Farm Progress

ARC and PLC payments help in a tough ag economy, while CRP payments reinforce commitment to voluntary conservation.

October 23, 2018

3 Min Read
SAFETY NET: Due to the drop in market prices and farm revenue, USDA is paying out nearly $43 million to Iowa farmers participating in the federal farm program.

USDA’s Farm Service Agency announced Oct. 17 that nearly $43 million will be paid to Iowa farms enrolled in the Agriculture Risk Coverage and Price Loss Coverage programs. The payments were triggered due to low market prices for crops in 2017.

Additionally, FSA in Iowa will distribute $392 million in Conservation Reserve Program rental payments to landowners for their commitment to conservation stewardship.

“ARC and PLC were authorized by the 2014 Farm Bill to protect farmers against unexpected drops in crop prices or revenues,” says Amanda De Jong, Iowa FSA executive director. “These payments help provide reassurance to Iowa farm families who continue to persevere, even in this tough farm economy.”

Figuring ARC, PLC payments
USDA says PLC payments have triggered for 2017 barley, canola, corn, grain sorghum, wheat and other crops. In the next few months payments will be triggered for rice, chickpeas, sunflower seeds, flaxseed, mustard seed, rapeseed, safflower, crambe and sesame seed. Producers with base acres enrolled in ARC for 2017 crops can visit fsa.usda.gov/arc-plc for updated crop yields, prices, revenue and payment rates.

In Iowa, 99 counties have experienced a drop in price or revenues below the benchmark price established by the ARC or PLC programs, and will receive payments for 2017 on applicable crops.

“It’s important to remember that ARC and PLC payments by county can vary because average county yields will differ,” De Jong says.

Conservation Reserve Program payments
Also, in mid-October USDA began issuing 2018 CRP payments to support voluntary conservation efforts on private lands. In Iowa, 54,631 farms will receive compensation for their efforts to improve water quality, reduce soil erosion and improve wildlife habitat.

“Since its inception in the 1980s, the CRP program has built upon the voluntary participation of farmers and landowners to take sensitive land out of production and establish land cover to improve the environment,” De Jong adds.

For more information about USDA programs or to locate the nearest USDA Service Center, visit farmers.gov.

15 counties get ARC payments for 2017
Most of Iowa’s 2017 USDA farm program payments are coming from the PLC program. Farmers in only 15 counties in Iowa are receiving payments under the ARC-CO program for losses suffered on their 2017 corn or soybean crops.

Most of the ARC-CO payments, which range from 49 cents to $64.39 per acre, are going to farmers in south-central and southeast Iowa who were hit hard by drought in 2017. ARC-CO payments for 2017 in Iowa are being made for both corn and soybeans in eight counties — for only corn in four counties and for only soybeans in three counties.

In southeast Iowa, where the worst conditions surfaced a year ago, farmers in Davis, Jefferson, Keokuk, Van Buren and Wapello counties qualified for ARC-CO payments on both corn and soybeans.

Van Buren county farmers are receiving the highest rates for both corn and soybeans ($64.39 per base acre for corn and $49.96 per base acre for beans). Corn yields there averaged 122 bushels per acre last year, 41 bushels below the five-year Olympic average (which drops the high and low years). Van Buren County soybean yields in 2017 were 36 bushels per acre, 10 bushels below the five-year Olympic average.

The other primary drought area was in south-central Iowa, where 2017 payments were triggered for growers of both corn and soybeans in Clarke, Lucas and Union counties.

Program payments under ARC-CO are made when actual crop revenue (based on yield and marketing year average price) falls below 86% of the benchmark revenue, as determined by the five-year Olympic average for yields and prices. Payments are made on 85% of the base acres for each crop by “administrative” FSA farm number.

ARC-CO payments have declined in Iowa since the program was launched in 2014, as higher crop prices that occurred earlier this decade fell out of the formula, while yields have been above average in most counties. For the 2016 crop, ARC-CO payments were made in 59 counties in Iowa for corn and five for soybeans.

Source: USDA Farm Service Agency

 

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