USDA has opened enrollment for the main commodity programs in the farm bill, the Agriculture Risk Coverage and Price Loss Coverage programs.
Enrollment is open for the 2019 crop year and farmers have until March 15, 2020, to sign up for the programs for 2019.
Under the 2018 farm bill, farmers can sign up their individual crops in ARC-County or PLC, or sign up the entire farm in ARC-Individual. Those program elections will apply for the 2019 and 2020 crop years.
ARC and PLC have been largely on the backburner over the past year while USDA has been providing farmers with trade-aid support under the Market Facilitation Program. MFP, which began last year, was initially expected to be a one-time program, but USDA reopened the program for 2019 after trade talks with China stalled last spring.
ARC operates on a rolling average of revenue price guarantees for crops based on average county yields. PLC has set reference prices for commodities and pays when the national marketing year price comes in below those reference prices.
While enrollment began officially on Tuesday for the 2019 crop year, farmers can enroll for the 2020 crop year starting Oct. 7 and continuing until June 30, 2020. USDA noted a farmer waiting until Oct. 7 for sign up can enroll in both the 2019 and 2020 crop years during the same visit.
Farmers get one chance to update their yields for the 2020 crop year. Under the farm bill provisions, farmers will be able to update yield data for each commodity up to 90% of the average yield for the farm from the 2013-17 crop years.
“During this time, farm owners have a one-time opportunity to update PLC payment yields that takes effect beginning with crop year 2020. If the owner accompanies the producer to the office, the yield update may be completed during the same office visit,” USDA stated.
Farmers will have the opportunity from 2021 through 2023 to change their program decisions.
Effects Of Up Or Down Prices
Under the 2014 farm bill, payments for ARC declined over time for major crops as prices fell after the 2013 crop year. Payments for PLC, which were low at the beginning of the farm bill, increased during the latter part of the farm bill. Congress then added the option for the 2018 farm bill for farmers to switch programs if they wish to do so.
Congress also changed the program by using yields reported by crop insurance companies to the Risk Management Agency for ARC and PLC.
In another program change, if prices move higher over the next few years, then the reference price for ARC and PLC can increase as well. Reference prices have changed to use a five-year Olympic average of prices that would allow reference prices to increase as much as 15% for commodity crops. The current reference prices for corn ($3. 70 a bushel), soybeans ($8.40) and wheat, ($5.50) and reference prices for other commodities remain the same as the 2014 farm bill.
The 2018 farm bill made some other changes to the ARC program, including a trend-yield adjustment and a provision that allows USDA to divide some of the largest counties in the country into smaller units for county average yields.
USDA reminds farmers that enrolling in ARC and PLC can affect eligibility for the Supplemental Coverage Option insurance program. Farmers who sign up for ARC are ineligible for SCO on those planted acres, but farmers who enroll in PLC can still buy SCO policies.
Upland cotton farmers who enroll their seed cotton base acres in ARC or PLC also are ineligible for the Stacked Income Protection Plan (STAX) on those cotton acres. To remain eligible for STAX, producers must not enroll their seed cotton base acres into either ARC or PLC.
To help farmers decide the best program for their acres, USDA has partnered with the University of Illinois and Texas A&M University for a pair of web-based tools.
- University of Illinois: https://farmdocdaily.illinois.edu/…
- Texas A&M University: https://www.afpc.tamu.edu/…
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