Joe Outlaw stopped just short of almost guaranteeing a farm bill would be passed by the end of January in remarks at an economic outlook session during the Beltwide Cotton Conferences in New Orleans.

“I think it’s close,” said Outlaw, Texas AgriLife Professor and Extension economist and co-director of the Agriculture Food Policy Center.

He offered a few caveats but added, “It’s very, very close. It’s basically done with just a few loose ends. I expect a farm bill by the end of the month.”

Outlaw said Congress has incentive to finish the bill by the end of January, after which a new budget cycle begins and the Congressional Budget Office would have to re-score the farm bill with a higher cost “and bad policy,” he said.

“They don’t want to do that. It’s a hammer to their head. No way should they drag this out past January. If they do, they’ll have to recalculate.”

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Outlaw said he has moved “beyond what it’s going to be to how is it going to work. But until the whole thing is over, it’s not over.”

He said farmers will have some decisions to make after the bill is in effect, which will not be in 2014 for the stacked income protection plan (STAX), an insurance-based program that provides the farm safety net for cotton. “The (cotton) industry proposed major changes in the producer’s safety net,” Outlaw said. “Is it good policy? I wish I knew.”

Those changes, he said, came as a result of the Brazil Cotton Case that required changes in the U.S. cotton program to bring it in compliance with WTO rulings.

He said the insurance coverage in STAX is area-based instead of farm-based, so a producer might want to buy up coverage on his usual insurance policy to make up the difference. “It’s important for farmers to look at their individual farm situations,” he said.

A Texas AgriLife decision making tool, Decision Aid, can help with that. “Decision Aid will characterize a producer’s net revenue distribution considering: market receipts; individual insurance buy-ups, premiums and indemnities; Title 1 option; supplemental coverage option (SCO); and the stacked income protection plan (STAX), which is for cotton only.”

Buying up coverage might be advisable with STAX, Outlaw said, since it covers a small band not covered by regular crop insurance. “And farmers need to understand the futures market.”

Outlaw said the STAX program will not be in effect for the 2104. Cotton farmers will have something like a “partial direct payment.”

He said growers who plant something other than cotton on historic cotton base acres will still be protected. “As long as insurance works like it’s supposed to, producers will have a safety net.”

Also of interest:

China stockpile distorting cotton market

Adhering to market fundamentals advised for cotton futures trading

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