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The last time you could update those yields was in 2014. Those yields are used to calculate payments you might receive through the Price Loss Coverage (PLC) program. Any higher yields will apply to 2020 crop years and beyond.
The 2018 Farm Bill gives landowners a one-time opportunity to update their payment yield, which will take effect starting with the 2020/2021 crop year. Payment yield, or commonly called PLC yield, is the established yield of the farm and is used when determining Price Loss Coverage (PLC) payments.
The ARC Program is an income support program that provides payments when actual crop revenue declines below a specified guarantee level. The PLC Program provides income support payments when the effective price for a covered commodity falls below its effective reference price.
In contrast, given current price levels, PLC likely has a higher chance of payment and higher expected payment for 2020. Soybeans: PLC is not expected to make payments in 2019. There is a chance that ARC-CO will make payments in 2019 for more counties.
As yields enter into the calculation of revenue, ARC-CO will provide yield protection. PLC offers only price protection. It will make payments when MYA price is below the effective reference price. Farmers seeking revenue protection likely will prefer ARC-CO while farmers seeking price protection will prefer PLC.
The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs were authorized by the 2014 and 2018 Farm Bills. The ARC-CO program provides income support tied to historical base acres, not current production, of covered commodities.
ARC-CO payments are issued when the actual county crop revenue is less than the ARC-CO guarantee for the covered commodity. PLC program payments are issued when the effective price of a covered commodity is less than the respective reference price for that commodity.
Program payments for 2018 ARC-CO coverage will be issued this year and farmers are eligible to enroll for 2019 ARC-CO coverage through March 15, 2020. Payments for 2019 ARC-CO coverage will be delivered in late 2020, after the close of the marketing year.
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