More on PLC and ARC from The Farm Bill Simplified……

Printer Friendly
Bookmark and Share

PLC is similar to the old counter-cyclical program.  Payment is a reference price based on 85% of base acres.   In 2014, we will have the opportunity for a one-time yield update, which is 90% of the 2008-2012 average (you may plug in 75% of T-yield if less than 75% of T).   The PLC payment will be the Reference Price less the 12-month national average marketing price x yield x 85% of base acres.  The reference price for corn is $3.70 and $8.40 for soybeans.   Let’s work the math:  $3.70 – greater than $3.70 average price = no payment.  $3.70 – $3.20 average price = 50c x 180 yield x 85% x 100 base acres would = $7,650 payment. 

ARC area will utilize the Olympic average (drop the high and low) of the five most recent years area yield x the Olympic average five most recent years national marketing price (can plug the reference price if that’s higher in any given year).  Actual farm revenue will equal the area yield x the national twelve-month average market price.  The ARC area payment will be 86% of the benchmark revenue, which is actual revenue x 85% of base acres (not to exceed 10% of the benchmark revenue and payment limit). 

ARC individual will work similarly except using your farm production history rather than the area figures (county averages), and instead of 85% of base, this will calculate on 65% of base.   ARC also allows a yield plug of 70% of T instead of 75% as in PLC. 

Interested in receiving agricultural news and timely updates from ASFMRA? Sign-up for the weekly ASFMRA E-News.