Program Election Resources: 2022/23
The program election, that must be made by March 15, 2022, will use the 2022/23 Marketing Year. For Wheat that begins June 1, 2022 and for Fall Crops, September 1, 2022. This election will be made without having any months of data on actual crop prices for the 2022/23 marketing year. The price projections, made for 22/23, are made with low confidence
21/22 MYA Price Estimates Updated for ARC and PLC Commodity Programs
Projections and Sources of MYA Prices for ARC and PLC Commodity Programs for 2021/2022 and 2022/2023
Price Loss Coverage (PLC)
Payments in this program are made when the marketing year average (MYA) price, for the crop in PLC, falls below the Effective Reference Price. The amount paid per acre is the difference between the Effective Reference Price and the MYA price of the crop for that program year, multiplied by your PLC Yield. This program pays on 85% base acres. As a result of this program using your PLC Yields, your payment rate would not be affected by a low yielding or high yielding year. It is strictly a low price program. Whereas, ARC-CO is a low revenue program, so county yields and MYA crop price are factors.
For wheat, the Effective Reference Price is $5.50. If the MYA price is $4.90, the payment would be $0.60 multiplied by your PLC Yield. Say for wheat your PLC Yield is 40 bu/ac, your payment would be $0.90 x 40 = $36/acre. That $36/acre would be paid on 85% of your base acreage in wheat. If you had 150 base acres in wheat then your total payment for wheat would be: $36/ac x 150 ac x .85 = $4,590.
Wheat's marketing year, for the 2021 program year, runs from June 1, 2021 to May 31, 2022. Fall crops' marketing years, for 2021, go from September 1, 2021 to August 31, 2022.
2021 Effective Reference Price Calculations - This farm bill gave the opportunity for the Effective Reference Price to increase up to 115% of the set statutory price. The statutory price is the basement for the reference price. It cannot go below this. To calculate the effective reference price. An Olympic average is taken of MYA prices from 2015-2019 and multiplied by 85%. If that number is above the statutory price, the effective reference price increases (up to 115% statutory.) Unfortunately, reference prices will remain at the set statutory prices, but if you want to see the numbers, here they are)
Agricultural Risk Coverage - County (ARC-CO)
This program pays when the actual revenue for a county drops below a Guaranteed Revenue. Once the Benchmark Yield and Price are calculated, they are multiplied by each other to come up with the Benchmark Revenue. This Revenue is then used to calculate the Guaranteed Revenue. Multiplying the Benchmark Revenue by 86% gives you the Guaranteed Revenue. If Actual Revenue falls below the Guarantee, payments are triggered for this program. The Actual Revenue comes from the county average yield for the year and the national marketing year average for the crop. This program pays on 85% of base acres and per acre payments cap out at 10% of the Benchmark Revenue.
If the Benchmark Revenue was $500/acre, the payment cap would be $50/acre. Otherwise, payments are based on the difference between Guaranteed Revenue and Actual Revenue.
Sticking with $500/acre for the Benchmark. Guaranteed Revenue would be $430. If Actual Revenue was $400, payments would be $30/ acre. If Actual Revenue was $300, the payment cap kicks in and payments would be $50/acre. If Actual Revenue was $431, it would exceed the Guaranteed Revenue and there would be no payment.
Sedgwick County ARC-CO Info + Maximum Average County Yield with Payment at Projected Prices - This document contains Benchmark Price, Benchmark Yield, Benchmark Revenue, Guaranteed Revenue, and ARC-CO Cap for Sedgwick County. The next two documents will show how these factors are calculated. In the second chart of this document, it shows the highest county average yield, at the listed projected price, that would receive an ARC-CO payment. The listed projected price is the average of KSU, FAPRI, and WASDE's projections.
Benchmark Yield and Guarantee Revenues - This form shows how the Benchmark Yields and Benchmark Revenues are calculated. The Benchmark Yield is calculated by taking an Olympic Average of county yields from years 2015-2019.
Benchmark Price Calculations - This form shows how the Benchmark Price is calculated. The Benchmark Price is used to establish the Benchmark Revenue. The Benchmark Price is calculated by taking an Olympic average of MYA prices from 2015-2019. In the ARC-CO program, years where the MYA price fell below the 2021 Effective Reference Price are replaced by the Effective Reference Price. Years where this substitution occurred are grayed out.
2019 ARC-CO Payment Calculation
1. Benchmark Price can be found in column K of Benchmark Price Calculations 2. Benchmark Yield can be found in column A of Benchmark Yield and Guarantee Revenues
Kansas 2021 ARC-CO Benchmark Yields and Revenue - This Excel program has the Benchmark Yields and Revenues for each county and crop in Kansas. The pdf, Benchmark Yield and Guarantee Revenues above, was taken from this program.
2015/16 - 2020/21 Market Year Average (MYA) Prices
Nov 6 2019 - SG Co Extension Presentation