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March 22, 2024

Welcome to the March 15, 2024 issue of Cotton News, a service provided by Plains Cotton Growers Inc. for the cotton industry in the Texas High Plains and beyond.

Editor’s Note: The email sent Friday, March 22, included information about the Agricultural Pesticides Waste Collection Event. This event has been postponed. Details to follow – stay tuned.

Key Issues Addressed at House Ag Appropriations Subcommittee Hearing

As reported by Jim Wiesemeyer, ProFarmer

At the House Agriculture Appropriations Subcommittee held a hearing on 2025 budget requests from the U.S. Department of Agriculture (USDA). The subcommittee heard from USDA Secretary Tom Vilsack regarding this request, which is set at $25.1 billion — a $2.2 billion increase from the previous year. Here are some key issues addressed by Vilsack and the subcommittee.

Key Issues

Commodity Credit Corporation

Subcommittee Chair Andy Harris (R-MD) expressed apprehension about the potential misuse of Commodity Credit Corporation (CCC) funds to advance political agendas not authorized by Congress. Harris said he is concerned that the CCC “continues to be treated like a slush fund to advance political priorities not directed by Congress.” He also noted that he has read Vilsack’s comments in news articles over the past few weeks “suggesting that you can use CCC funds to help farm safety net programs outside of the regular farm bill process,” adding he is “perplexed as to how USDA would be able to do this, as establishing reference prices and farm programs is done by Congress, the Legislative branch, not the Executive branch.” He said he hoped his colleagues at the House and Senate Ag Committees can complete a farm bill this year, “but if not, that does not give USDA the green light to start raiding the CCC to de facto set up new programs not authorized by Congress.”

Vilsack told Harris he wants “to make sure that you and I have a meeting of our minds on the utilization of CCC as it relates to the farm bill. I never suggested nor did I ever say that we would be using the CCC outside the scope of farm bill discussions and negotiations. What I did say was, in order for us to have a farm bill, it’s going to be necessary for members of the Ag Committee to be creative how they can use the resources within the CCC at their instruction and direction to be able to provide the relief and assistance they’re looking for to bolster our safety net. That’s what I said, that’s what I meant, and I just want to make sure the record is clear about that.”

Farm Income

Ranking Subcommittee member Sanford Bishop (D-Ga.) noted that in 2022 when net cash farm income reached a record high at over $200 billion, 13% of commercial farms, 50% of intermediate farms and 63% of resident farms had negative farm income. He that Vilsack’s prepared remarks mentioned several programs that help grow markets for American farmers that receive mandatory funding. Bishop asked: “How can we on the Appropriations Committee support and grow the farm economy on the discretionary side of the budget?” Vilsack quickly answered, “Continued support for local and regional food systems. The reason being that when farmers are operating under the normal food system, they get roughly anywhere from $0.15 to $0.20 of the food dollar. When they sell locally directly to their consumer, they get anywhere from $0.50 to $0.75 of the food dollar. So, to the degree to which you can continue to support local and regional food systems and the programs that are already in USDA, supporting our processing initiative, for example. Continuing to support renewable energy production. Why? Because it’s an opportunity for a new commodity, a new stream of income for producers.” Vilsack added are the transitioning to more renewable sources of energy. “Farmers have the ability to provide excess energy and therefore additional income. And finally, making sure that we continue to support the conversion of agricultural waste into a wide variety of bio-based products, everything from sustainable aviation fuel to bioplastics and everything in between.”

