{"id":3344,"date":"2024-02-22T14:10:35","date_gmt":"2024-02-22T20:10:35","guid":{"rendered":"https:\/\/agrilife.org\/agecon\/?p=3344"},"modified":"2024-02-22T14:10:35","modified_gmt":"2024-02-22T20:10:35","slug":"high-plains-ag-week-2-22-2024-arc-co-plc-in-2024","status":"publish","type":"post","link":"https:\/\/agrilife.org\/agecon\/high-plains-ag-week-2-22-2024-arc-co-plc-in-2024\/","title":{"rendered":"High Plains Ag Week – 2\/22\/2024 – ARC-CO & PLC in 2024"},"content":{"rendered":"

\"IrrigationThe 2018 Farm Bill has been extended through September 30, 2024.\u00a0 This means that producers may enroll in Title I programs as a part of their risk management plan this year.\u00a0 This post will explain how two of these programs protect farms against price and\/or revenue losses. \u00a0 <\/p>\n

<\/h2>\n

 <\/p>\n

What We\u2019re Reading<\/h2>\n

Proposed Safety Net Choice Could Add Risk to Farmers<\/a> \u2013 Southern Ag Today<\/p>\n

Cotton Acreage and Relative Prices<\/a> \u2013 Southern Ag Today<\/p>\n

Farming to Break Even<\/a> \u2013 Southern Ag Today<\/p>\n

Cover crops can pay despite challenges<\/a> \u2013 Southwest Farm Press<\/p>\n

Input prices a mixed bag in 2024<\/a> \u2013 Southwest Farm Press<\/p>\n

AgriLife Extension updates producers on utilizing dicamba products<\/a> \u2013 AgriLife Today<\/p>\n

Profitability spreadsheet workshops for producers set in South Plains<\/a> \u2013 AgriLife Today<\/p>\n

Overview of the ARC-CO Program<\/h2>\n

The County Agriculture Risk Coverage program (ARC-CO) protects farms against revenue losses at the county level.\u00a0 If the actual county crop revenue for a covered commodity falls below the revenue guaranteed by the program, a payment is triggered.\u00a0 On a per-acre basis, the program guarantees 86% of the county\u2019s ARC-CO benchmark revenue for the commodity.\u00a0 Calculate the payment that producers receive under ARC-CO using this formula:<\/p>\n

Payment<\/em> = 0.85 \u00d7 base acres<\/em> \u00d7 (ARC-CO Guarantee<\/em> \u2013 County Revenue<\/em>).<\/p>\n

ARC-CO caps payments at 10% of the county\u2019s\u00a0 benchmark revenue.<\/p>\n

As an example, Table 1 reports the ARC-CO benchmark revenue, guaranteed revenue, and maximum payment for irrigated seed cotton in Lubbock County (ARC\/PLC Program Data<\/a>, USDA FSA).\u00a0 The benchmark yield and benchmark price are calculated as the Olympic average of the previous 5 years of county yields and market year average (MYA) prices, respectively.\u00a0 Note that both seed cotton yield and price are based on the combined yield and price for cotton lint and cottonseed.\u00a0 The benchmark revenue is calculated as the benchmark yield multiplied by the benchmark price.\u00a0 The guaranteed revenue is 86% of the benchmark while the maximum payment per base acre is 10% of the benchmark.<\/p>\n

\"2024

Table 1. 2024 ARC-CO payment information for irrigated seed cotton in Lubbock County, TX<\/p><\/div>\n

 <\/p>\n

During the 2024 program year, if actual irrigated seed cotton county revenue in Lubbock County falls below $629.68, ARC-CO payments will trigger.\u00a0 For example, if county revenue is $600 even then ARC-CO pays $29.68 per base acre ($629.68 \u2013 $600.00 = $29.68).\u00a0 If a Lubbock County producer has 100 base acres enrolled in ARC-CO, their total payment is $2,522.80:<\/p>\n

