Explaining ARC-CO Payments with Illustrations for the 2016 and 2017 Crops

Objective of this article is to explain the conditions under which the ARC-CO (Agriculture Risk Coverage – County) crop program makes payments. These conditions are often not well understood. It is common to discuss ARC-CO in terms of price, thus ignoring the role yield plays in determining payments by this revenue program. In addition, discussions often fail to mention that ARC-CO has a floor below which its reference revenue cannot decline. Illustrations use US data for the 2016 and 2017 crops of corn, soybeans, and wheat.

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