenue cannot be calculated until participating producers report all production for all covered commodities planted on the farm and all MYA prices for all covered commodities planted on the farm are known. Both of these items are necessary to calculate the ARC-IC actual revenue for the farm.

All 2016 ARC and PLC payments cannot be made until after Oct. 1, 2017, or the announcement of the final 2016 MYA price for the applicable covered commodity. For information on release dates for MYA prices, ARC-CO yields and projected and final PLC payment rates, visit www.fsa.usda.gov/arc-plc and click on the “ARC/PLC Program Data” link.

In other news....

Election information: If you are a resident of Greenfield, Lyme, Norwich, Peru, Ridgefield, and Sherman Township in Huron County or Berlin, Florence, Milan or Vermilion Township in Erie County, you will be electing a candidate to represent you on the Huron/Erie County FSA Committee in December. If you are interested in learning more about the election process we will hold an informal meeting at the Norwalk Service Center located at 8 Fair Road in Norwalk, Ohio on August 31 st at 10:00 a.m. At this meeting you will be provided with information on how the election process works, who is eligible to vote, and what the county committee does for you. Anyone may attend this meeting even if this is not your year to elect a representative. If you have any questions feel free to give our office a call.

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Farm loan graduation reminder: FSA Direct Loans are considered a temporary source of credit that is available to producers who do not meet normal underwriting criteria for commercial banks. FSA periodically conducts Direct Loan graduation reviews to determine a borrower’s ability to graduate to commercial credit. If the borrower’s financial condition has improved to a point where they can refinance their debt with commercial credit, they will be asked to obtain other financing and partially or fully pay off their FSA debt. By the end of a producer’s operating cycle, the Agency will send a letter requesting a current balance sheet, actual financial performance and a projected farm budget.

The borrower has 30 days to return the required financial documents. This information will be used to evaluate the borrower’s potential for refinancing to commercial credit. If a borrower meets local underwriting criteria, FSA will send the borrower’s name, loan type, balance sheet and projected cash flow to commercial lenders. The borrower will be notified when loan information is sent to local lenders. If any lenders are interested in refinancing the borrower’s loan, FSA will send the borrower a letter with a list of lenders that are interested in refinancing the loan.

The borrower must contact the lenders and complete an application for commercial credit within 30 calendar days. If a commercial lender rejects the borrower, the borrower must obtain written evidence that specifies the reasons for rejection and submit to their local FSA farm loan office. If a borrower fails to provide the requested financial information or to graduate, FSA will notify the borrower of noncompliance, FSA’s intent to accelerate the loan, and appeal rights.

 

Diana Strouse is the county executive director for the Huron and Erie County Farm Service Agency. For more information, call the agency at 419-668-4113.

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