Aid to Cotton and Peanut Growers

Rep. Bishop said that he is hearing from a lot of peanut and cotton growers from the southeast as well as agribusiness owners and bankers, that farmers are struggling financially. “Much of it is due to the dramatic increase in farm input costs, high interest rates, weak exports. And as you know, the financial situation on the farm impacts many aspects of the rural community. With the farm bill not yet in place for the 2024 crop year, would you support a one-time payment to peanut and cotton producers to help them until we can get the farm bill in place for the ‘25 crop year?” Vilsack said he would work with Bishop’s staff to see what might be possible. “I would say that we are continuing to get resources out under the emergency relief program. There are also additional programs and additional opportunities for additional assistance for your producers, in addition to or in lieu of a single payment,” Vilsack added. Bishop then noted that an aid payment was done “previously for rice producers, I think for the 2022 crop, through an appropriations bill.” Vilsack acknowledged that occurred but noted “we had to give up something in order to be able to finance the $250 million that went to rice producers. I’m not sure what you’re willing to give up or what members of this Committee are willing to give up or what I’m willing to give up.”

H 2-A Program

Rep. John Moolenaar (R-Mich.) expressed concerns about the challenges faced by small farms, particularly regarding the rising labor costs under the H-2A program. He highlighted the strain that this places on farmers in his district, many of whom are facing financial hardships and potential closure due to unsustainable wage rate increases. Moolenaar proposed the Supporting Farm Operations Act to pause these increases for two years and provide relief to struggling farmers. However, Vilsack emphasized the need for broader systemic reforms, suggesting that freezing wage increases alone may only delay inevitable problems. The discussion became contentious as Moolenaar pressed Vilsack on his actions to support American farmers and address the Department of Labor’s role in imposing escalating labor costs. Vilsack defended the use of data-driven decisions but faced criticism from Moolenaar, who argued that the current approach threatens the viability of American farms. Despite the heated exchange, Vilsack reiterated his commitment to advocating for farmers and farm workers, emphasizing the importance of finding solutions that benefit both parties. However, Moolenaar remained skeptical and urged Vilsack to take more decisive action to address the challenges faced by American farmers.

Women, Infants and Children (WIC) Program

Highlighting the significant increase in funding for the Women, Infants, and Children (WIC) nutrition program, Subcommittee Chairman Andy Harris (R-Md.) emphasized the program’s bipartisan support and its importance in providing nutritious support to mothers, infants, and children. However, he raised concerns about the accuracy of USDA’s projections regarding WIC participation and food costs, particularly considering recent claims about decreased inflation and food prices. Harris questioned the necessity of the proposed funding increase for WIC, citing declining participation rates and conflicting data on food costs. He wants to understand the rationale behind the Biden administration’s budget requests.

Rep. Rosa DeLauro (D-Ct.) told Vilsack that she was “intrigued by the new proposal to backstop WIC funding so we do not face nutrition assistance cliffhanger like we just went through.”

Rep. Dan Newhouse (R-Wash.) raised the issue of shrinkflation, citing an example of reduced milk carton size impacting compliance with WIC rules. He asked whether the WIC food package provided flexibility to cover smaller containers. Vilsack indicated that there may be flexibility in certain circumstances and offered to look into the specific issue raised by Newhouse.

Supplemental Nutrition Assistance Program (SNAP)

Harris stressed the importance of adhering to legislative directives and urged honest discussions on federal subsidies for “unhealthy food in the SNAP program.” He detailed that over the past 20 years, “multiple cities and states have asked USDA for the ability to restrict SNAP purchases of sugary drinks, but each time those requests have been denied. As we work through the FY ’25 process, it’s important that we look for ways to best return SNAP, the largest food assistance program in America, back to its original purpose of advancing the nutrition needs of participants, not providing empty calories, which in fact could be potentially harmful to long-term health.”

Harris noted that he is a strong supporter of establishing a SNAP pilot program that restricts unhealthy food or beverages from being purchased with SNAP benefits. He said he was disappointed the FY 2024 Appropriations bill did not include funding to implement a small voluntary pilot program to see how it might help with health outcomes and prevent chronic disease. He asked Vilsack if USDA has the authority to approve a demonstration project, which would be similar to a pilot, that allows states to restrict certain foods or beverages. Vilsack said, “We’d have the authority to work collaboratively with the state, assuming that the process contained proper evaluation. One of the big problems, Mr. Chairman, has been the lack of evaluation in what has been presented to us by states and cities in terms of the programs that they want to adopt. There’s a tendency to think this is a relatively simple process… But we would have the authority to do it. But we’d want to make sure, if we did it, that there would be a strong evaluation component to it.”

