Southern Ag Today

Author: Yangxuan Liu

  • Cotton Crop Insurance: Navigating Planting Dates Deadline Variations Across Regions

    Cotton Crop Insurance: Navigating Planting Dates Deadline Variations Across Regions

    Timely planting is crucial for crop insurance coverage, ensuring producers remain eligible for their selected yield or revenue guarantee. Producers should monitor three key crop insurance planting dates: Earliest Planting Date, Final Planting Date, and End of Late Planting Period Date. These dates determine coverage eligibility and can impact insurance claims. While crop insurance planting dates typically remain consistent from year to year, they may occasionally be reviewed and adjusted by the U.S. Department of Agriculture – Risk Management Agency when necessary. Any changes to these crop insurance planting dates involve a thorough process, including stakeholder input and consultation with Extension specialists and experts.

    Earliest Planting Date is the earliest date producers may plant an insured agricultural commodity (e.g., rice, corn, soybeans, and peanuts) and qualify for a replanting payment if the crop is damaged by an insurable cause of loss and such payment is available for the crop. However, cotton does not have a designated Earliest Planting Date. Since cotton planting depends on soil moisture and temperature, which vary annually, a fixed Earliest Planting Date is impractical. Additionally, because the cotton crop insurance program does not include replant payment coverage, an Earliest Planting Date is unnecessary for determining replant eligibility.

    Final Planting Date is the deadline by which acres must be planted to receive the full production guarantee selected by the producer. Acres planted after this date will have a reduced guarantee for crop insurance products with a Late Planting Period. Any unplanted acres as of this date must be reported to the insurance agent within three days. 

    Late Planting Period for cotton crop insurance begins the day after the Final Planting Date and lasts for 5, 7, 10, or 15 days, depending on the location. Late Planting Period ends on the End of Late Planting Period Date. This period applies only to cotton crop insurance products that include a Late Planting Period. The specific length of the late planting period varies by location:

    • 15 days: Counties in Arizona, Arkansas, California, Kansas, Louisiana, Missouri, and Tennessee.
    • 10 days: Counties in Alabama, Georgia, and South Carolina.
    • 7 days: Counties in New Mexico, Oklahoma, and Texas.
    • 5 days: Counties in North Carolina and Virginia.
    • For Florida, only Nassau County has a 10-day late planting period, while all other counties have 15 days.
    • For Mississippi, 10 counties in the southern part of the state have a 10-day late planting period, while the rest of the counties have 15 days.

    For acreage planted during the Late Planting Period, the crop insurance guarantee decreases by 1% for each day after the Final Planting Date until the End of Late Planting Period Date, while the producer’s insurance premium remains unchanged. Acres planted after the End of Late Planting Period Date are generally uninsurable, except in cases where prevented planting coverage applies.

    Our previous article in Southern Ag Today provided a detailed overview of all crop insurance products available to cotton producers. Cotton insured under Yield Protection (YP) or Revenue Protection (RP) plans, with related Supplemental Coverage Option (SCO), Enhanced Coverage Option (ECO), and Hurricane Insurance Protection – Wind Index (HIP-WI) options and endorsements, all follow the same Final Planting Dates, Late Planting Periods, and End of Late Planting Period Dates. The Final Planting Dates for these plans are illustrated in Figure 1.

    Cotton insured under Area Risk Protection Insurance (ARPI) and Stacked Income Protection (STAX) does not have a Late Planting Period, thus no End of Late Planting Period Date. Additionally, even though ARPI and STAX policies have the Final Planting Dates, they differ from those of other crop insurance plans. This distinction exists because STAX and ARPI are area-based plans, where coverage and indemnities are determined by county-wide expected and final yields/revenue rather than individual producer’s farm yields or revenue. Since a producer’s specific planting date has a minimal impact on county-wide yield/revenue risk, late planting does not lead to a reduction in coverage under these plans. As a result, the Final Plant Dates for STAX and ARPI align with the End of Late Planting Period Date used for other crop insurance plans.

