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Strategies for Using ARC-IC

Strategies for Using ARC-IC

: https://farmdocdaily.illinois.edu/2020/02/strategies-for-using-arc-ic.html

 

Here is an excerpt:

“ . . . . . . . ARC-IC payments likely will be made on the following FSA farms:

  • An FSA farm that was completely prevented plant.  If the entire farm is prevented plant, the maximum ARC-IC payment will be received on that FSA farm if enrolled separately.  Those payments could be in the range of $40 to $50 per base acre over much of Illinois.  Note that all crops on the entire FSA farm must be prevented plant.  If any planting of any crops occurs, revenue from planted acres will determine ARC-IC payments.  If a farm took prevented plant on corn but planted soybeans, revenue from soybean acres will determine if there is an ARC-IC payment.
  • An FSA farm has lower yields.  One judgment of whether ARC-IC may make a payment is whether a farm received crop insurance payments on Revenue Protection (RP) or other COMBO products.  If crop insurance payments are being received, there is a good chance of ARC-IC payments.  In Illinois, many farms with 180 bushel corn yields and 50 bushel soybean yields will trigger payments. Be sure to note that FSA farm may be different from insurance unit and may also be different from operational farm. Keep in mind that farm program decisions are made by FSA farm.

Special Circumstances for 2019

Farmers must make their 2019 and 2020 commodity title choices by March 15, 2020, with the same commodity title choice applying to both years.  This sign-up period provides special opportunities to know more about 2019 ARC-IC payments than will exist in future years.  For 2019, ARC-IC makes payments when 2019 farm revenue is below a farm guarantee (see farmdoc dailyFebruary 4, 2020January 7, 2020, and October 29, 2019 for more information on ARC-IC).  The farm guarantee is known because it is based on farm yields and prices from 2013 through 2017.  Farm revenue equals 2019 farm yields times 2019 market year average (MYA) prices.  At this point, farm yields for 2019 are known.  Only 2019 MYA prices are not known, but reasonable estimates of these prices are available.  In February, USDA estimated 2019 MYA prices at $3.85 per bushel for corn, $8.75 per bushel for soybeans, and $4.55 per bushel for wheat.  With these MYA prices, estimates of ARC-IC payments can be obtained.”

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