Ag Policy Blog

Down to the Wire on ARC and PLC Decisions

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Will USDA stick with the March 31 deadline for farmers serving notice on their farm-program intentions?

And for those producers who were early birds and certain of their intentions, do their early projections still hold for Agricultural Risk Coverage and Price Loss Coverage payment models?

The window for farmers to take advantage of the one-time opportunity to reallocate a farm’s base acres and to update payment yields will close on March 31. That also is the deadline to elect ARC or PLC coverage for their farms.

Last month, as landowners bumped right up against the deadline for the base-acre reallocation, USDA announced it would extend that deadline to the end of March. Thus, don't be surprised if USDA extends the ARC/PLC deadline sometime between Friday and Tuesday.

Val Dolcini, administrator for the Farm Service Agency, didn't tip his hand on Thursday at a hearing before the House Agriculture Subcommittee on General Farm Commodities and Risk Management. Dolcini would not say whether USDA would grant any kind of extension to farmers enrolling in ARC or PLC.

Dolcini did note, however, that as of March 19 about 94% of farms have made their base reallocation and yield updating decisions. About 77% of farms likely to enroll in ARC or PLC had made their election, Dolcini told the committee.

That does mean that as of last week, about 23% of eligible farmers had not elected a farm program. That percentage likely ranges from state to state. Without an extension, ag leaders in some states might demand FSA run a registration check to specify what percentage of producers in their states have enrolled.

In his written testimony, Dolcini said farmers are making decisions on base acre reallocation, yield update and ARC/PLC election in short order. The rate of producers making decisions at local FSA offices has increase by up to 10% per week.

Farmers who do not make a choice on ARC or PLC will not be eligible to receive payments for either program in 2015 and will be automatically enrolled in PLC for 2015-18 crop years.

Producers do not have to have their ARC/PLC enrollment completed by March 31, but they do need to have contacted their local FSA offices to set an appointment and file their paperwork.

National Corn Growers Association issued a release noting Dolcini said at the hearing that county offices will remain flexible during program sign-up. Farmers who are unable to complete the process by the deadline are encouraged to go to their local FSA office before March 31 to sign a document of their intent to enroll. This will allow the farmer to come back to the FSA office later to complete the enrollment process.

"These are important decisions that will impact farm operations for at least the next five years," said Chip Bowling, NCGA's president. "FSA offices are here to help with that process. If you haven't completed the enrollment process yet, and need more time, get into your local office as soon as possible and sign your intent to enroll."

Dolcini said FSA is making a final push to reach all landowners and producers who have a stake in the ARC/PLC decision.

Decision Tools and Price Shifts

In the meantime, Texas A&M sent out an email earlier this week recommending farmers who used its on-line decision tool take the time go back in and run the model again. That was due to some changes in price projections for several crops that had shifted in recent weeks, said Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M.

"All I said was things are changing and you might want to go back and run the numbers," Outlaw said. "That's all I was trying to do."

Outlaw said it would only take producers a short time to rerun the projections. After all, FSA does allow you to go back and change your decisions before the deadline. A boost in prices for some crops has reduced or eliminated the possibility of PLC payments for the 2014 crops. Even though the long-term forecast might show that PLC would pay more for those crops over the life of the farm bill, that shift could change some thinking on program choices.

Outlaw's email, however, did cause some concern by producers who thought they might have to revisit their earlier commodity-program choices. Art Barnaby, an agricultural economist at Kansas State University, said state Farm Service Agency offices were getting calls about Outlaw's recommendation to check the on-line decision tool. So Kansas State's Ag Econ staff put out a more extensive email recommending producers who used the Texas A&M tool to recheck their figures. A decision tool by Oklahoma State and K-State did not use prices as low as A&M and thus were less likely to get a PLC recommendation early on. Still, Barnaby said these shifts in price forecasts can cause a lot of short-term angst when trying to sign up for a five-year program.

"My conclusion is you can drive yourself crazy chasing a price forecast," Barnaby said. "It's such a crapshoot when you spent a lot of time going through the numbers and now you are going to change because of a price forecast. I'm not sure that makes sense."

Still, K-State recommended producers who have doubts should also take a look at the University of Illinois’s Farmdoc, particularly for a crop on the margins between ARC and PLC such as sorghum. Farmdoc estimates over the life of the Farm Bill, PLC will pay more than the ARC-CO for sorghum base.

If you have some doubts on your farm-program choice, or you are just now realizing there is a farm-program choice, here are a few of those decision tools to help you out.

Texas A&M decision tool:…

Illinois Farmdoc:…

KSU Payment Calculator:…

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