Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: IA
USDA service center sign
SIGN UP NOW: Don’t wait until the March 15 deadline to visit your county FSA office to elect and enroll in USDA farm program for 2019 and 2020 crops.

ARC, PLC decision deadline looms

ISU online tools can help you choose the USDA program option best suited for your farming operation.

The clock is ticking for producers on Iowa’s row crop farms to make a two-year election and then enroll by commodity crop and Farm Service Agency farm number. The choices are similar to those offered in the 2014 Farm Bill: Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC). The election deadline is March 15 at local FSA offices.

There really is no reason to delay signing up, as no ARC or PLC payments are expected for the 2019 crops. Besides, many FSA offices could be swamped come February and March with producers who procrastinated in making an election and enrollment decision.

Producers should start by understanding the importance of the effective reference prices of $3.70 per bushel for corn and $8.40 per bushel for soybeans. In order to trigger a PLC payment, the final national cash for the entire marketing year must be below these levels. The national cash price projections for the 2019 crop as of Jan. 10 is $3.85 per bushel for corn and $9 per bushel for soybeans. Thus, no PLC payments are expected for corn or soybean base acres that were elected and enrolled in the PLC program.

Evaluate your program choice

If there are 2019 ARC or PLC payments, it will likely be in a county with exceptionally low 2019 final yields. These final county yield numbers from the USDA Risk Management Agency will not be known until June. The 2019 Iowa yields from the National Ag Statistics Service’s January report were estimated to be 198 bushels per acre for corn and 55 bushels per acre for soybeans. Such levels indicate that most final county yields are likely too high to trigger a 2019 ARC-CO payment.

If there is a 2019 ARC or PLC payment, it will likely be for the ARC-Individual Coverage (ARC-IC) program. The producer probably has a farm with poor 2019 yields and possibly prevented planting acres. That producer should consider electing and enrolling all crops by FSA farm number in ARC-IC if a likely payment will be generated. It will require further examination and production evidence for each commodity crop produced on that farm since the 2013 crop year.

It’s actually for 2020 that an ARC or PLC payment seems more likely. Corn and soybean planted acres are expected to increase by 11 million to 12 million total planted acres for both crops as a result of the large prevented planting acres in 2019.

Price projections for 2020 crops

Two sources of 2020 price projections released last fall are the USDA Outlook and the Food Agricultural Policy Research Institute (FAPRI) at the University of Missouri. Both sources project an increase in 2020 U.S. corn planted acres by 2.5 million to 4.5 million acres and use 30-year trendline yields assuming normal production. Those 2020 crop cash price projections for corn are $3.40 and $3.53 per bushel, respectively. Thus, the likelihood of a 2020 PLC payment for corn that would be received in October 2021 as the final cash price would fall below the reference price of $3.70 per bushel.

Using those same two sources for 2020 soybean cash price projections, U.S. soybean planted acres would increase between 7.5 million and 8.5 million acres as compared to 2019.  Again, they use 30-year trendline yields and normal production. Those 2020 crop cash price projections for soybeans are $8.54 and $8.85 per bushel, respectively. Thus, no 2020 PLC payment for soybean base acres is expected, as the final cash price is not below the effective reference price of $8.40 per bushel. However, the lower national cash price improves the chance of an ARC-CO payment depending on the final county yields.

Helpful online tools

Producers will also have a one-time chance to update their PLC farm yields starting with the 2020 crop. Even if a producer elects the ARC-CO or ARC-IC program option, the PLC yield can be updated and becomes the public record of the farm’s yield.

Supporting evidence for the PLC yield update will likely come from a producer’s crop insurance records if a program crop was produced in 2013 through 2017 crop years. In some cases, the yields for a crop insurance unit might not match with the FSA farm number and will need to be averaged. Note the farmland owner on cash rent farms will need to approve this PLC yield update and sign the form CCC-867 unless a power of attorney form is on file at FSA office.

Use the ISU AgDecision Maker ARC/PLC Payment Estimator and PLC Yield Update Tools to provide your own analysis. It’s available at ISU Extension

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

 

 

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish