ARC-CO

ARC-County: What’s my County’s 2022 Guarantee Revenue – Deadline to sign Up at FSA is March 15

By:  Wm. Bruce Clevenger, OSU Extension

The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs were authorized by the 2014 and 2018 Farm Bills. Both programs are risk management tools. The ARC-CO (county) program provides income support tied to historical base acres, not current production, of covered commodities. ARC-CO payments are issued when the actual county crop revenue of a covered commodity is less than the ARC-CO guarantee for the covered commodity.

The Farm Service Agency (FSA) publishes county-level data online that provides the details used in the ARC-CO calculations. The 2022 Program Year-specific data contains the ARC-CO Benchmark Yields and Revenues using county-level yields and Market Year Average prices from 2016-2020. The data is organized by state and county name from Autauga County, Alabama to Weston County, Wyoming.

To access the data, visit the link and make two additional clicks:

https://www.fsa.usda.gov/programs-and-services/arcplc_program/arcplc-program-data/index

Click 2022 Program Year Specific Data

Click 2022 ARC-County Benchmark Yields and Revenues (Excel format)

A 2022 ARC-CO payment is made when the actual 2022 county crop revenue is less than the Guarantee Revenue for the covered commodity. The Guarantee Revenue is 86% of the county Benchmark Revenue, based on the Olympic average county yields and Olympic average Market Year Average (MYA) price for five prior years.

Q: What is the value of knowing your county’s 2022 Guarantee Revenue?
A: A producer can then contemplate conditions that may occur in national price and their specific county yields that would trigger or not trigger a 2022 payment.

Q: What is the difference between ARC-CO and PLC?
A: ARC-CO is a revenue (price and yield) risk program; PLC is a price risk program.

Q: How much do we know about the 2022 crop yields and 2022 commodity prices to make ARC/PLC decisions?
A: County yields are as (un)predictable as the weather. Even trend yields, retrospectively, have significant past volatility. Market analysis and futures prices can be some indicators of price, but they are based on what the market knows and reacts to today. Risk management is not about predicting the future, it’s about being prepared.

The USDA-FSA programs are offered as risk management choices and not a guaranteed payment program. Crop prices, production systems, and other risk management tools should be considered as producers make the ARC/PLC election/enrollment by March 15.

The 2022 PLC and ARC Decision

By: Gary Schnitkey, Nick Paulson, and Krista Swanson – Department of Agricultural and Consumer Economics – the University of Illinois and Carl Zulauf – Department of Agricultural, Environmental and Development Economics – Ohio State University

Farmers will again have until March 15 to make commodity title program selections. Given the current high prices, commodity title payments are not expected from any program option for the 2022 marketing year. If a change in conditions resulted in payments, those would be received in October 2023, after the close of the 2022 marketing year. Farmers wishing to purchase the Supplemental Coverage Option (SCO) crop insurance policy must select Price Loss Coverage (PLC) as the commodity title choice. Based on current price projections, Agriculture Risk Coverage at the county level (ARC-CO) will maximize the chance of payment for soybeans, although that chance will be small. The probability of payments is roughly the same for corn and soybeans.

Decision Overview

Farmers have three program options when making their election decisions.

  • Price Loss Coverage (PLC) is a crop-specific fixed price support program that triggers payments if the marketing year average (MYA) price falls below the commodity’s effective reference price. Payments are made on 85% of historical base acres.
  • Agricultural Risk Coverage at the county level (ARC-CO) is a crop-specific county revenue program. ARC-CO triggers payments if actual revenue (MYA price times county yield) falls below 86% of the benchmark revenue (product of benchmark price and trend-adjusted historical yield for the county). Payments are made on 85% of historical base acres.
  • Agricultural Risk Coverage at the individual level (ARC-IC) is a farm-level revenue support program. Like ARC-CO, payments are triggered if actual revenue falls below 86% of the benchmark. If an FSA farm unit is enrolled in ARC-IC, information for all commodities planted in 2022 are combined together in a weighted average to determine benchmark and actual revenues. If a farmer enrolls multiple FSA farms in the same state, all farm units are combined in determining the averages for actual and benchmark revenues. Payments are made on 65% of historical base acres.

