Economist says ARC & PLC decisions easy, focus on marketing
An ag economist says deciding between the Ag Risk Coverage program and the Price Loss Coverage program is easy this year and farmers should spend more time focusing on a marketing plan.
Paul Mitchell with the University of Wisconsin tells Brownfield because of crop prices and the triggers for ARC and PLC, it’s clear which program to use. “PLC for corn. Even that $3.70 floor is still a better deal. I don’t expect it to trigger this year, but that’s a better risk management. For soybeans, I’m recommending ARC because PLC has never paid. The $8.40 floor is just irrelevant. That’s what it takes to trigger a PLC payment. If you go with ARC, county yields might be low and you’ll get a payment.”
And for wheat growers, Mitchell says, “Wheat is PLC because even with these markets, wheat prices are still below that trigger of $5.50 and so if you’re going to get any payments next year, possibly, it will most likely be for wheat on PLC.”
Mitchell says he is more concerned that farmers will wait too long to put a marketing plan together and potentially lose today’s prices. “If you’ve never used a marketing plan, never worked with a marketing organization, this is a year to lock in these margins because the markets are volatile and these prices could disappear because who knows what’s going to happen in the next year.”
Mitchell says for oats, use ARC because the prices are usually well above the price floor, and he says don’t expect the programs to pay much if anything outside of some wheat payments.
The deadline to sign up is March 15th, the same day as crop insurance deadlines.