LUBBOCK, TX – March 15, 2022, is the deadline for farmers to choose between Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) for their safety net under the 2018 Farm Bill.
Since 2018, producers have had the option to decide on a yearly basis, which program best fits their operation and the decision is available for each base-acre crop type on every farm listed with the Farm Service Agency (FSA).
However, given the current prices for most commodities, Dr. Gary Schnitkey, an agricultural economist at the University of Illinois says commodity title payments are not expected from any program option for the 2022 marketing year. Even then, if a condition resulted in a payment, the FSA would not release the payment until October of 2023.
For soybeans, with an effective reference price of $8.40, and according to a farmdoc article, there is a 4 percent chance that the 2022 marketing year average price could fall below the reference price.
For corn, the effective reference price is $3.70 per bushel.
At this point, commodity title payments should not be expected for either PLC or ARC-CO and if not changed, farmers will automatically be enrolled in the same option as last year.
“Given the low probability of payments with current price projections” Schnitkey adds, “farmers may wish to base program selection on risk perception, considering if there is greater price risk or yield risk for the 2022 crop and marketing year.”
The effective reference price for sorghum in 2022 is $3.95 and 36.7¢ for seed cotton.
Learn more here at https://farmdocdaily.illinois.edu/2022/01/the-2022-plc-and-arc-decision.html
(SOURCE: All Ag News)