Honestly, this is good news. Unless there is a major event that causes change in the analysis of the 2020 production numbers , there isn?t much chance of farmers seeing payouts from ARC & PLC this fall. Why is it good news? It means we didn’t need to use our safety nets.
The Agriculture Risk Coverage & Price Loss Coverage programs are safety nets which are provided by the Farm Bill. These programs are in effect to help farmers mitigate losses in any given growing year.
Given the numbers we saw in 2020 and the prices that were in effect, there would have to be some huge county-wide losses to trigger these payments.
Gary Schnitkey is one of the Foremost Ag Economists in the U.S. and at the University of Illinois in Urbana. He says that wheat will likely qualify for the ARC & PLC thresholds, but corn and soybeans will most likely not meet the threshold.
Calculations are still ongoing, and there may be a few exceptions to that rule. The USDA is going to tally the results of the 2020/2021 marketing year and look at the average prices and yields for each crop. Then they will make their calculations on any counties that qualified.
