March 15. That’s the deadline for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. So how do you know which one is best for your farm? Well it may be a case by case scenario but the Renk Agribusiness Institute has some recommendations.
1. High Interest Rates:
One of the pressing concerns raised by farmers is the surge in interest rates. Many are experiencing interest rates as high as seven to eight percent, a situation that is causing apprehension within the community. However, there is optimism on the horizon.
“Inflation appears to be under control, and there are indications that the Federal Reserve might intervene to bring down interest rates in the near future,” explains Paul Mitchell, director of the Renk Agribusiness Institute. “The key question remains: when will this adjustment happen, and to what extent?”
2. Economic Outlook:
Addressing the broader economic concerns, farmers are eager to know whether there will be a soft landing for the economy or if a recession is imminent. Mitchell expresses cautious optimism, suggesting that while economists debate the likelihood of a recession, it is uncertain.
3. ARC vs. PLC Recommendations:
Mitchell recommends ARC for all crops at present, citing its effectiveness in managing prices. He says the upcoming USDA price forecast for 2024 in mid-February might influence his recommendations, so farmers are encouraged to remain patient, consider market information, and make decisions by March 15th.
4. Separating Government Payments and Crop Insurance:
Mitchell advised keeping them separate, as ARC and PLC payments occur a year later, while crop insurance focuses on the current year. The technicalities of farm-specific factors, such as yield history and county performance, play a crucial role in decision-making.
