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U of I analyst advises Peoria farm bureau crowd

 

BY TIM ALEXANDER

Illinois Correspondent

 

PEORIA, Ill. — USDA Farm Service Agency (FSA) staff are anxious for farmers to declare their 2019 coverage programs in advance of USDA’s Feb. 20 county yield update, due to expected service delays for later filers. Farmers attending a recent presentation on ARC (Agricultural Risk Coverage) and PLC (Price Loss Coverage) programs at the Peoria County Farm Bureau auditorium came looking for advice from Krista Swanson, research specialist for the Gardner Agricultural Policy Program at the University of Illinois with a master’s degree in agricultural economics. “

“Some things to keep in mind include that there are not likely to be PLC payments for corn in 2019. There will also likely not be ARC-County (CO) payments. Some counties in southern and northern Illinois might trigger some payments for ARC-CO soybeans, but for corn, look ahead to 2020 when it is probable that corn could trigger PLC payments,” Swanson said. “Soybeans are also not likely to trigger PLC payments for 2019, or ARC-CO payments. However, there are likely to be more counties in Illinois that due get ARC-CO payments for soybeans than get them for corn.”

Swanson projects that payments will be made on 2019 wheat enrolled in PLC. “It would take major, major movement downward on price to keep that from happening. A lot of counties are also making ARC-CO payments but PLC payments are higher for wheat,” said Swanson, a Knox County farmer who has also worked with 1st Farm Credit Services and Farm Business Farm Management.

Swanson told the Peoria County farmers that they have a yield update option available for the PLC program available this year. “This is an option you don’t get all the time. The 2018 Farm Bill allows you to update your PLC program yields,” she said.

“You may be thinking that this is not important to you if you don’t take PLC, but it is important because right now yield is only being used in the PLC program. It’s not even coming into play in ARC-CO. Even if you are not choosing PLC now, you might want to consider it in the next couple years before a new farm bill removes this option.”

Farmers who have the ability to raise their PLC yields should definitely consider the program, Swanson advised. The deadline for this decision does not arrive until September, she said. 

Farmers who enrolled entire farm fields in prevent plant last summer could benefit from a little-utilized FSA program for 2019, Swanson noted: ARC-Individual (IN) coverage.

“Depending on your farm’s situation (ARC-IN) could be a good option for you this year,” said Swanson, before detailing three important factors to help farmers factor if ARC-IN might be a good selection. “First, ARC-Individual coverage applies to an entire FSA farm. If you have 10 FSA farms in the state of Illinois and wanted to enroll two in ARC-Individual coverage, the acreage of the two would be averaged together to determine the payment for both farms, so this program works differently than ARC-CO or PLC. It combines all crops and all acres.

“Second, ARC-IN pays on only 65 percent of base acres. ARC-CO and PLC both pay on 85 percent of base acres. However, if you have an FSA farm that was entirely in prevent plant, this program will make a payment for 2019. ARC-CO and PLC will not make payments on prevent plant acres.

“Finally this decision carries through 2020 as well. The question is do you take a sure payment from (2019), and then know that your ARC-IN choice will carry through (2020) as well? It is something to consider if you have a lot of prevent plant acreage, or even if you have significantly lower yields than your APH history.”

Swanson concluded by urging farmers to make an appointment to share their ARC-PLC decisions with their FSA agent as soon as possible. “I am hearing from FSA staff that they really want you to come in and start taking care of this. They haven’t had a lot of action yet, and they want you to make your appointment so they can provide you with the service you need,” she said.

“And don’t miss this signup date. If you don’t sign up, you will forfeit any potential 2019 payments and default to the program you had last time.”

Only a little more than 200,000 of an anticipated 1.5 million U.S. producers had enrolled in ARC or PLC coverage as of Jan. 15, according to the USDA. “FSA offices have multiple programs competing for the time and attention of our staff,” said FSA Administrator Richard Fordyce, in a USDA news release. “Because of the importance and complexities of the ARC and PLC programs, and to ensure we meet your program delivery expectations, please do not wait to start the enrollment process.”

The University of Illinois has developed a downloadable ARC-PLC calculator online at www.fdtools.ncsa.illinois.edu. An ARC-IN analysis tool is featured on the calculator. 

2/14/2020