NDSU Suggests Waiting to Make Agriculture Risk Coverage, Price Loss Coverage Decisions
October 2, 2019 | View PDF
The sign-up period for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) program decision under the 2018 Farm Bill has started and will run until March 15, 2020, though Andrew Swenson, NDSU Extension farm management specialist, advises producers to wait.
“Producers have the opportunity to get more clarity on prices and yields by waiting,” Swenson says.
Producers have the option of selecting either PLC or ARC-County on a crop-by-crop basis within each Farm Service Agency (FSA) farm unit, whereas the ARC-Individual program option includes total crop base acres of the enrolled farms. The program election decision is for both the 2019 and 2020 crop years.
To determine payments for the 2019 crop year, both safety net options use 2019 national marketing year average prices (MYA), but the ARC-County program also uses 2019 county average yields.
The 2019 marketing year period varies by crop. The period for wheat, barley and oats is June 1, 2019, through May 31, 2020. For canola, flax, field peas and lentils the period is July 1, 2019, through June 30, 2020. For soybeans, corn and sunflowers the period is Sept. 1, 2019, through Aug. 31, 2020.
The U.S. Department of Agriculture provides an update on the projected MYA prices each month based on sales up to that point. With each month the price projection becomes more accurate.
“Yields are more difficult to project,” Swenson says. “The primary source of ARC-County yields, starting in 2019, will be from the Risk Management Agency (RMA) instead of the National Agricultural Statistics Service (NASS).“
There are no estimates by RMA of county yields, and the yields used by the FSA for the ARC-County program are not published until payments are announced.
NASS county yield survey results for the 2019 crop of wheat, barley and oats are available in the middle of December whereas corn, soybeans and sunflowers yields will be published towards the end of February 2020.
These should help indicate the level of yields, Swenson adds. Also, since the ARC/PLC signup period is after harvest, producers will have an idea of yields in the county.
Producers contemplating the ARC-Individual option have an information advantage. ARC-Individual payments are determined by farm level yields, therefore producers should be able to determine 2019 crop year payments, if any, under the ARC-Individual program well before the signup decision deadline.
“Currently, PLC looks like the best option for nearly all commodities covered by the ARC/PLC program due to the drop in commodity prices in recent years,” Swenson advises. “Because time is in your favor; take advantage of it to make a more informed decision.”