Farm Bill ACR/PLC update for Michigan — near crunch time!

 

There has been a lot going on in the Farm Bill ARC/PLC Decision Space, according to Roger Betz, Michigan State University Extension farm business management, and Jim Hilker, MSU commodity marketing specialist. Below is a list of the thought process for Michigan producers to make the best financial decisions for their farms.

 

“I had a producer today tell me the decision is over a $50,000 difference from what he thought he was going to do until he dove into the program to figure things out,” Betz reported. “The producer told me, ‘This is critical no matter what size of farmer you are.’”

 

MSU Extension’s Farm Information Resource Management (FIRM) team has developed several webinars for producers that explain these Farm Bill changes and the steps producers must take in order to realize the full benefits available to them. These webinars are available at the MSU Extension Farm Bill website.

 

We now have a better understanding of how ARC-IC works. For example, if there is a Farm Service Agency (FSA) farm that is considered 100% prevent planted (no FSA program crops actually planted and does have program crops designated as prevent plant), then the zero revenue from this farm or farms can be combined with other FSA farms that have low yields or maybe even average yields and increase total program benefits. This is especially true with the combination of large 100% prevent plant farms with other farms that had only a few acres actually planted because only the planted acres are used in the weighting with the farms that are 100% prevent planted. This situation is very dependent on the county. A county that has average or good yields will not have payments for ARC-CO and therefore ARC-IC will likely be more favorable in those counties. ARC-IC is money in the hand versus speculation on PLC money next year, even if likely.

 

National Agricultural Statistics Service (NASS) 2019 yield estimates were released Thursday, Feb 20, 2020. Many counties have low soybean yields, along with soybean prices also being down, where ARC-CO will pay for the 2019 year. In compliance with this, MSU Extension’s ARC vs. PLC Calculator has been updated to version 6.50, with the NASS estimated yields entered as the default yields for the 2019 year. This most current calculator can now handle up to 50 FSA farm numbers at one time to calculate the combined ARC-IC estimated payments compared to ARC-CO and PLC combinations. Betz emphasizes that it’s vital for producers to use this most current version of the ARC vs. PLC Calculator.

 

MSU Extension field staff across the state are getting calls from producers seeking assistance in determining the best decision for their farm. Time is running out. Please contact your local MSU Extension office to request assistance in making the best financial decision for your farm with the most current information available at this time.

 

Betz and Hilker provide the general guidelines outlined in Table 1 for helping producers make the best program choices for their farms. Eaton County is a very difficult decision because of the NASS low soybean yield (max ARC-CO payment), low corn yield (some ARC-CO payment) and a bunch of 100% prevent plant farms. All three are close, where a relative change in base acres or even a PLC yield can make a difference in the current best choice. Wheat base relative to corn base relative to soybean base can change the decision from one farm to another or the decision to combine farms under ACR-IC.