Estimating 2016 ARC and PLC Payments For Covered Commodities

Estimating 2016 ARC and PLC Payments For Covered Commodities

by Don Shurley and Adam N. Rabinowitz

A PLC payment is issued when the MYA Price is less than the PLC Reference Price.  Estimates of the MYA Price are available during the crop marketing year and, while the final MYA Price may not be known, any estimated/projected PLC payment rate can be determined by comparing the projected MYA Price to the Reference Price.

An ARC Payment is issued when the Actual County Revenue for the crop is less than the ARC Revenue Guarantee for the crop—which is equal to 86% of the Benchmark Revenue.  While the Actual County Revenue may not be known until after the end of the marketing year for the crop, the Benchmark Revenue and Revenue Guarantee for the crop will be known.  Using the projected MYA price, a “Trigger Yield” can be determined.  It can be said with confidence that an ARC Payment will be issued if yield is less than the “Trigger Yield” and the projected MYA Price is realized.

Click here to view and download the publication AGECON-17-01 in PDF format.

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