Decision Tim- ARC or PLC

At this time last year, you probably heard us talking a lot about changes to the ARC and PLC programs. The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs are administered by FSA as part of the Farm Bill. The 2018 Farm Bill allowed producers to update yields and make new elections in 2020. Something else the 2018 Farm Bill allows for is for producers to switch their elections from either program each year until 2023.
Making sure you are taking advantage of this new rule can help ensure you are adding an extra layer of protection to your operation. When making your selection between ARC and PLC there are a few things to consider. First, let’s review the three election options you have.

ARC- County: This is best described as a revenue program that pays when county revenue guarantees are not met.
ARC- Individual: Similar to ARC County, but uses your farm’s yields rather than the county. This program will generally only be used by a handful of producers in the river bottoms that take preventive plant on all acres of a farm number.
PLC: This program is best described as price protection. Anytime the market year average price falls below the reference prices a payment will be made.
Reference Prices:
Wheat: $5.50
Corn: $3.70
Soybeans: $8.40

Looking at the current marketing conditions, we believe it may be hard for average prices to fall below the prices listed above to trigger a PLC payment. For ARC- Individual, we only recommend this if you are going to preventive plant an entire farm number. Thus, leaving ARC- County as what we feel most producers are leaning towards. This would pay out if the actual county crop revenue is less than the guarantee for each covered commodity. These elections are made on a crop by crop basis, so you could potentially select a different program for each crop. However, we feel the consensus for 2021 is ARC-CO on all crops.
An important reminder is to enroll any new ground you might have picked up in the past year for ARC or PLC. As another general reminder, if payments are triggered, you will see payments in October of the following year (ie. 2020 year pays in October of 2021). To make election changes for the 2021 you must contact FSA and have paperwork completed by March 15.

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