Information provided by: Ben Brown, Assistant Professor of Professional Practice – Agricultural Risk Management
Producers have until March 15, 2020 to make a commodity program selection for the 2019 crop year. Producers will have the same program election for both 2019 and 2020, but may change their selection annually for 2021, 2022, and 2023. Similar to the 2014 Farm Bill, there are three options for federal commodity programs the 2018 Farm Bill:
- Agricultural Risk Coverage – County (ARC-CO)
- Agricultural Risk Coverage – Individual (ARC-IC)
- Price Loss Coverage* (PLC)
*Producers may also have opportunity to participate in the Supplemental Coverage Option under the Federal Crop Insurance Program
The ARC-CO program provides revenue loss coverage at the county level. ARC-CO payments are issued when the actual county crop revenue (current year county yield multiplied by the national marketing year price) of a covered commodity is less than the ARC-CO guarantee (5 year Olympic average county yields multiplied by 5 year Olympic average of the higher of the national marketing year price or the effective price for the covered commodity and the product reduced by 86%). The 5 year Olympic average has a 1 year lag- Program year 2019 would use the five years of 2013-2017. Source – USDA Farm Service Agency https://www.fsa.usda.gov/programsand-services/arcplc_program/index
The individual option of ARC is also a revenue program, but instead of county yields – it is the yields of the individuals planted acres that get used to calculate a payment. A weighted payment is made on base acres not planted acres. Another difference from the county version of ARC is that payments are only made on 65% of the farms base acres not 85%. The ARC-IC program is a more complex, and historically less popular option. However, there may be scenarios that warrant further consideration. You can learn more about these attributes by clicking the following link: https://farmdocdaily.illinois.edu/2019/10/the-case-for-looking-at-the-arc-ic-arc-individual-program-option.html
The PLC program payments are issued when the effective price of a covered commodity is less than the respective reference price for that commodity. The effective price equals the higher of the market year average price (MYA) or the national average loan rate for the covered commodity. Source – USDA Farm Service Agency https://www.fsa.usda.gov/programs-and-services/arcplc_program/index
There are several decision aid tools available to producers available at the following link: https://aede.osu.edu/research/osu-farm-management/2018-farm-bill
Screenshot of Ohio State University Farm Bill Decision Aid Tool
These tools are designed to predict which programs are more likely to trigger payments, based on the given information (county yield estimate and estimate of market year average price). If you need assistance with using the decision aid tool, contact the Williams County OSU Extension Office at 419-636-5608 or e-mail karhoff.41@osu.edu.