2022 commodity program decision: ARC-CO – PLC decision indicator in the USA
Peanut Kernel
Soybean
Published Feb 26, 2022
Tridge summary
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).
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 ...
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