Deadline March 15 on ARC/PLC Selections
Ag Economist Says Big Losses Would be Needed for ARC, PLC to Pay Farmers in 2023
LINCOLN, Neb. (DTN) -- Farmers need to enroll in either the Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) program by March 15 for the 2023 growing season, even though the potential for those programs to make payments is not very good, an agriculture economist at the University of Nebraska-Lincoln said during a webinar on Tuesday.
That's because crop revenues and prices for corn, grain sorghum, soybeans and wheat all are projected to be much higher than the effective reference and benchmark prices in the programs.
Brad Lubben, an Extension specialist and associate professor at UNL, said prices would have to drop 40% to 45% to trigger PLC payments. For ARC, they'd have to drop between 45% and 53%.
"And these two payments are going to be negligible unless there were certain counties that had extreme drought losses and yield losses that might still trigger ARC," Lubben said. "If you start the year with general expectations for yield, then the safety net -- either ARC or PLC -- starts effectively far out of the money."
USDA agrees. In its Feb. 7 farm income forecast, the agency said it expects only $69.1 million in ARC and PLC payments in 2023, an 81% decline from 2022.
Lubben said although payouts are unlikely, it's still worthwhile to enroll in one of the programs.
March 15 is also the deadline for crop insurance enrollment, and Lubben said it is important to consider the whole picture and enroll in crop insurance with the ARC/PLC realities in mind.
"Crop insurance becomes an even more important decision for producers," he said. Most U.S. corn and soybean growers also have a March 15 deadline to purchase crop insurance, and reference prices for revenue protection products are being determined this month.
For the current 2022 crop year, projected prices are far above the reference prices for PLC. USDA currently forecasts corn at $6.70 per bushel, grain sorghum at $6.85, soybeans at $14.20 and wheat at $9.10. The effective reference prices for those commodities, Lubben said, are $3.70, $3.95, $8.40 and $5.50, respectively.
The ARC benchmark prices are identical except for soybeans at $9.12.
Lubben said farmers also will have the opportunity to take advantage of disaster assistance in 2023, including pandemic agricultural relief program dollars.
The ARC/PLC decision is made on an annual basis. Farm Service Agency staff said during the webinar that any change to the program selection must be agreed to unanimously by all farmers enrolled for payments on a particular farm. Also, if farmers decide to change nothing, they are re-enrolled in the program they selected last crop season and are required to sign a contract.
Todd Neeley can be reached at email@example.com
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