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.
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