Decisions are made for each FSA farm unit. PLC and ARC-CO are commodity-specific and can be mixed and matched on the same FSA farm or across different FSA farms (i.e. PLC for one commodity, ARC-CO for another on the same FSA farm, or using different programs for the same crop on different FSA farms).

The following sub-section will discuss the PLC and ARC-CO decision for corn, soybeans, and wheat in 2022. This focus is taken as most individuals choose between PLC and ARC-CO. Not many farms are enrolled in ARC-IC. Even if enrolling in ARC-IC, having some understanding of the PLC and ARC-CO alternatives will be valuable in making decisions. Continue reading The 2022 PLC and ARC Decision →

Agricultural Risk Coverage and Price Loss Coverage for the 2021 Crop Year

by: Mary Griffith, Chris Zoller, Hallie Williams, OSU Extension Educators

Enrollment for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs for the 2021 crop year opened in October, with the deadline to enroll and make amendments to program elections on March 15, 2021. This signup is for potential payments for the 2021 crop.

If changes are not made by the March 15th deadline, the selection defaults to the programs selected for the 2020 crop year with no penalty. While it is optional to make changes to program elections, producers are required to enroll (sign a contract) each year to be eligible to receive payments. So, even if you do not change your program elections, you will still need to make an appointment at the Farm Service Agency to sign off on enrollment for the 2021 crop year by that March 15th deadline.

Producers have the option to enroll covered commodities in either ARC-County, ARC-Individual, or PLC. Program elections are made on a crop-by-crop basis unless selecting ARC-Individual where all crops under that FSA Farm Number fall under that program. These are the same program options that were available to producers during the 2019 and 2020 crop years. In some cases, producers may want to amend program election to better manage the potential risks facing their farms during the 2021 crop year. Continue reading Agricultural Risk Coverage and Price Loss Coverage for the 2021 Crop Year →

Farm Bill Reminders and Deadlines

Two Quick reminders and deadlines:

  • Producers who wish to update their FSA farm yield have until September 30, 2020, to do so. A tool to determine if a producer might want to update their PLC yields is available at https://aede.osu.edu/research/osu-farm-management/2018-farm-bill/arcplc-decision-aid-tools
  • Enrollment and Election for the 2021 program year will start October 1, 2020, and end March 15, 2021. OSU Decision aides will be updated once we have annual trend yield values for historical ARC-CO yields matching the program year 2021.

From the Farm Management Front – Update on County Yield Estimates for 2019 ARC/PLC Programs

On the dark art of software estimation | TechCrunchFrom Sarah Noggle with additional information from Ben Brown.

Sarah’s information: Yes, you read that correctly, 2019 estimates. As many of you know and are understanding the 2018 Farm Bill program through USDA (yes – it’s confusing sometimes when you are working with it daily), one will remember that payments will be made the calendar year after the program selection in late October. 

I have had a few requests and asks about what will my 2019 Farm Bill payments look like if I choose ARC-CO or PLC for Paulding County.  While this information will officially come from the FSA office later in the calendar year in 2020 (usually in October), I have attached some information on the ESTIMATES. Remember these payments are made on your BASE acres, not on the acres you planted in 2019. 

  • Paulding County – ARC-CO Wheat Base Acres $33.38
  • Paulding County – ARC-CO Corn Base Acres $0
  • Paulding County – ARC-CO Soybean Base Acres $0
  • Paulding County PLC Wheat Base Acres $36.66
  • Paulding County PLC Corn Base Acres $11.22
  • Paulding County PLC Soybean Base Acres $0

 Also, remember due to 2019 prevent plant acres in Paulding County and the surrounding counties, some producers choose the ARC-IC program.  The ARC-IC payments will be made comparing your own farm-level data and requires you to submit extra information to the FSA office. Ben Brown has created the estimates for corn, soybean, and wheat base acres for all the counties across the state.  His information will allow producers to have an idea of autumn working capital, debt repayment, and information to purchase inputs with an early season discount.  Continue reading From the Farm Management Front – Update on County Yield Estimates for 2019 ARC/PLC Programs →