Last Thursday President Trump signed the 807 page 2018 Farm Bill recently negotiated in Congress. This bill will cost $867 billion over the next 5 years. It is important to note that over 80% of this funding is for nutrition programs, which have little to do with production agriculture.
Generally, this bill will have a neutral impact on farmland values and rental trends. Marketing loan rates increase for most crops, corn and soybeans included, but those rates remain far below current market prices. There will be a one-time chance to update yields beginning with the 2020 crops (this is important to maintain support programs at average yield levels that more closely match today’s productivity). Also you can select the ARC or PLC program for 2019 and 2020, and then can choose annually either one for 2021, 2022 and 2023. This flexibility is a nice enhancement allowing landowners and tenants to adjust more often depending on market dynamics.
There are many other tweaks to the current programs that improve the support for farmers and landowners. In addition to improvements in the annual support programs Conservation Reserve Program acres expand back to 27 million from the current 24 million over the term of the bill. The Conservation Stewardship Program funding was cut, but EQIP funding was enhanced. There is some help for livestock producers, primarily dairy.
Finally, the adjusted gross income test remains at $900,000 and the payment limits are $125,000 per person or $250,000 for a married couple. These are consistent with the current rules and therefore a positive outcome.
The new farm bill roll-out will be in the first few months of 2019 and your Halderman farm manager will work with your farm tenant to make sure we look at all the options and make recommendations for selections that are most appropriate for your farm.
If you need help working through these difficult pathways Halderman Can Help. Call your local Halderman Area Representative or me in our main office at 800-424-2324 to talk about your specific needs, your property and your options.