Cornhusker Economics: An Illustration of Farm Program Decisions and Impacts

Cornhusker Economics: An Illustration of Farm Program Decisions and Impacts

When the 2018 Farm Bill was signed last December, producers could look ahead to implementation and the coming decision between enrollment under the Agricultural Risk Coverage (ARC) program or the Price Loss Coverage (PLC) program. While the ARC and PLC programs were carried over from the 2014 Farm Bill with relatively modest changes, the substantial drop in market prices and outlook since 2014 pointed toward a widespread shift in enrollment away from ARC and toward PLC due to the increased relevance of the price safety net.

However, with this year’s extreme weather events, concerns over crop production, and hopes for improved trade prospects, there has been some recovery in commodity prices, at least as reflected in the October supply and demand reports from USDA. That could affect expected farm program supports or even eliminate them if higher prices were sustained through the marketing year. That, in turn, could affect producer preferences between the revenue-based support of ARC and the price-based support of PLC by the time the initial enrollment decision is due in March 2020.

Read More in the October 23, 2019 Cornhusker Economics, published by the Department of Agricultural Economics.