Commodity prices make ARC & PLC decisions easier


Commodity prices make ARC & PLC decisions easier

A University of Wisconsin ag economist says the recent market trends have simplified risk management decisions for most farmers. “Sign up for PLC on corn and wheat, and on soybeans and oats, take the ARC, and don’t expect to get much from those two.”

Paul Mitchell tells Brownfield it is almost always unclear whether farmers should sign up their soybeans for the Agricultural Risk Coverage (ARC) or the Price Loss Coverage (PLC) program, but with current prices, he says the decision is easy. “My recommendations for soybeans is to sign up for County ARC. We haven’t seen a PLC payment ever in soybeans and that $8.40 price floor that PLC uses, it just doesn’t seem relevant even going into 2021.”

For corn, Mitchell says PLC is the clear choice. “The $3.70 floor is still relevant, and again, the ARC payments only come if local yields fell, and I think that $3.70 floor is much more of a better risk management protection for farmers.”

Mitchell says the recent market prices have been influenced by everything from South American weather to unrest in Argentina, but the big factor is China. “China is rebuilding its hog herd and it’s the new style of hog production in these big buildings, and it’s all consolidated, and they’re talking about making sure the feed is clean before it comes in, the corn and soybeans.”

Mitchell says farmers should contact their Farm Service Agency office sooner and not later since many offices are still closed to in-person business. March 15th is the deadline for ARC-PLC signup and for crop insurance.

Paul Mitchell’s website with ARC-PLC recommendations and a link to a decision tool can be found here.

Ag Economist Paul Mitchell from the University of Wisconsin Madison discusses ARC and PLC decisions with Brownfield’s Larry Lee