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Deadline to sign up for ARC and PLC benefits is Mar. 15

Wisconsin State Farmer
FILE - In this Aug. 26, 2020 file photo, a farmer discs over a corn field on at a farm north of Woodward, Iowa. The corn was damaged beyond salvage by the recent derecho. Thanks to the government paying nearly 40% of their income, U.S. farmers are expected to end 2020 with higher profit than 2019 and the best net income in seven years, the Department of Agriculture said in its latest farm income forecast. Farmers faced challenges throughout 2020 that included the impact of trade disputes; low prices that drove down cash receipts and weather difficulties. (Bryon Houlgrave/The Des Moines Register via AP File)

Farmers have until Mar. 15, 2021 to sign up for this crop year's Agriculture Risk Coverage and Price Loss Coverage programs from the US Department of Agriculture.

Paul Mitchell, ag and applied economics professor at University of Wisconsin-Madison and extension specialist, recommends every farmer consider their coverage options with both programs. He said farmers who haven't looked into it yet should make an appointment with their local Farm Service Agency office as soon as possible.

The ARC program provides a guaranteed crop revenue based on county historical yields and national prices, provided by each local FSA office. Payments are triggered when the county revenue falls below the guaranteed price. Payments equal the revenue loss multiplied by 85% of the farm's base acres.

The PLC program creates a national price floor where payments are triggered if commodity prices drop below the reference price – $3.70 for corn, $8.40 for soybeans, $5.50 for wheat, and $2.40 for oats. When payments are triggered, the pay rate equals the farm's PLC yield, multiplied by price loss and 85% of the farm's base acres.

Coverage is flexible for farmers because they can choose to use one program for one crop or farm and another program for another crop or farm. Mitchell said these decisions should be made independently from crop insurance decisions due to differences in calculations; for instance, crop insurance uses current market prices to determine payments, while ARC and PLC use historical price averages. However, if you plan on buying Supplemental Coverage Option (SCO) through your crop insurance, you are required to purchase PLC as well. 

The University of Illinois provides a payment calculator to simulate payments based on level of coverage through ARC and PLC.