Agricultural Finance Researchers Look at PLC and ARC Options for 2024
Researchers at the University of Illinois at Urbana-Champaign examined Price Loss Coverage (PLC), Agricultural Risk Coverage at the county level (ARC-CO), and ARC at the individual level (ARC-IC) programs for farmers in 2024. Their research examined reference and benchmark prices, what conditions could trigger payments for each coverage type, and the likelihood that payments will be triggered in 2024.
At a high level, the researchers concluded that the likelihood of triggering PLC and ARC-CO in 2024 remains low, although the chance is higher than in recent years. This is due to lower prices projected for 2024, higher PLC effective reference prices for corn and soybeans, and higher ARC program benchmark prices. An updated ‘What If’ tool is available to help farmers compare coverage and scenarios based on the most recent Farm Bill updates.
With PLC and ARC enrollment now open, below are additional notes for farmers considering changing coverage for 2024:
>> Farmers must make coverage decisions by March 15.
>> For farmers with multi-year contracts, coverage will continue for 2024 unless an election change is made. If enrollment or changes are not submitted by the March 15 deadline, farmers’ elections will remain the same as in 2023 for each farm commodity.
>> PLC and ARC-CO may be used for different commodities on the same FSA farm or across different FSA farms. ARC-CI coverage combines all commodities on an FSA farm (or across farms) for a weighted average to determine benchmark and actual revenues.
Additional research on PLC and ARC can be found here.
Paulson, N., G. Schnitkey, R. Batts and C. Zulauf. “First Look at PLC and ARC-CO for 2024.” farmdoc daily (14):11, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, January 16, 2024.
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