Ag Policy Blog

ARC and the PLC Reference Price

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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I was off last week and missed a great deal of excitement over immigration and the Renewable Fuels Standard. We'll get to those later.

I did get some email traffic while I was gone and I had a conversation with a farmer I know about ARC and PLC prices.

There is still a little confusion on the relationship between ARC averages and the PLC reference price. While the Agricultural Risk Coverage program is based on a rolling five-year market-year average, the ARC average price floor is the same the Price Loss Coverage reference price in the 2014 farm bill.

Corn: $3.70 per bushel

Soybeans: $8.40 per bushel

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Sorghum: $3.95 per bushel

Wheat: $5.50 per bushel.

Right now, that reference price for corn may not be a big deal because the ARC price for 2014 is $5.29 a bushel. That's determined by using the market-year average prices for 2009-10 crop through the 2013-14 crop. The high price, $6.89 in 2012-13, is kicked out of the equation, as is the 2009-10 price which was below the $3.70 reference price. That $5.29 per bushel price also will likely be the ARC price for 2015 because of that same Olympic average kicking out the high and the low prices.

Keep in mind, if you are having some challenges penciling out the programs, USDA funded decision tools at the University of Illinois and Texas A&M. Other land-grant agricultural economic departments also have set up a lot of their own decision tools specifically for producers in their states.

Texas A&M tool: https://usda.afpc.tamu.edu/…

University of Illinois tool: http://fsa.usapas.com/…

We also keep hearing that the decision calculators sometimes throw out some odd recommendations. We would be interested in hearing from you if you have walked through the calculators. How did the numbers come out on your farm? Did the calculators make sense? Were they helpful?

Deadline to reallocate base acres and program yields: Feb. 17, 2015.

Deadline to choose between ARC-County, ARC-Individual and PLC: March 31, 2015.

I can be reached at Chris.Clayton@dtn.com.

Follow me on Twitter @ChrisClaytonDTN.

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Gary Yoch
11/28/2014 | 8:20 AM CST
Deadline to reallocate base acres and/or update programs yields is February 27, 2015--not February 17.