After looking at the latest USDA price projections for corn, wheat, and soybeans, and taking into account price patterns for the crops, five university economists say the Price Loss Coverage subsidy is a better choice for growers than the Agricultural Risk Coverage subsidy for corn and wheat grown this year. Farmers have a March 15 deadline to enroll in either the PLC or ARC program for their 2019 and 2020 crops.
The PLC subsidy is a traditionally styled support program that issues payments when the average price for a marketing year is below a reference price set by Congress in the farm bill: $3.70 a bushel for corn, $8.40 for soybeans, and $5.50 for wheat. ARC payments are made when county-level revenue from a crop is lower than a guarantee that is 86 percent of the five-year average price and yield per acre.
“There is a near certainty of PLC payments in 2019 and a very high chance of payments in 2020” for wheat, said the economists, writing at the farmdoc Daily blog. ARC would make payments in many counties but at lower rates than PLC for wheat.
The PLC program is not likely to generate payments on 2019 corn and soybeans, said the economists. ARC will make payments for those crops in some counties on 2019 production. “Given current price levels, PLC likely has a higher chance of payment and higher expected payment for 2020” corn, they said. For 2020 soybeans, chances of payments are roughly the same for both the PLC and ARC options.