    If planting by these deadlines is not possible, farmers should keep detailed records documenting the cause. If farmers anticipate being unable to complete planting by the Final Planting Date or during the Late Planting Period, they should contact their crop insurance agent as soon as possible to discuss their options.

    Figure 1. Regional Variations in Final Planting Dates for Cotton Crop Insurance: YP, RP, SCO, ECO, and HIP-WI Policies

    Reference: 

    Chong, Fayu, Yangxuan Liu, and Hunter Biram. “Exploring Diverse Crop Insurance Options for Cotton Producers.” Southern Ag Today 3(51.3). December 20, 2023. 

    Yangxaun, Liu, Hunter Biram, and Faygu Chong. “Cotton Crop Insurance: Navigating Planting Dates Deadline Variations Across Regions.” Southern Ag Today 5(13.1). March 24, 2025. Permalink

  • The Long Term Economic Struggles of Southern Peanut Farmers

    The Long Term Economic Struggles of Southern Peanut Farmers

    This article is a companion to the article titled: The Long Term Economic Struggles of Southern Cotton Farmers published in Southern Ag Today on October 28, 2024.

    Besides cotton, another primary row crop suitable to southern soils and the climate is peanuts. As a legume, peanuts are often used as a rotational crop with cotton and/or corn. Peanuts are grown primarily in the southeastern U.S. from Virginia down to Florida and over to Alabama, with some acreage as far west as New Mexico, Texas, and Oklahoma. In 2024, the U.S. is projected to produce 3.2 million farmer stock tons of peanuts (USDA ERS). Market year average prices are expected to be around $530 per ton (USDA FSA), and if realized, the projected total value of peanut production is expected to be $1.7 billion. Not only are peanuts an important rotational crop, but they also contribute significantly to the rural farm economies of the Southern region.

    Peanuts are capital intensive particularly because of the specific harvest equipment that must be used to dig up the vines. Then after the vines dry, another machine picks the peanuts from the vines. Analysis of data from the USDA Economic Research Service illustrates the financial challenge of the rising costs of peanut farming. Figure 1 highlights the ongoing profitability challenges southern peanut farmers have faced over the last 29 years. These data account for actual production costs incurred during the production process by farm operators, landlords, and contractors and include expenses for labor, equipment, and other inputs. Revenues generated from peanut sales are also analyzed. The revenues do not include government payments and crop insurance indemnities received by producers. Potential government payments during this time period may include traditional farm bill programs for farmers with base acres, as well as ad-hoc disaster relief programs.

    According to Figure 1, the average peanut farmer managed to earn a profit in only five of the last twenty-nine years. On average, peanut growers faced annual losses of $57 per acre. Referring back to the companion article linked above, cotton farmers also faced average annual losses of $94 per acre during this same time period. These long-run average losses per acre show the continued financial challenges incurred by southern farmers despite growing crops that are suitable for the regional climate and soils. As with cotton, long-term economic losses to peanut production put the sustainability of Southern agriculture at risk. A continuation of these trends could result in a prolonged decline in agricultural production, eroding the economic foundation of rural farming communities across the Southern region. It is evident that there continues to be a need for effective agricultural policies and support programs.

    Figure 1. Peanut Production Total Costs, Revenue, and Returns for Producers in the United States (1995 – 2023).

    Data Source: U.S. Department of Agriculture (USDA) Economic Research Service (ERS), Commodity Costs and Returns for Peanuts, May 1, 2024.

    References: 

    Liu, Yangxuan. “The Long Term Economic Struggles of Southern Cotton Farmers.” Southern Ag Today 4(44.1). October 28, 2024. https://southernagtoday.org/2024/10/01/the-long-term-economic-struggles-of-southern-cotton-farmers/

    U.S. Department of Agriculture (USDA) Economic Research Service (ERS), Commodity Costs and Returns for Peanut, Updated on May 1, 2024.

