NASHVILLE, TENN (RFD-TV) — Farmers often ask why ARC and PLC matter when recent payments have been small compared to crop insurance. According to Dr. Joe Outlaw, Co-Director of the Agricultural and Food Policy Center at Texas A&M University, the question comes up frequently, and the answer is that the safety net was never designed to rely on a single program.
Instead, it rests on three coordinated parts: ARC/PLC, marketing assistance loans, and crop insurance. Each rises or falls in usefulness depending on prices, costs, and market cycles. While ARC and PLC have not kept pace with recent losses driven by low commodity prices and record-high input costs, marketing loans continue to help producers manage cash flow at harvest, and crop insurance — especially revenue protection — has remained the most consistently valuable tool in the downturn.
Outlaw notes that this balance will shift. The One Big Beautiful Bill significantly raises reference prices for ARC and PLC and strengthens ARC’s triggers, enabling payments to arrive sooner and cover larger potential shortfalls. Those changes boost the value of both programs going forward. At the same time, in today’s low-price environment, crop insurance becomes less effective because insurance guarantees are tied directly to futures prices during the discovery month. Losses are still covered, but indemnities will be based on much lower price levels than in recent years, even as production costs stay high.
Looking ahead, Outlaw says rising market prices would increase crop insurance guarantees but reduce the odds of ARC or PLC payments. Marketing loans would continue providing harvest-time flexibility when producers need cash but want to avoid selling into the seasonal low. In that environment, each part of the safety net plays a different role. None can replace the others, and no single program is built for all conditions, which is why the safety net was designed to work as a set.
Farm-Level Takeaway: ARC/PLC, marketing loans, and crop insurance each matter at different points in the price cycle — and the new Farm Bill strengthens the balance among them.
Tony St. James, RFD-TV Market Specialist
In honor of Veterans Day this weekend, we wanted to take a moment to highlight an incredible program connecting our great nation’s heroes with agriculture!
November 08, 2023 01:54 PM
·
Agriculture Accounting Expert Paul Neiffer joined us Friday on Market Day Report to take a further look.
November 03, 2023 12:51 PM
·
Falling feed costs and strong demand for butter could be good news for dairy farmers looking to get their finances back on track.
November 03, 2023 12:38 PM
·
As I try to catch up on my writing after being on the road for a lengthy time, I have several recurring themes in my legal work. Another potpourri of random ag law and tax issues — that is the topic of today’s Firm to Farm blog post by RFD-TV Agrilegal Expert Roger McEowen.
October 31, 2023 02:21 PM
·
Many turn to the online resale market when economic times are uncertain, buying items for cheaper prices or selling quality items for extra money. Reselling secondhand items is also an efficient way to declutter and get some cash back for valuable items you no longer need.
October 13, 2023 04:57 PM
·
With 2023 projected to be a difficult year for agricultural producers, Chapter 12 filings may increase. One of the requirements to get a Chapter 12 reorganization plan approved is that be filed in “good faith.” In this blog post, RFD-TV Legal Contributor Roger A. McEowen explains exactly what farmers need to know about the process.
October 04, 2023 02:57 PM
·
The failure of a grain elevator can cause large problems for farmers and for the local community it serves. A farmer who knows their rights and where they stand if an elevator fails can be in a better position than those farmers who aren’t as well informed. That is the topic of today’s blog post by RFD-TV Legal Contributor Roger A. McEowen.
October 04, 2023 02:46 PM
·
Financial matters in farming can be frustratingly complicated, especially when it comes to the process of filing for bankruptcy. That is the topic tackled in today’s blog post by Farm-Legal Expert Roger A. McEowen—the definition of “insolvency” for purposes of the exclusion from income of CODI.
October 04, 2023 02:14 PM
·
The “farm products rule,” and the 1985 Farm Bill modification and its application – that is the topic of today’s blog post from Agri-Legal Expert Roger McEowen.
October 03, 2023 02:43 PM
·
