News

Economist says there’s little difference between ARC & PLC

An ag economist says for most farmers, choosing between Ag Risk Coverage and Price Loss Coverage for risk management probably won’t matter.

Gary Schnitkey with the University of Illinois says, “Neither ARC County or PLC are likely to make a payment for corn, soybeans, or wheat.”

Schnitkey tells Brownfield commodity prices are higher and reference prices are too low to likely trigger any payments. “If we get commodity prices down that low, $3.70 for corn, $8.40 for soybeans, and $5.50 for wheat, we have more problems than just low prices.”

Schnitkey says he would lean towards the ARC-County option, “Because yields could trigger payments and that might be a valuable feature this year.”

But he says some farmers are looking at PLC so they can use the Supplemental Coverage Option, which has a somewhat higher chance of paying. “Supplemental Coverage provides coverage on crop insurance from 86% down to the coverage level of typically the RP policy, and yes, it is a good alternative.”

Schnitkey says he’s hopeful Congress will adjust the reference prices and allow more coverage in the next farm bill.

The deadline to sign up is March 15th.