As the 2023 Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) enrollment deadline draw nearer (March 15), a University of Nebraska-Lincoln agriculture economist says the federal programs’ potential to make payments does not look favorable this year.
With crop revenues and prices for corn, soybeans, wheat and grain sorghum all higher than the effective reference and benchmark prices within the program, losses will need to be substantial for ARC and PLC to pay. The Extension specialist, Brad Lubben, says prices would have to drop 40% to 45% to trigger PLC payments and as much as 45% to 53% for ARC to kick in.
USDA’s February 7 farm income forecast agrees with the outlook, as the agency only expects $69.1 million in ARC and PLC payments in 2023, an 81% decline from last year. While payouts may seem unlikely, enrolling in one of these programs is still important. If a farmer decides to do nothing, they are re-enrolled in the previous season’s selection and are required to sign a contract.
Read more on losses needed to trigger these two programs here.
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