Harris said he was glad to hear that USDA has the authority to approve a pilot program, but told Vilsack that “since your first appointment as Secretary of Ag, the obesity rates among U.S. adults have increased by almost 9%, from 33.8% in 2007, 2008, to 42% of Americans in 2017, 2018. About half of all Americans now have one or more preventable chronic disease, most of them diet related or linked to diet in some cases. So, given this rise in obesity rates, is there any evidence that the SNAP-Ed and the Healthy Incentive programs have been effective in having reduced obesity among SNAP participants?” Vilsack said there is research to indicate that “the availability of SNAP does result in healthier choices being made by SNAP families.”

Harris also said that along similar lines is the Summer EBT program for children is now permanent. “States operating the Summer EBT run the SNAP model. So again, allowing access to sugary beverages, salty snacks, the whole deal, but interestingly, Indian tribal organizations operate the WIC model. So as I understand it, families receiving Summer EBT under the WIC model are purchasing WIC approved foods, which we both I think recognize are generally much more nutritious foods than the wide variety of foods available under SNAP. Do you think that recipients could benefit if states operate a WIC model under the Summer EBT program like tribal organizations do to ensure that we’re providing kids with healthy food during the summer? Just like USDA does for instance, during the school year and the national school lunch and school breakfast programs? Vilsack responded: “I think it’s more complicated than that.” Vilsack added: “There’s a fairness and a consistency issue. If indeed the goal here is for taxpayer dollars to be directly linked to more nutritious decisions, are you going to make that same decision for a farmer emergency relief? A farmer gets emergency check from the government, cashes it, goes to the grocery store. Are you going to restrict him from — why not? Fundamentally, that’s the issue. It’s absolutely the issue.” Harris countered: “Mr. Secretary, the difference is we’re not buying food for the middle-class people. We’re buying food…” Vilsack interrupted saying, “But you are, absolutely you are if you get any federal assistance.”

Farm Loss and Land Conversion

Rep. Newhouse expressed concerns about the challenges faced by rural communities and family farms, particularly in light of the rate at which farms are disappearing. He highlighted the adverse wage rate as one of the significant costs burdening farmers and emphasized the need for action to rein in labor costs. Vilsack acknowledged the long-standing issue of farm loss and land conversion. Vilsack detailed that “since 1981, the U.S. has lost 544,000 farms. That is the same number of farms that exist today in North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Colorado, Missouri, and Oklahoma. We’ve lost 151 million acres of land that was in farming that’s no longer in farming. That’s the land mass of Florida, Georgia, South Carolina, North Carolina, Maryland, and most of Virginia. So, this is not a new issue.” Vilsack attributed this trend to a system focused on productivity rather than income sources, leading to income concentration among a small percentage of farms. Vilsack stressed the importance of creating additional revenue streams for farmers to improve their financial stability. Vilsack urged Congress to pass immigration reform, specifically the Farm Workforce Modernization Act, to address labor challenges in agriculture. He emphasized the need for bipartisan cooperation and criticized political obstacles hindering the passage of crucial legislation. Newhouse affirmed efforts to advance the Farm Workforce Modernization Act in both the House and Senate, acknowledging the difficulties in navigating the legislative process.

Threats from China

Rep. Hinson expressed concerns about the safety of the U.S. food supply in the face of potential threats from adversaries like the Chinese Communist Party (CCP). She highlighted the need for better coordination and updated procedures to monitor foreign agricultural land purchases, referencing a recent report from the Government Accountability Office (GAO). Vilsack acknowledged the progress made in implementing GAO recommendations, including improved coordination with the Committee on Foreign Investment in the United States (CFIUS) and efforts to update the Agriculture Foreign Investment Disclosure Act (AFIDA) handbook. He emphasized the challenges posed by the decentralized nature of real estate transactions across the country and the need for ongoing improvements.

