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My AE encouraged me to post this for discussion. I know everyone who had 100% prevent plant farms were encouraged to sign up for ARC-IC, but I had also read articles that stated instances when ARC-IC could be considered – specifically 100% prevent plant or low yields.
We had few prevent plan acres – but planted fields had terrible yields (1 farms had 2 / 5 fields total loss (zero’d out oats), 2 / 5 yielded 20-30 bu soybeans, and 1 field of OK-ish corn – so I investigated ARC-IC for that farm only until I realized we needed to consider it for all our farms.
Local FSA had educational meetings and online calculator tools links given. I enclosed a a link to download the updated calculator of University of Illinois - I used this one for PLC, ARC-CO, and ARC-IC.
A word of warning – the ARC-IC calculator looks extremely daunting – and it is. I was able to obtain the correct info needed from FSA (FSA-156EZ Abbreviated 156 Farm Record) and crop insurance (the official 2019 yield/acres on file and CCC-867 Yield update for PLC (which is the same form your agent will need to pull together eventually if you intend to update your PLC later this year). You can also do your own calculations using the MCPI Production Reporting Form from Crop Insurance.
I enclosed pictures of 3 farm ARC-IC calculation plus my spreadsheet summarizing the ARC-CO and PLC projections for Brule County SD – but I changed our actual data to fictional values that produced the exact same expected payments (I hope that makes sense).
The long and short is that (for us – due to terrible yields) going ARC-IC for ALL of our farms yielded potential payments 3 times larger than any combination of PLC and/or ARC-CO.
I do not want to stir up controversy and I am not implying anyone should make the same decision that we made. I am just passing along the information I discovered so others can consider all options before committing to their govt program.
A word of caution that we received from our FSA agents – you must be aware that farms signed in ARC-IC will stay that way for 2019-2020. So if you plant even 1 acre on an ARC-IC farm and all the rest is prevent plant – your revenue calculation will be made on that single acre – meaning you could end up with 0 payment if that single acre yields above your historical and the MYA price is decent. I have come to terms with this risk by repeating my mantra …. “a bird in the hand…”
Caution Before you use the calculator * I am EXTREMELY detailed and mathematical. I did not trust the calculator – so I researched USDA website for EXACTLY how the payments are calculated. Then I did all calculations by hand to recheck the U of Illinois values. There is an issue with the “arc-ic” calculator (5th tab from left) but the “arc-ic-multi” (6th from left) works fine and agrees with manual calculations. I welcome verification of my calculations.
Article about working the calculator:
Download calculator:
https://farmdoc.illinois.edu/2018-farm-bill
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Yes, I agree. We have 5 farms where arc-ic seems to be the right choice and 3 where arc-co or plc would most likely pay out better. Each operation will be different based on past yield history.
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