    U.S. Department of Agriculture (USDA), Economic Research Service (ERS), Oil Crops Outlook: October 16, 2024. https://www.ers.usda.gov/webdocs/outlooks/110202/ocs-24j.pdf?v=2829.3

    U.S. Department of Agriculture (USDA) Farm Service Agency (FSA), Projected 2024/25 Market Year Average Prices. Updated October 31, 2024. https://www.fsa.usda.gov/documents/2024-myapdf-1

    Liu, Yangxuan, amd Amanda R. Smith. “The Long Term Economic Struggles of Southern Peanut Farmers.“ Southern Ag Today 4(48.1). November 25, 2024. Permalink

  • The Long Term Economic Struggles of Southern Cotton Farmers

    The Long Term Economic Struggles of Southern Cotton Farmers

    Southern agriculture faces unique challenges, with limited crops that are both suitable and competitive in the region. Cotton, one of the major row crops in the Southern United States, has historically been favored for its drought resistance, making it well-suited to the region’s soil and weather conditions. Cotton is grown from Virginia to California across the southern U.S. In 2024, the U.S. is projected to produce 14.5 million bales of cotton.  While market prices are expected to be around $0.66 per pound (USDA WASDE), the value of cotton production is approximately $4.6 billion nationwide, underscoring its essential role in the Southern region.

    Recent data from the USDA’s Economic Research Service highlights the complexities of cotton farming, showing that growers have faced financial challenges over the years. The data in Figure 1, covering the period from 1997 to 2023, highlight the ongoing profitability challenges Southern cotton farmers face. This data accounts for all costs incurred by participants in the production process, including farm operators, landlords, and contractors. The data reflects the actual production costs incurred by cotton farmers, including expenses for labor, equipment, and other inputs, as well as the revenue generated from cotton sales. However, these figures do not include government payments and crop insurance indemnities received by producers during this period. The government payments include traditional farm bill programs for farmers with base acres, as well as ad-hoc disaster relief programs. 

    In competitive commodity markets, where agricultural goods compete under perfect competition, economic theory suggests that profits attract more producers. This increase in supply drives prices down, eventually reducing profitability. Over time, long-term economic profitability tends to stabilize around zero, which becomes the level needed for economic sustainability for the industry. Producers are compelled to become more efficient in their operations to achieve profitability above this threshold. However, over the 27-year period, cotton only managed to exceed total production costs in four years. On average, cotton growers faced annual losses of $94 per acre, highlighting the crop’s ongoing struggle to cover production costs. 

    This consistent lack of profitability is unsustainable for cotton producers. Farmers’ inability to cover total costs, including fixed expenses like long-term asset depreciation for buildings and equipment, presents a serious risk to the agricultural future. Many farmers are increasingly relying on personal equity to keep their operations running, a practice that is financially unsustainable in the long term. As a result, many are turning to government support, including farm bill programs and disaster relief initiatives, which can provide a safety net during challenging times. 

    With long-term economic loss for cotton production, the economic health of Southern agriculture and the livelihoods of its farmers are at risk. If this issue is not addressed, it could result in a prolonged decline in agricultural production, eroding the economic foundation of farming communities across the Southern region.

    Figure 1. Cotton Production Total Costs, Revenue, and Returns for Producers in the United States (1997 – 2023).

    Data Source: U.S. Department of Agriculture (USDA) Economic Research Service (ERS), Commodity Costs and Returns for Cotton.

    References: 

    U.S. Department of Agriculture (USDA) Economic Research Service (ERS), Commodity Costs and Returns for Cotton, Updated on 10/1/2024.

    U.S. Department of Agriculture (USDA), World Agricultural Supply and Demand Estimates (WASDE), WASDE – 652, September 12, 2024. 

    Liu, Yangxuan. “The Long Term Economic Struggles of Southern Cotton Farmers.” Southern Ag Today 4(44.1). October 28, 2024. Permalink

  • Timeline of the ARC and PLC Programs: Why Are Payments Received a Year Later?

    Timeline of the ARC and PLC Programs: Why Are Payments Received a Year Later?

    The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs are vital components of the farm safety net for many producers, helping them manage the considerable risks they face. Eligible commodities for these programs include wheat, corn, sorghum, barley, oats, seed cotton, long- and medium-grain rice, certain pulses, soybeans/other oilseeds, and peanuts. Given the importance of these programs, we are often asked why the payments are made so late, generally well over a year after harvest. This article illustrates the timeline for the ARC and PLC programs, explains the reasons behind the one-year delay in payments, and examines the impact on current farm bill discussions.

