By Alejandro Plastina
Three new resources have been developed by Iowa State University Extension and Outreach to help Iowa corn and soybean producers calculate Agricultural Risk Coverage and Price Loss Coverage payments for the 2014 and 2015 crop years. Posted on Ag Decision Maker, these tools will help farmers who enroll in these programs from the 2014 Farm Bill calculate the amount of the government payment if prices and/or county revenues are down.
“Both the Agricultural Risk Coverage and Price Loss Coverage payments depend on the marketing year average or MYA prices for commodities such as barley, corn, grain sorghum, oats, soybeans and wheat.” said Alejandro Plastina, assistant professor and extension economics specialist with Iowa State University.
For corn and soybeans, the official 2014 MYA price will be announced by USDA in early September 2015. Until then, the actual amount of these payments will be unknown," Plastina said. "However, using county yields and price projections published by USDA, these payments for the 2014 and 2015 crop years can be reasonably projected by the new calculation tools.” The projected prices used in the ARC/PLC payment calculators will be updated monthly.
The Agricultural Risk Coverage (ARC-CO) program is based on county revenues and acts like a type of insurance for crop producers. When yields fall below a certain level, farmers who have selected this coverage, are paid the slight difference.
Price Loss Coverage (PLC) payments offer protection when the actual crop price drops below its ‘reference price’ for that commodity set in the 2014 Farm Bill. PLC payments occur if the MYA price is lower than the reference price: $3.70 per bushel of corn, and $8.40 per bushel of soybeans.
“If ARC/PLC payments are triggered for the 2014 crop year, they will be issued after the end of the marketing year when USDA announces the official MYA price, but not before Oct. 1, 2015,” said Plastina. “The 2015 crop year ARC/PLC payments won’t be verified until the fall of 2016.”
Source:iastate.edu