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ARC/PLC program changes and deadlines announced

By Staff | Sep 19, 2019

The USDA Farm Service Agency (FSA) has opened the enrollment period for the 2019 Agriculture Risk Coverage (ARC) and/or Price Loss Coverage (PLC) commodity programs for 2019. These are continuations of similar programs created in the 2014 farm bill with slight modifications.

The county FSA staffs have received training and forms are being developed. Producers will have until March 15, 2020, to make a 2-year election for either the ARC and/or PLC programs. Enrollment will then take place and be concurrent for both the 2019 and 2020 crop years.

Under the 2018 farm bill, producers can sign up their individual crops by FSA farm number in ARC-County (ARC-CO) or PLC. Or, they can sign up the entire farm in ARC-Individual (ARC-IC). Those program elections will apply for the 2019 and 2020 crop years. Then beginning in 2021 producers can change their program election decisions annually.

ARC-CO operates on a 5-year Olympic average of county-based crop revenue guarantees triggered by a shortfall of actual crop revenue. PLC uses set reference prices for crops and pays when the Marketing Year Average (MYA) weighted average national cash price falls below that reference price. Current reference prices for corn ($3.70 a bushel), soybeans ($8.40) remain the same as the 2014 farm bill and cannot decrease below those levels.

Producers will also have a one-time chance to update their PLC Farm Yields starting with the 2020 crop. Even if a producer elects ARC-CO or ARC-IC, the PLC yield is the public record of yield associated with that FSA farm number. Under the farm bill provisions, producers can provide yield data for each crop by FSA farm number for the 2013 through 2017 crop years.

Most of the supporting evidence for the PLC Yield Update will likely come from a producer’s crop insurance records. Providers of crop insurance are aware of the requests that producers will have of their crop insurance agents. In some cases, the yields for a crop insurance unit might not match perfectly with the FSA farm number. Producers should work with their FSA county staff on those issues. The farmland owner on cash rent farms will need to approve this PLC Yield Update.

Under the 2014 farm bill, payments for ARC-CO declined over time for major crops as prices fell after the 2013 crop year. Payments for PLC, which were non-existent for corn and soybeans at the beginning of the 2014 and 2015 crop years, increased during the latter part of the farm bill. Thus the 2018 farm bill added this option for producers to switch programs annually starting in 2021.

These programs will move to trend-adjusted yields reported by producers to their crop insurance agents. This USDA Risk Management Agency (RMA) data will be used for both the ARC-CO and ARC-IC program.

Another program change if national average cash prices move higher over the next few years, then the reference prices for PLC can increase as well. Reference prices could increase by as much as 15 percent for commodity crops, but only after several years of much higher national cash prices.

USDA reminds producers that enrolling in ARC or PLC programs can affect eligibility for the Supplemental Coverage Option (SCO) crop insurance program. Producers who sign up for ARC are not eligible to purchase SCO on those insured acres. However, producers who enroll in PLC can buy SCO policies through their crop insurance agent annually before the March 15 sales closing date.

Steve Johnson is an Iowa State University Extension and Outreach farm management specialist. He can be reached at sdjohns@iastate.edu.

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