    Typically, prior to planting a crop, producers must make a decision (i.e., an election) between ARC and PLC on a crop-by-crop and farm-by-farm basis. They generally have until March 15 to notify USDA’s Farm Service Agency (FSA) of their election decision and to enroll in an annual ARC/PLC contract for the covered commodities for which they have base acres. Because ARC and PLC are decoupled from production, a producer’s individual production, harvesting, and marketing decisions have no bearing on ARC and PLC payments. In fact, the marketing year is standardized and does not depend on when a farmer harvests their crops on individual farms. Instead, it is based on a fixed start date specific to each commodity, which generally aligns with the typical harvest period for that crop and lasts for 12 months from this standardized start date. For example, the marketing year for cotton and peanuts starts on August 1st and lasts until the following July 31st. The national average price over this “marketing year” is then used to calculate any required ARC or PLC payments. Farmers can then expect the processing of ARC and PLC payments to occur after October 1 following the end of the marketing year, in accordance with the farm bill. 

    Figure 1 illustrates the timeline of the ARC and PLC programs using cotton and peanuts as examples. For the 2024 crop year, producers signed up for ARC/PLC and planted the crop this past spring. The marketing year started on August 1, 2024. Some producers (e.g., South Texas) have already harvested, and the remainder will be harvested this fall. The marketing year will continue into next year, concluding on July 31, 2025. USDA will then calculate marketing year average prices and county yields, and they will make any ARC/PLC payments after October 1, 2025. In other words, more than 18 months will have transpired between the time a producer enrolled in ARC/PLC and the time when assistance was eventually paid.

    Interestingly, it hasn’t always been this way. Using the Counter-Cyclical Payments (CCP) program – the predecessor to PLC – from the 2002 Farm Bill as an illustration: the 2002 Farm Bill required USDA to make payments “as soon as practicable after the end of the 12-month marketing year for the covered commodity.” To help lessen the impact of the lagged payment timing, if the Secretary estimated that a CCP payment would be required, the 2002 Farm Bill required the Secretary to “give producers on a farm the option to receive partial payments of the [CCP] projected to be made for that crop of the covered commodity.” This all changed in the 2008 Farm Bill. The 2008 Farm Bill required any CCP payments to be made “beginning October 1, or as soon as practicable thereafter, after the end of the marketing year for the covered commodity.” In other words, payments were further delayed – until after October 1 following the end of the marketing year – and no partial/advance payments were allowed. The payment timing introduced in the 2008 Farm Bill was maintained with the creation of ARC and PLC in the 2014 Farm Bill, and it is still in place today. This all naturally leads to the question: why? 

    First, both ARC and PLC use the marketing year average price to determine if assistance is warranted. That necessarily means waiting until the end of the marketing year before final ARC and PLC payments can be made. While some attempts have been made to reduce the wait time – such as utilizing prices based on the first few months of the marketing year – those haven’t taken hold. Regardless, that doesn’t explain the further delay introduced in 2008. When the drafters of the 2008 Farm Bill delayed payments until after October 1, they effectively pushed payments into a subsequent fiscal year, as the federal fiscal year starts on October 1 each year. In so doing, this “timing shift” resulted in one less year of assistance that had to be funded by the 2008 Farm Bill, freeing up those resources to be used on other priorities. The problem: reversing this would result in another fiscal year of ARC/PLC assistance having to be provided by the existing farm bill budget. While complicated, it is simply a matter of policymakers deciding if it is better to use scarce resources to (1) accelerate the timing of payments or (2) make programmatic improvements like increasing reference prices. Over the last two farm bill cycles, policymakers have opted for leaving the timing alone and making programmatic improvements instead.