Hinson also raised concerns about the heavy reliance on China for critical agricultural inputs such as vitamins B6 and C. Vilsack underscored the importance of reducing reliance on foreign adversaries for key inputs like fertilizer, while acknowledging the delicate balance required in maintaining trade relationships with countries like China, which are significant customers for American agricultural products.

In response to questions about preventing supply chain bottlenecks and incentivizing domestic production, Vilsack suggested leveraging tools like the tax code, rural development programs, and business incentives to encourage investment in domestic production facilities and enhance the business environment for new ventures.

Their discussion highlighted the complex interplay between national security concerns, trade relationships, and domestic production capabilities in ensuring the safety and resilience of the U.S. food supply chain.

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Cotton Industry Awards

Our members received some accolades in March!

Thomas Cleveland, TIGA outgoing president with Carson County Gin Manager Keith Mixon.

Thomas Cleveland – Outgoing President

The Texas Independent Ginners Association (TIGA) held its annual meeting March 11-13 where they awarded outgoing president Thomas Cleveland for his service. Cleveland is the superintendent of Carson County Gin in White Deer, Texas.

David Foster, long-time owner of D&J Gin in Floyd County.

David Foster – Distinguished Service 

The TIGA meeting also awarded long-time ginner David Foster for his service to the industry. Foster and his brother Jody bought the gin in 1984 before selling it to Windstar Corporation in 2023. They ginned their one millionth bale in 2022 and have been actively involved and supportive of the cotton industry for more than 35 years.

Guyle Roberson – Cooperative Ginner of the Year

At the Texas Agricultural Cooperative Council annual meeting — held March 17-19 — Guyle Roberson was named Cooperative Ginner of the Year. Roberson manages Texas Producers Coop in Sudan and Amherst, Texas. To learn more about Roberson, you can read his Plains Cotton Growers Faces of Cotton story installment.

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Upcoming Events

Moore County Gin Grower Appreciation Lunch
Date: March 28, 2024
Location: Moore County Gin, Dumas, Texas

Plains Cotton Growers Board of Directors Meeting
Date: April 1, 2024
Location: Overton Hotel & Conference Center, Lubbock, Texas

Plains Cotton Growers 67th Annual Meeting
Date: April 2, 2024
Location: Overton Hotel & Conference Center, Lubbock, Texas

For a full list of upcoming events, see the Events Page.

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January 26, 2024

Welcome to the January 26, 2024 issue of Cotton News, a service provided by Plains Cotton Growers Inc. for the cotton industry in the Texas High Plains and beyond.

Registrations for the Plains Cotton Growers Annual Meeting is Now Open!

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‘We Feed the Masses’

First published in Agri-Pulse, written by South Texas Cotton and Grain Association Executive Director Jeff Nunley

“We feed the masses.” That was the response of one of my farmers to our Uber driver who shared with us that he was an organic “farmer” that had recently bought 15 acres in Pennsylvania to grow his own organic food. I was impressed with the insight of my farmer’s comment and how it relates to the war on “big” agriculture by many who have the misguided belief that a farm should be small, diverse, and focused on the wants of the wealthy elite rather than the needs of ordinary Americans who work hard to support their families and put food on the table.

U.S. Agriculture has evolved over decades to be the envy of the world in its ability to provide safe and abundant food and fiber for our country and the world. No other country enjoys a food supply that costs consumers on average less than 10% of their household income. Consumers take for granted that grocery shelves will be full of the items they want at prices that are reasonable and predictable.

Empty store shelves during the Covid pandemic, and more recently rampant inflation following the pandemic, brought into sharp focus how sensitive consumers are to scarcity and increasing food costs. More than anything else, these events reinforced the importance and strategic value of maintaining a strong, stable, domestic agriculture industry and providing a safety-net for the farmers that underpin the entire system.

