Many of you may have seen the notices that signup has begun for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC). This time around, farmers and landowners need to make their ARC/PLC choice only for the 2019 and 2020 crop years.
I have already started getting questions and interest, but my recommendation is for people to be patient.
The signup deadline is not until March 15, 2020, so there is still plenty of time. Also, PLC will be a much more competitive option for many people this time around and with some much market uncertainty right now, it makes sense to wait a few months.
PLC offers a price floor at the national level — $3.70 for corn and $8.40 for soybeans. If the national marketing year average price is below these floors, then PLC payments will be triggered.
The 2019 marketing year for corn and soybeans began on September 1, 2019. By waiting, farmers can see what crop prices are for 5 to 6 or even 7 months of the 2019 crop year before signing up. Basically, half of the 2019 national price could be known at the time of ARC/PLC decision.
These next few months will also clarify a lot of uncertainty in markets. Much more will be known about the size and quality of the 2019 crops that were planted late. Also, federal policy regarding renewable fuel standards and the granting of waivers may change, or at least be clarified.
Finally, trade policy seems to be continually evolving – the next few months may bring decisions or at least clarity on the USMCA trade agreement and possibly even with China. All of these point to the value of waiting to make your ARC/PLC decision.
I will be working with UW Extension to create videos and fact sheets for farmers and country educators to use after harvest and when we know more about markets, our major outreach push will begin in December.
If you want to work on your ARC/PLC decision over the next few months, the best thing you can do is to become familiar with how the programs work and think about which might be best for your situation.
For those wanting to know more now, I suggest using these materials developed by the University of Illinois, which are relevant for all states:
- Background & Discussion: https://farmdocdaily.illinois.edu/2019/08/introducing-the-gardner-farmdoc-payment-calculator.html
- Webinar: https://www.youtube.com/watch?v=kYuSFmhfF7s
- Decision aid tool: https://fd-tools.ncsa.illinois.edu/#/