Republican congressman Frank Lucas of Oklahoma, a member of the Farm Bill Conference Committee, said we could have a new farm bill by the end of the year.
“We’ll have a window of about three to four weeks,” Lucas said. “Potentially the first week of December you’ll see a comprehensive bill come together. If the conferees can agree then I think (Congress) will pass the bill and the president will sign it.”
But that’s not guaranteed. Lucas said the odds are probably 60-40 in favor.
“I’m comfortable in saying that progress is being made on the key issues,” he said. “Congress will go back in session on Nov. 13 to reorganize after the election for the coming year. Then we’ll finish in the lame duck session the existing business so there’s a three-week window in there. Either we get a new farm bill done, a five-year document, or we’ll have a one-year extension (of the current farm bill). If that happens it will be in the final appropriations bill to fund the rest of the federal government.”
Lucas said Agriculture Risk Coverage and Price Loss Coverage will probably stay the same in the next farm bill.
“My understanding is the base documents that we went into conference with are essentially reauthorizations of present programs. Now there’s some issues like reference prices and what will PLC pay at certain levels, where does ARC kick in and those kinds of things that still need to be settled," Lucas said. "You have to figure out how you’re going to do everything else and then the money that’s left over will almost completely be, I think, assigned to adjusting reference prices. Until we know how much money we have to work with, we can’t adjust.”
The current reference price for wheat in the 2014 farm bill is $5.50 a bushel. Jimmie Musick, president of the National Association of Wheat Growers, said they have long advocated for a higher reference price to provide more protection from market swings.
“We had hoped for a reference price of no less than $6,” Musick said.
As for what’s in the rest of the conference committee farm bill, Lucas said Adjusted Gross Income will likely be changed from $900,000 to $700,000. As stated in the 2014 farm bill, producers are not eligible for federal farm payments if their AGI is higher than $900,000. The 2018 farm bill would lower that threshold to $700,000 and make more agricultural operations eligible.
Payment limits will stay the same except the new farm bill will use the IRS definition of a “pass-through entity.” Depending on how an agricultural operation is structured, producers may be able to “pass-through” profits from multiple revenue streams into a personal business account. If eligible, pass-through entities can claim a tax deduction as part of the $1.5 trillion tax overhaul passed in 2017.
Wheat Squared is sponsored by the Oklahoma Wheat Commission and Oklahoma Genetics, Inc.