The marvel of our U.S. food and fiber supply system is due to constant improvements in efficiency throughout the supply chain, but particularly due to improvements at the farm level – where it all begins.

When soldiers returned home after WWII, many pursued other opportunities rather than returning to the farm. For those who remained, farm size grew. Improvements in farm equipment, like tractors and harvest equipment, allowed farmers to cover more ground with less labor. Advances in agricultural science and technology along with the adoption of advanced farming practices have provided a constant pace of improvement that has evolved into the production agriculture we know today.

Today’s farmers produce more output with less inputs than ever before. Farmers use less fuel, fertilizer, water, pesticides, and labor for unit of output today than they did just 10 years ago. The average U.S. farmer has less environmental impact and produces more sustainably than anywhere else in the world. As a result of the constant improvements in efficiency on the farm, food prices have decreased over time. When I was in college in the mid-1980s, food costs were $1 of every $5 of household income. That number today is less than $1 of every $10 in household income, even factoring in that away-from-home consumption has increased over the same time. As farmers have increased efficiency, the gains have not translated into improved profits. Rather, these gains have been passed through the system to the ultimate benefit of consumers – this is the nature of commodity markets. Affordable food and fiber made possible by efficient, full-time farming operations underpins our economy by allowing consumers to spend more of their income on goods and services other than food and clothing.

Farming has always been a high-risk, capital intensive, and low profit margin business. Farmers’ income is a function of their yield (which depends on timing, weather, and skill) and the commodity price (subject to global supplies and the actions of foreign governments).

U.S. farm policy has evolved along with the changes in production agriculture with the consistent goal of providing a safety net that helps farmers survive weather and market conditions beyond their control. Farm Bill programs like counter-cyclical payments and crop insurance are intended to preserve the strategic resource of domestic agriculture knowing that farmers cannot enter and exit the business like gamblers at a roulette wheel.

Recently, Secretary of Agriculture Tom Vilsack has lamented that 84% of farm program payments go to only 12% of farmers in our country. What’s wrong with that? When you consider that 12% of farmers (roughly 240,000 farms) are responsible for over 80% of agricultural production in this country, it sounds like the support is going where it should. Keep in mind that this 12% are not “mega-farms”, rather the overwhelming majority are family farming operations with gross cash farm income above $350,000 that have grown to keep pace with the economics of low margins and high capital costs.

It troubles me that this USDA has decided the scales should be tipped in favor of small hobby farms like that of our Uber driver, who would qualify as a farmer in the eyes of USDA. But his livelihood does not depend on his farm like those full-time farmers that USDA has decided to penalize.

It also troubles me that this USDA and others have decided that the economic realities that created the marvel of our modern agriculture and food system are wrong, and they know better. I fear that the well-meaning, but ill-informed who believe we should divert support away from full-time farmers and instead target them to fashionable, feel good social engineering that benefits folks like our Uber driver will undermine an industry that provides the foundation for our country.

Finally, I fear that this increasingly popular notion that “big” agriculture is bad could lead us down the road to less efficient, more costly agriculture. The biggest loser of that will be American consumers, especially those who already struggle to put food on the table.

“We feed the masses.” Yep. That’s us. The 240,000 farmers that are the workhorses of our industry. We deserve to be treated fairly.

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Upcoming Events

Dalhart Crops Conference
Date: February 6, 2024
Location: Frank Phillips College

PCG Advisory Group Meeting
Date: February 9, 2024
Location: Plains Cotton Growers Conference Room

Soil Health Symposium
Date: February 13-14, 2024
Location: West Texas A&M University

Getting to Know Your Soil
Date: February 15, 2024
Location: TTU Native Rangeland

For a full list of upcoming events, see the Events Page.

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January 19, 2024

Welcome to the January 19, 2024 issue of Cotton News, a service provided by Plains Cotton Growers Inc. for the cotton industry in the Texas High Plains and beyond.

Making the ARC/PLC Election for 2024

First published in “Southern Ag Today” by Bart Fischer and Joe Outlaw

On November 16, 2023, President Biden signed H.R. 6363 – the Further Continuing Appropriations and Other Extensions Act of 2024 – into law. The bill extended the Agriculture Improvement Act of 2018 (2018 Farm Bill), reauthorizing programs like the Agriculture Risk (ARC) and Price Loss Coverage (PLC) programs through September 30, 2024. Producers will have an opportunity to make a one-time election between ARC and PLC for the 2024 crop year. USDA opened the election and enrollment period on December 18, 2023, and it runs through March 15, 2024.

The ARC/PLC decision for 2024 is against the backdrop of a general softening in prices, but the implications vary by crop. For some crops, the decision may be clear-cut.

As we have noted in the past, we highly encourage you to also look at tools like the Supplemental Coverage Option (SCO) or the Enhanced Coverage Option (ECO), both of which provide area-wide coverage for part of the deductible not covered by your underlying policy. Importantly, if you elect ARC, you cannot purchase SCO. In other words, you are essentially evaluating ARC versus PLC + SCO. Even if PLC is not expected to trigger, you may still choose to elect it and purchase SCO, particularly if the value of SCO is expected to exceed that of ARC.

For cotton producers, we continue recommending that you first evaluate the Stacked Income Protection Plan (STAX) before making decisions about ARC/PLC. In the case of cotton, STAX cannot be purchased on any farm where the seed cotton base has been enrolled in ARC or PLC for that crop year. As we will discuss at the Red River Crops Conference in Altus, OK, later today, in a scenario where the crop is a total loss, the area-wide policies can provide considerably more coverage than ARC. For example, as noted in the example for Jackson County, OK, in Table 1, STAX can provide more than twice as much support as ARC in a total loss scenario.

As always, we aren’t in the business of telling you exactly what to do, because, frankly, we don’t know what will end up being the best choice. But, as with previous years, we do have a decision aid available at www.afpc.tamu.edu where you can input your info, and it will show you expected payments under as many different price scenarios as you want to look at.

The High Plains comparison chart is provided by PCG Director of Policy Analysis and Research Shawn Wade.

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Upcoming Events

Top of Texas Ag Conference
Date: January 23, 2024
Location: M.K. Brown

Plains Cotton Growers Inc. Board of Directors Meeting
Date: January 24, 2024
Location: FiberMax Center for Discovery

Texas Alliance for Water Conservation 10th Annual Water College
Date: January 24, 2024
Location: Lubbock Memorial Civic Center

Dumas Panhandle Crops Conference
Date: January 25, 2024
Location: Moore Co. Community Building

For a full list of upcoming events, see the Events Page.

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West Texas Cotton Quality Report for the 2023 Season

2023 Cotton Quality Report

This is a weekly summary of the cotton classed at the Lubbock and Lamesa USDA Cotton Division Cotton Classing Offices for the 2023 production season.

Lamesa’s average daily number of cotton samples received this week is 1,087. The office is currently 100% complete in the classing of their season estimate of samples.

Lubbock’s average daily number of cotton samples received this week is 1,492. The office is 99% complete in the classing of their season estimate of samples.

This week’s quality reports:

Lamesa

Lubbock

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The Details Behind the 2022 Emergency Relief Program

If you haven’t read PCG CEO Kody Bessent’s take on the new 2022 Emergency Relief Program, click here.

DATES: Funding availability: Application period for Track 1 will begin October 31, 2023. Application period for Track 2 will begin October 31, 2023. Contact your local FSA office for instructions on how to apply for Track 2 — FSA will be mailing out pre-filled applications for Track 1. You may still apply for Track 1 if you do not receive a pre-filled application.

COMMENTS: The U.S. Department of Agriculture Farm Service Agency will consider comments received by January 2, 2024.

ADDRESSES: You may submit comments by the following method: Federal eRulemaking Portal: Go to https://www.regulations.gov and search for Docket ID FSA–2023–0020.