    The more acute concern is this: even if Congress passes a new farm bill this fall (in time for the 2025 crop year), under current ARC and PLC payment timelines, producers will not see any assistance until after October 1, 2026 (the first month of fiscal year 2027). Given growing concerns about the state of the farm economy, even with a new farm bill in place, there undoubtedly will be tremendous pressure on Congress to provide ad hoc assistance for the 2024 crop year this fall, as was highlighted in a recent Southern Ag Today article, to help fill in the gap.

    Figure 1. Two-Year Timeline for Key Dates of ARC and PLC Payments Using Cotton and Peanuts as an Example

    Li, Yangxuan, Bart L. Fischer, and John Lai. “Timeline of the ARC and PLC Programs: Why Are Payments Received a Year Later?” Southern Ag Today 4(35.4). August 29, 2024. Permalink

  • U.S. Cotton Export and Global Market Share Declined in 2023

    U.S. Cotton Export and Global Market Share Declined in 2023

    Most of the milling, spinning, and textile manufacturing supply chain has moved from the Western world to developing countries, primarily Southeast Asia. U.S. textile manufacturing peaked in the 1994/95 marketing year with domestic use of cotton estimated at 11.198 million 480-pound bales. Since the 1994/95 marketing year, U.S. domestic cotton use has steadily declined to a projected record low of 1.75 million bales in the 2023/24 marketing year. As a result, exports are a significant source of demand for U.S. cotton. Since the early 2000s, exports, as a proportion of U.S. cotton production, have been on an upward trend, increasing from 39% in 2000 to a high of 112% in 2020. For the past decade, the U.S. exported, on average, 85% of the cotton produced domestically. The export market has been the driving force for U.S. cotton demand. 

    The highest quantity of U.S. cotton exports was achieved in 2005, with 17.7 million bales, and the second highest total U.S. cotton exports were achieved in 2020, with 16.4 million bales exported. Since 2020, U.S. cotton exports have been declining. For the 2023/24 marketing year, U.S. cotton exports are projected to be 12.3 million bales, the second-lowest quantity in the past decade. 

    The quantity of U.S. cotton exports is impacted largely by total U.S. cotton production. When production is large, exports typically rise, and with lower production, U.S. cotton exports decline. In 2023, the United States planted 10.2 million acres of upland cotton, the lowest since 2016. The harvested area for upland cotton in 2023 was estimated at 7.06 million acres, down from 7.29 million acres the previous year, the second lowest harvested acres on record since 1866. U.S. cotton production is projected at 12.4 million bales for the 2023 crop, nearly 2 million bales below the 2022 crop and the lowest since 2009. In 2023, due to lower production, U.S. ending stocks were projected at 2.8 million bales. The U.S. stocks-to-use ratio is forecast at 19.9 percent for the 2023/24 marketing year. 

    As a result of lower production and increased competition, the United States is losing global market share, declining from a peak of 39% in both 2016 and 2017 to 29% in 2023. The last time the U.S. market share was below 30% was in 2015, when the Unites States planted the second-fewest annual cotton acres in more than 100 years. After that, the U.S. market share recovered quickly with a rebound in production. However, it could be different for 2023, with more competition in the global cotton export market. Brazil has become a significant global cotton producer and exporter. In 2023, Brazil surpassed the United States and became the third-largest cotton-producing country after China and India. Brazil has become the second largest cotton exporting country and is projected to export 11.2 million bales of cotton in 2023, only 1.1 million bales lower than the United States. Increased competition will make it difficult for the United States to recover global market share. Supply and demand for U.S. cotton determines the prices for U.S. cotton producers. Even though there is a smaller global market share, U.S. production was low in the 2023/24 marketing year, leading to a high percentage of U.S. production being exported and cotton prices staying stable in the low 80s.  This was prior to the bump in the last month in cash prices into the 90-cent range. However, with the increase in global production, a lot will depend on whether U.S. production rebounds, resulting in lower cotton prices.  Lower cotton prices might then result in a decline in future cotton acreage in the United States.

    Figure 1. U.S. cotton exports, market share in the global market, and export as a proportion of U.S. production. 

    References and Resources:

    USDA Foreign Agricultural Service. Production Supply and Distribution. Exports, Production, and Domestic Use.  Available at: https://apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery.