Will March come in like a lamb and go out like a lion, or vice versa? I guess we’ll just have to wait and see.
A couple things I do know is that we will be springing forward soon (March 13), and that means more daylight in the evenings after I get home from work. And it means that we are just 22 days from it officially being spring.
A program that might interest some farm families in the Ohio Ag-LINK program announced recently by the State Treasurer of Ohio.
The Ohio Agricultural Linked Deposit Program is now accepting applications. This program provides operating loans up to $150,000 at an interest rate up to three percent. The program helps farmers and agribusinesses with upfront operating costs for feed, seed, fertilizer, fuel, and other expenses by providing interest rate reductions on new or existing loans at eligible financial institutions.
Requirements
Loan application requirements for farms and agribusinesses are simple and include:
• Must be organized for profit;
• Must have headquarters and 51% of operations maintained in Ohio;
• Must use the loan exclusively for agricultural purposes; and
• Must agree to comply with all program and financial institution regulations
How it works
Farmers and agribusinesses contact a participating lender who will submit the application. Once submitted, the Treasurer’s office begins the review process.
If all eligibility requirements are met, the application is approved. Upon request from the financial institution, the Treasurer’s office will make a deposit or purchase an investment at a negotiated, below-market rate. The participating financial institution offsets the borrower’s interest rate by the same negotiated rate.
Participating institutions
The Treasurer’s office works closely with several financial institutions across Ohio to provide the Ag Link Deposit Program. To view a list of participating institutions, visit https://tos.ohio.gov/financial-institutions-and-investors/ .
Additional information about the Ag-LINK Deposit Program is available at https://tos.ohio.gov/ag-link/ .
ARC-County
Recently in our Ohio State University Extension Ag Manager newsletter, I found an article by Bruce Clevenger, Extension Educator, ANR, Defiance County, that looks at the ARC-County and the 2022 guarantee revenue.
In the article, Clevenger reminds us that through the USDA, the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs were authorized by the 2014 and 2018 Farm Bills.
If producers are making any changes to their enrollment the election/enrollment must be done by March 15. If changes are not made by March 15, 2022, deadline, the election defaults to the programs selected for the 2021 crop year with no penalty.
Both programs are risk management tools. The ARC-CO (county) program provides income support tied to historical base acres, not current production, of covered commodities. ARC-CO payments are issued when the actual county crop revenue of a covered commodity is less than the ARC-CO guarantee for the covered commodity.
The Farm Service Agency (FSA) publishes county level data online that provides the details used in the ARC-CO calculations. The 2022 Program Year specific data contains the ARC-CO Benchmark Yields and Revenues using county level yields and Market Year Average prices from 2016-2020.
The data is organized by state and county name from Autauga County, Alabama to Weston County, Wyoming.
To access the data, visit the link and make two additional clicks:
• https://www.fsa.usda.gov/programs-and-services/arcplc_program/arcplc-program-data/index
• Click 2022 Program Year Specific Data; and then,
• Click 2022 ARC-County Benchmark Yields and Revenues (Excel format).
Clevenger shares that a 2022 ARC-CO payment is made when the actual 2022 county crop revenue is less than the Guarantee Revenue for the covered commodity. The Guarantee Revenue is 86% of the county Benchmark Revenue, based on the olympic average county yields and olympic average Market Year Average (MYA) price for five prior years.
He makes some valid points by providing us some Q&A to consider:
Q: What is the value of knowing your county’s 2022 Guarantee Revenue?
A: A producer can then contemplate conditions that may occur in national price and their specific county yields that would trigger or not trigger a 2022 payment.
Q: What is the difference between ARC-CO and PLC?
A: ARC-CO is a revenue (price and yield) risk program; PLC is a price risk program.
Q: How much do we know about the 2022 crop yields and 2022 commodity prices to make ARC/PLC decisions?
A: County yields are as (un)predictable as the weather. Even trend yields, retrospectively, have significant past volatility. Market analysis and futures prices can be some indicator of price, but they are based on what the market knows and reacts to today. Risk management is not about predicting the future, it’s about being prepared.
The USDA-FSA programs are offered as risk management choices and not a guaranteed payment program. Crop prices, production systems, and other risk management tools should be considered as producers make the ARC/PLC election/enrollment by March 15.
If you have more questions regarding the USDA-FSA programs, contact Kaitlin Roush, County Executive Director of the Clinton County Farm Service Agency at 937-382-2315.
Tony Nye is the state coordinator for the Ohio State University Extension Small Farm Program and has been an OSU Extension Educator for agriculture and natural resources for over 30 years, currently serving Clinton County and the Miami Valley EERA.
