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The information below was provided by the Andrew County FSA office.

This is one of two posts related to the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs authorized under the 2014 Farm Bill. An election to participate in ARC and / or PLC must be made between November 17, 2014 and March 31, 2015. In this post, the Price Loss Coverage Option will be discussed.

Price Loss Coverage (PLC)


PLC is a price protection program similar to the previous counter-cyclical program in that if the marketing year price is below the established reference price, payments will be issued. Payments are made on base acres and PLC is not dependent upon what is actually planted on the farm. The decision to elect PLC is made at the base crop level on each farm.

Payments are issued when the effective price of a covered commodity is less than the respective reference price for that commodity established in the statute for 2014-2018 crops. The effective price equals the higher of the market year average price or the national average loan rate. The PLC payment is equal to 85 percent of the base acres of the covered commodity, times the difference between the reference price and the effective price, times the PLC payment yield for the covered commodity.

PLC is the default program. If an election is not made to participate in either ARC or PLC by March 31, 2015, the crops on the farm will default to the PLC. Any farm that is elected into PLC by default will not be eligible to enroll for the 2014 year and will not be eligible for a 2014 payment.

The following is information applicable to base acre crops in Andrew County:

PLC Base Acres Chart Andrew County

Basic Example:

PLC Basic Example Andrew County

Payment Calculation:
Payment acres (base acres x 85%)
times
PLC Yield
times
Payment Rate (difference between effective price and reference price)
100 x 85% x 145 x $0.20 = $2,465
*used for example purposes, marketing year average price not published until September 2015.

**owner elected to update counter cyclical yield using 2008-2012 planting period.

Available Resources


Online tools are available at www.fsa.usda.gov to assist owners and producers with the decision making process. To view these tools, select “Programs and Services” and then select “ARC/PLC Program”. Once on the page, there are multiple resources under the “I want to heading” and also two web tools designed to allow owners and producers to run various scenarios on their own individual farm to assist with the decision making process.

In relation to PLC, USDA price projections can be found at this website.

Producers are encouraged to run one or both of the web tools to assist with the decision making process.
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