U.S. Rep. Angie Craig brought Collin Peterson, the chairman of the House Agriculture Committee, to a Red Wing farm on Friday, March 15. The focus was to discuss the farm bill that was passed in late 2018 and how it will affect local farmers.
The event was held in a large machinery shed; everything was cleared out but a couple of red tractors used at a backdrop as the two spoke and took questions from those gathered.
The event began with Craig and Peterson giving a brief overview of the farm bill, which is more than 500 pages. Craig and Peterson focused on crops and dairy cows.
Drovers, a magazine about the beef market that was first published in 1873, reported that the bill "reauthorizes and strengthens the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) options through 2023, improves the dairy safety net, continues standing disaster programs, and includes several common-sense improvements to the U.S. farm policy."
The plan also provides assistance to livestock producers through the "Livestock Indemnity Program."
There has been a wave of news stories covering small dairy farmers who were forced to sellout in the last couple of years. Peterson hopes that this bill will stall, and even reverse, the trend of selling small dairy farms.
"If you're a young guy, and you want a dairy farm, this is the time to do it," Peterson told the crowd.
The new bill allows farmers to ensure up to 220 cows. Farmers can register for this insurance program that will pay them if the market does not pay adequately. It's a safety net in tough times, Peterson explained. He hopes that no one has to use the plan.
A forecast of the 2019 USDA dairy margin coverage was given out at the meeting. If a dairy farmer registered 220 cows, the total premium cost will be $7,500. Meanwhile, the total Dairy Margin Coverage is forecasted to be $27,852 in 2019 (this assumes that the farmer is covered at the highest level, which is $9.50 coverage level for 15 cents/cwt). Dairy farmers would thus receive a net benefit of $20,352 in 2019.
The premium cost and DMC payment will vary based on the number of cows registered, the coverage level selected and if the coverage is renewed once a year or once every five years. Farmers can receive a 25 percent discount for choosing to register for five years instead of one.
"If the Senate would have listened to me, we would have had this a year ago," Peterson said. According to the 2018 reported margins provided to those in attendance, the total premium cost would have been $7,500 (or $5,625 with a five-year discount) last year and the DMC would have paid dairy farmers (with the same conditions as listed for 2019) $98,352.46.
Commonly grown crops will also be covered in the farm bill, though the reference price will vary based on the type of crop. According to the Congressional Research Service, covered crops are:
• Grain sorghum
• Pulse crops (dry peas, lentils, large and small chickpeas)
• And a variety of oil seeds.
While the plan does insure crops, Peterson explained that it will be harder for new farmers to start out in the crop industry compared to dairy. He explained that growing crops is expensive because it requires land and machinery. If an aspiring farmer does not have family from whom they can buy a farm, the cost is especially high. Peterson suggested that aspiring crop farmers start small. He has found that people who grow crops for a niche market tend to do better than those starting off with corn, wheat, oats, etc.
To help keep small farms alive, the bill includes a tax cut for retiring farmers who sell their farm to a young farmer who will continue farming, the two congressional representatives said.