Payment <\/em>= 0.85 \u00d7 100 \u00d7 $29.68.<\/p>\n

The payment received by the producer increases as actual county revenue falls until county reaches $556.46.\u00a0 At this point, ARC-CO payments max out at $73.22 per base acre.<\/p>\n

Overview of the PLC Program<\/h2>\n

The Price Loss Coverage (PLC) program protects farms against price decreases during the program year.\u00a0 If the MYA price for a covered commodity falls below the PLC reference price, a payment is triggered.\u00a0 PLC payments reach their maximum on a per-unit basis when the MYA price is less than or equal to the national average loan rate for the commodity in question.\u00a0 Table 2 lists the 2024 PLC reference prices for common crops grown in the Texas Panhandle and Southern High Plains as reported in the ARC\/PLC Program Data<\/a> published by USDA FSA.<\/p>\n

\"PLC

Table 2. PLC reference prices for selected crop commodities<\/p><\/div>\n

 <\/p>\n

Calculate the payment received from the PLC program as follows:<\/p>\n

Payment<\/em> = 0.85 \u00d7 base<\/em> acres<\/em> \u00d7 (Reference<\/em> Price<\/em> \u2013 Effective<\/em> Price<\/em>) \u00d7 Payment<\/em> Yield<\/em><\/p>\n

Using seed cotton as an example, PLC payments trigger when the seed cotton MYA price falls below $0.367\/lb.\u00a0 If a producer has 100 base acres enrolled in PLC, a payment yield of 1500 lbs.\/acre, and the MYA price is $0.35\/lb., their payment from the PLC program is $2,167.50.\u00a0 That is:<\/p>\n

0.85 \u00d7 100 \u00d7 ($0.367 \u2013 $0.350) \u00d7 1500 = $2167.50.<\/p>\n

Making Safety Net Decisions in 2024<\/h2>\n

Will either ARC-CO or PLC payments trigger this year?\u00a0 The Agriculture Food Policy Center<\/a> at Texas A&M offers a 2024 ARC-CO\/PLC Decision Aid<\/a> that can help answer that question.\u00a0 Producers can enter information for their farm and the tool will predict the expected payment amount they might receive from both programs this year. \u00a0In addition, the tool estimates the likelihoods for different possible payment amounts that a farm might receive.\u00a0 Producers should consider both the size of the expected payment and the likelihood of receiving a payment as they consider which program to enroll in this year.<\/p>\n

Producers should also consider how enrolling in ARC-CO or PLC will impact their crop insurance choices this year.\u00a0 Anyone who enrolls in ARC-CO is not eligible for the Supplemental Coverage Option (SCO) or the Stacked Income Protection Plan (STAX). \u00a0Producers who enroll in PLC are eligible for SCO but are ineligible for STAX.\u00a0 Keep these restrictions in mind and evaluate the potential payments from these insurance tools alongside the potential payments from ARC-CO and PLC.\u00a0 The deadline to sign up for both the ARC-CO and PLC program is March 15.<\/p>\n","protected":false},"excerpt":{"rendered":"

The 2018 Farm Bill has been extended through September 30, 2024.\u00a0 This means that producers may enroll in Title I programs as a part of their risk management plan this… Read More →<\/a><\/span><\/p>\n","protected":false},"author":2184,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[16,31,18,9,27],"tags":[],"class_list":["post-3344","post","type-post","status-publish","format-standard","category-ag-policy","category-business-management","category-crops","category-high-plains-ag-week","category-risk-management","entry"],"acf":[],"yoast_head":"\nHigh Plains Ag Week - 2\/22\/2024 - ARC-CO & PLC in 2024 - Ag Economics on the Plains<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/agrilife.org\/agecon\/high-plains-ag-week-2-22-2024-arc-co-plc-in-2024\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"High Plains Ag Week - 2\/22\/2024 - ARC-CO & PLC in 2024 - Ag Economics on the Plains\" \/>\n<meta property=\"og:description\" content=\"The 2018 Farm Bill has been extended through September 30, 2024.\u00a0 This means that producers may enroll in Title I programs as a part of their risk management plan this... 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