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2018 Farm Bill PLC or ARC

County Agent News
Dan Folske
February 10, 2020 

2018 Farm Bill PLC or ARC

            It’s time for producers to make a selection of which Farm Bill program they want to enroll in. For the previous Farm Bill producers had to select a program for the entire Farm Bill period. One of the major changes for the 2018 Farm Bill is that the current selection will be only for the 2019 and 2020 crop years. After 2020 the selection will be for only one year at a time.

            A really huge benefit farmers have right now is not an intentional one by congress but one provided by the delay in passing the 2018 Farm Bill. That benefit is Wheatthe fact that producers are now signing up for the 2019 Farm Program after the 2019 harvest and three quarters of the way through the Marketing Year. Potential payments under the PLC program are based on the Marketing Year Average (MYA) prices times a fixed PLC yield for covered commodities. ARC program payments are revenue based. Possible ARC payments are based on the difference of the reference price times average yield and the MYA times actual yields for the program year.  The ARC-CO program  uses county yield averages while the ARC-IC program uses individual farm yields. Each of these programs use formulas with various adjustment factors and payment caps to calculate actual payments but for simplicity,  PLC is based on commodity price while ARC-CO and ARC-IC are based on price times yield. Making the choice at this time for the 2019 Farm program means that most of the 2019, harvested crop has already been sold and the MYA price is less likely to have a substantial change from current expectations than it would be under a normal sign up timeline.

            NDSU Extension Farm Management specialists have put together an Excel spreadsheet calculator tool to help producers evaluate potential payments under the PLC and ARC-CO programs and make enrollment choices for their farms. Producers can google NDSU Farm Bill or go directly to https://www.ag.ndsu.edu/farmmanagement/farm-bill to find and download the calculator. After downloading and opening the calculator make sure you “enable editing” and select the county where your farm is located. Enter your base acres, PLC yield, and your best guess of the 2019 county average yield for each crop. The calculator will then display your expected payment for each crop entered under the ARC-CO and PLC programs. You can easily compare possible scenarios of higher or lower yields or prices to see which program will provide you with higher expected payments.

            An important thing to remember is that these program payments are based on your historical base acres for each crop. It does not matter what crops you actually planted in 2019 or will plant in 2020.

            If you have questions about using this calculator or cannot download and use it on your computer please give me a call at 701-377-2927 or stop in at the Burke County Extension office located  in the Burke County Courthouse in Bowbells.

 

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