Ag Policy Blog

I know DTN subscribers aren't prone to procrastination and are incredibly astute when it comes to protecting the bottom line. So, it goes without saying that another editor's concern about this notification --- OK, it was Marcia Taylor -- is purely for farmers who don't already subscribe to DTN and are thus a little more in the dark on some of these topics.

That aside, the Farm Service Agency issued a notice Wednesday alerting farmers and dairy producers that they have until Sept. 30 to wrap up their enrollment in programs such as Agricultural Risk Coverage, Price Loss Coverage and the Margin Protection Program for Dairy.

Farmers may have made their selection of commodity programs last spring, but that was a two-step process. Besides choosing, or electing, the program, producers also were required to complete the process by signing enrollment contracts in the programs for 2015. According to FSA, more than 1.76 million farmers are expected to sign programs for ARC or PLC.

“These programs provide important risk protection for farm and dairy operations, so it is important not to miss the deadline for enrollment,” said Val Dolcini, administrator of the Farm Service Agency. “Producers already have elected ARC or PLC, so now is the time to sign the contract and enroll for the 2014 and 2015 crop years.

ARC, technically ARC-County, pays farmers based on a formula establishing a benchmark county revenue by using yields and prices over the last five years and paying when actual county revenue falls below that benchmark. Effectively, ARC then pays 10% of that benchmark guarantee.

Price Loss Coverage doesn't have the nuances that go with ARC. PLC has set reference prices in the 2014 farm law that would pay if the national marketing year price is less than the reference price. For corn, PLC would pay if the average yearly national price is below $3.70 a bushel. The reference price or soybeans is $8.40 per bushel and is $5.50 per bushel for wheat.

ARC-County and PLC pay on 85 % of base acres.

The election between ARC and PLC, made by producers earlier this year, is irrevocable throughout the life of the current farm bill.

Nationally, USDA reported earlier this summer that ARC was selected by farmers for corn base acres on 1.24 million farms totaling more than 90 million acres, or about 91% of all corn farms.

For soybeans, ARC was chosen on 52.6 million acres by more than 1 million farms, or 96% of the eligible farms.

Wheat acres are more divided. About 35.4 million acres and 527,000 farms signed up wheat acres for ARC while 27 million acres went for PLC by 271,000 farms.

For grain sorghum, about 5.9 million acres will be enrolled in PLC while another 2.99 million acres will be in ARC.

Nearly all rice acres -- 4 million or so -- will be enrolled in PLC, as will more than 2 million peanut acres and 3.8 million barley acres.

Keep in mind that Upland Cotton is no longer considered a commodity crop for programs such as ARC or PLC.

On dairy, the Margin Protection Program - Dairy helps farmers when the difference, or margin, between the milk price and the average feed costs falls below a certain fixed dollar figure chosen by the producer. Enrollment now is for 2016.

Farmers have the option of selecting different coverage levels during the open-enrollment period. Farmers participate in the program through 2018 and pay a $100 administrative fee every year. Payments are based on historical production, which will increase by 2.61% in 2016, FSA stated.
Dolcini added, "I also remind dairy operations to enroll for coverage in 2016. Just $100 covers 90 percent of milk production at a $4 margin, and with incremental premiums, up to an $8 margin can be covered."

Again, the enrollment deadline is Sept. 30. If you are unclear if you are officially enrolled for ARC, PLC or MPP-D, contact your local Farm Service Agency office.

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