USDA opens election period for seed cotton program
The Bipartisan Budget Act of 2018 made cotton producers eligible for Title I farm programs by designating seed cotton as a covered commodity. USDA has now opened the signup period for producers who have generic base and who want to participate in the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) program for the 2018 crop. Signup ends on Dec. 7.

Farmer owners with generic base acres and recent planting history of covered commodities have a one-time opportunity to allocate all the generic base acres on their farm. Farms with generic base that were planted or approved as a prevented planted commodity during the 2009-2016 crop years are eligible to allocate generic base acres using one of two options.

Option 1: Allocate generic base acres on a farm to seed cotton base acres equal to the higher of:

80 percent of generic base on the farm — the remaining 20 percent goes to unassigned base for which there will be no payments;

Or the average of planted and prevented planted upland cotton acres on the farm in crop years 2009-2012, not to exceed the total generic base acres on the farm.

Option 2: Allocate generic base in proportion to the 4-year average acreage planted on the farm and prevented from being planted for each covered commodity, including upland cotton, in crop years 2009-2012, to the total acreage planted and considered planted for all covered commodities on the farm.

For farms without planted or considered planted history of covered commodities, including upland cotton, curing the 2009-2016 crop years, all generic base acres will be converted to unassigned base for which no benefits will be available.

If a farm owner fails to allocate generic base by Dec. 7, the generic base will be allocated to seed cotton base under Option 1.

Current farm owners have a one-time opportunity to update the farm’s payment yield for seed cotton with either retaining the Counter-Cyclical payment yield for upland cotton, as listed on the farm record as of Sept.3, 2013, multiplied by 2.4, or update the cotton yield to 90 percent of a simple average of the upland cotton yield per planted acres on the farm for years 2008-2012. The retained or updated yield becomes the PLC yield for the farm, effective for the 2018 crop year, and will only be used in calculating payment rates for the PLC program.

Following the generic base allocation and yield update, the current producer(s) on the farm will have a one-time opportunity to unanimously elect either ARC or PLC for seed cotton base acres resulting from the generic base allocation. Any farm that fails to make a unanimous election will be deemed to have elected PLC for acres allocated on the farm to seed cotton.

Texas A&M University has developed an online tool to help farmers with generic base make the best decisions for their individual farms, available here: www.afpc.tamu.edu/tools/cotton-base.

Dairy Margin Protection Program for 2018 is Proving Valuable to Farmers
According to an article by AFBF Chief Economist John Newton, the Dairy Margin Protection Program (MPP), thanks to improvements passed in the 2018 Omnibus Budget Act, has resulted in $155 million in program payments through the end of May. More than 21,000 dairy farms have enrolled in MPP for 2018, and it is estimated that once final enrollment is tallied, more than 50 percent of licensed diary operations in the U.S. will be participating, covering 131 billion pounds of milk, representing approximately 60 percent of the U.S. milk supply.

Dairy farmers who haven’t yet enrolled in MPP can use USDA’s online decision tool to help them with potential enrollment decisions. https://www.fsa.usda.gov/programs-and-services/farm-bill/farm-safety-net/dairy-programs/mpp-decision-tool/index

Rice
November rice futures failed at $12 last week, and have now taken a dollar off the market in just a few sessions. Rice futures had been relatively stronger than many other markets, but with harvest in full swing in Louisiana and Texas and 86 percent of the Arkansas crop headed, harvest pressure will be a real factor in the market. Trade concerns also loom large over the market. USA Rice estimates that the impact to the U.S. rice industry from all retaliating markets and Mexico, which has opened an annual zero-duty tariff rate quota for all origins, reducing the NAFTA-based preference, to be $210 million annually, out of a three-year average export value of $1.83 billion. US market share for all rice imports had fallen to 68 percent in May, the lowest level since NAFTA began.

Soybeans
November beans have recovered a bit after charting a double bottom just above $8.26, however, after finding resistance at $9.22 ¼, the short-term uptrend has turned mostly sideways. Weekly export inspections were up 30 percent from the year ago total, giving the market a boost. However, China is expected to cut imports by 10 MMT, and Argentina and Brazil are about a month away from planting bigger crops in order to meet demand in markets that have imposed retaliatory tariffs on U.S. soybeans.