There has been a lot going on in the Farm Bill ARC/ PLC Decision Space, according to Roger Betz, MSUE Farm Business Management and Dr. Jim Hilker, MSU Commodity Marketing Specialist. Below is a list of the thought process for Michigan producers to make the best financial decisions for their farms.
“I had a producer tell me the decision is over $50,000 difference from what he thought he was going to do until he dove into the program to figure things out,” Betz reported. “This is critical no matter what size of farmer you are”, the producer said.
Farm Information Resource Management (FIRM) team has developed several webinars for producers that explain these farm bill changes and the steps producers must take in order to realize the full benefits available to them. These webinars are available at the MSUE Farm Bill Web site:
We now have a better understanding of how ARC-IC works. For example, if there is a FSA Farm that is considered 100% Prevent Planted (No FSA Program Crops actually planted and does have program crops designated as Prevent Plant), then the zero revenue, from this farm or farms can be combined with other FSA farms that have low yields or maybe even average yields and increase total program benefits. This is especially true with the combination of large 100% prevent plant farms with other farms that had only a few acres actually planted; because only the planted acres are used in the weighting with the farms that are 100% Prevent Planted. This situation is very dependent on the county. A county that has average or good yields will not have payments for ARC-CO and therefore ARC-IC will likely be more favorable in those counties. ARC IC is money in the hand, versus speculation on PLC money next year, even if likely.
NASS 2019 Yield Estimates were released Thursday Feb 20th. Many counties have low soybean yields, along with soybean prices also being down, where ARC-CO will pay for the 2019 year. In compliance, the MSU Calculator has been updated to version 6.50, with the NASS Estimated Yields entered as the default yields for the 2019 year. This most current calculator can now handle up to 50 FSA farm numbers at one time to calculate the combined ARC-IC estimated payments compared to ARC-CO and PLC combinations. Betz emphasizes that it’s vital for producers to use this most current version of the MSU Calculator.
MSUE field staff across the state are getting calls from producers seeking assistance in determining the best decision for their farm. Time is running out. Please contact your local MSUE office to request assistance in making the best financial decision for your farm with the most current information available at this time.
Roger and Jim provide the general guidelines outlined in Table 1 for helping producers make the best program choices for their farms. Eaton County is a very difficult decision because of the NASS low soybean yield (max ARC-Co payment), and low corn yield, (some ARC-Co payment) and a bunch of 100% Prevent Plant Farms. All three are close, where a relative change in base acres or even a PLC yield can make a difference in the current best choice. Wheat base relative to corn base relative to soybean base can change the decision from one farm to another or the decision to combine farms under ACR IC.
Table 1. Betz/Hilker Bias-tendencies for making program choices
|Low county yields for both corn and soybeans||ARC-Co|
|Whole FSA farm 100% prevent plant||ARC-IC|
|Low farm yields, down 30-40% with average to good county yields||Look at ARC-IC|
|Combination of 100% prevent plant with other farms||ARC-IC|
|If no 100% prevent plant, and no low farm or county yields then see below:|
|Wheat, barley, sunflowers and flaxseed||PLC plus SCO|
|Corn and oats ?? Not a clear choice, very county dependent – see above||PLC plus SCO or look at ARC-Co|
|Each county and each farm can be different|
The deadline to sign up for ARC/PLC is March 15.