2022 commodity program decision: ARC-CO – PLC decision indicator in the USA

Published 2022년 2월 25일

Tridge summary

The article provides an analysis of the decision farmers need to make between ARC-CO (Agriculture Risk Coverage – county) and PLC (Price Loss Coverage) for the 2022 crop year. It explains that for most commodities, the decision indicator suggests that ARC-CO is expected to pay more per base acre when the December cash – reference price ratio equals or exceeds 100%, while PLC is expected to pay more when the ratio is less than 100%. However, both programs are expected to make little to no payment for most program commodities in 2022. The article also mentions that crop insurance Supplemental Coverage Option (SCO) is available only for acres elected into PLC, not ARC-CO or ARC-IC, and farmers need to consider the potential tradeoffs of buying SCO and crop insurance Enhanced Coverage Option (ECO) when making their decision.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

This article is a follow up to the farmdoc daily article of December 9, 2021. It discussed a price ratio that had an 81% accuracy in predicting if ARC-CO (Agriculture Risk Coverage – county) or PLC (Price Loss Coverage) paid more per base acre over the 2014-2020 crop years. The price ratio was calculated as: (the current crop year’s US December cash price divided by the upcoming crop year’s effective reference price) (hereafter, December cash – reference price ratio). This ratio is calculated for the upcoming 2022 crop year. The 2022 program decision must be made by March 15, 2022. 2022 Decision Commodity program options are ARC-CO, PLC, and ARC-IC, a farm version of ARC. For most farms, the decision is ACR-CO or PLC. ARC-IC’s highest share of US base acres was 3.9% during the 2019 and 2020 crop years. The proposed ARC-CO vs. PLC decision indicator is that PLC is expected to pay more per base acre when the December cash – reference price ratio is less than 100%. ARC-CO is ...

Source: Agfax