You may also send comments to the Desk Officer for Agriculture, Office of the Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503. Comments will be available for public inspection online at https://www.regulations.gov.

Track Overview

Track 1 will provide a streamlined application process for eligible crop and tree losses during the 2022 or 2023 crop years for which a producer had:

-A Federal crop insurance policy that provided coverage for crop production losses or tree losses related to the qualifying disaster events and received an indemnity for a crop and unit, excluding:

  • crops with an intended use of grazing,
  • livestock policies,
  • forage seeding,
  • Margin Protection Plan policies purchased without a base policy,
  • banana plants insured under the Hawaii Tropical Trees provisions, and
  • policies issued in Puerto Rico; or

-NAP coverage and received a NAP payment for a crop and unit, excluding crops with an intended use of grazing. The applicable Federal crop insurance policies and NAP provide payments to producers for crop and tree losses due to eligible causes of loss, as defined in the producer’s Federal crop insurance policy or NAP regulations and basic provisions. RMA and FSA are using data submitted by producers for Federal crop insurance or NAP purposes to calculate a producer’s eligible loss under Track 1. The Track 1 payment calculation is intended to compensate eligible crop and tree producers for a percentage of that loss determined by the applicable ERP factor, which varies based on the producer’s level of Federal crop insurance or NAP coverage.

Track 2 will provide assistance for eligible revenue, production, and quality losses of eligible crops not included in Track 1 — similar to Phase 2 of the previous ERP program. FSA has determined that the best estimation of such losses is a producer’s decrease in disaster year revenue compared to a benchmark year revenue, where benchmark year revenue represents a producer’s revenue prior to the impact of the qualifying disaster event.

Payment Factoring

According to the notice issued by USDA, progressive factoring will be used to calculate payments. See figure 1.

Figure 1 (click on image to download)

The basic examples used by the notice break down how payments will be calculated.

For example, to apply progressive factoring to a calculated loss (after subtraction of indemnities) of $5,000, FSA would multiply:

  • the first $2,000 by a factor of 100 percent ($2,000 × 100% = $2,000),
  • the second $2,000 by a factor of 80 percent ($2,000 × 80% = $1,600), and
  • the remaining $1,000 by a factor of 60 percent ($1,000 × 60% = $600).

The sum of those calculations is $4,200, which is the calculated ERP 2022 payment after progressive factoring.

For another example, to apply progressive factoring to a calculated loss (after subtraction of indemnities) of $430,000, FSA would multiply:

  • the first $2,000 by a factor of 100 percent ($2,000 × 100% = $2,000),
  • the second $2,000 by a factor of 80 percent ($2,000 × 80% = $1,600),
  • the third $2,000 by a factor of 60 percent ($2,000 × 60% = $1,200),
  • the fourth $2,000 by a factor of 40 percent ($2,000 × 40% = $800),
  • the fifth $2,000 by a factor of 20% ($2,000 × 20% = $400), and
  • the remaining $420,000 by a factor of 10 percent ($420,000 × 10% = $42,000).

The sum of those calculations is $48,000, which is the calculated ERP 2022 payment after progressive factoring.

For underserved producers, the producer’s share of the Federal crop insurance administrative fee and premium will be added to the resulting sum.

For all eligible crop producers, FSA will then apply a final payment factor of 75 percent, resulting in the producer’s calculated Track 1 payment. So in the example above, the $48,000 calculation will be factored by 75% resulting in a payment of $36,000 to the producer. We’ve provided visual aids below, which are available for download.

Click on the image to download.

Click on the image to download.

2023 Seed Cost Calculator Now Available

The 2023 version of the Plains Cotton Growers Inc. Seed Cost Calculator is available for download on the PCG website at the bottom of the “Resources” page. 

The PCG seed cost calculator is an interactive Microsoft Excel spreadsheet that allows producers to calculate an estimated cost per acre, for both seed and technology, based on published suggested retail prices.

Questions about the tool can be directed to Shawn Wade. 

Download the report here.