March 15 is the deadline to sign-up for the 2024 farm program at local USDA Farm Service Agency (FSA) offices throughout the United States. Eligible producers are able to choose between the price-only “Price Loss Coverage” (PLC) and revenue-based “Ag Risk Coverage” (ARC) program choices. The ARC program choice includes both the county-yield based ARC-CO program choice and the ARC-IC program, which is based on farm-level yields.

Following are some of the common questions that have been raised regarding 2024 farm program sign-up and some potential answers:

Do I need to sign-up for the 2024 farm program if I do not intend to change my PLC or ARC-CO choice from 2023?
Based on FSA guidelines and requirements, farm units will automatically remain with the same farm program option as 2023 if no farm program choice is made for 2024; however, producers would still need to enroll in the 2024 farm program by March 15, 2024, to remain eligible for program benefits. Farm operators need to complete the proper FSA forms to finalize both steps in the farm program enrollment process.

• Given the current price trends, what is my best 2024 farm program choice for corn?
The odds of receiving either a PLC or ARC-CO payment for the 2024 crop year are improved due to higher benchmark and reference prices. The 2024 benchmark (BM) price for corn is $4.85 per bushel, while the 2024 PLC reference price is $4.01 per bushel. PLC payments begin at a final MYA price below $4.01 per bushel, while potential 2024 ARC-CO payments are dependent on final 2024 county average yields. At a final 2024 MYA price of $4.85 per bushel, the 2023 county yield would need to be 15 percent or more below the BM yield to initiate an ARC-CO payment. For example, if the county BM yield is 200 bushels per acre the county yield needs to be 170 bushels per acre or lower for a 2024 ARC-CO payment. If the final 2024 county average yield is 4 percent above the BM yield, both ARC-CO and PLC payments would be initiated below $4.01 per bushel.

The final corn MYA price from 2014-2019 was below $4.01 per bushel and resulted in corn PLC payments from 2015-2019. The recent MYA prices were $4.53/bu. in 2020, $6.00/bu. in 2021, and $6.54/bu. in 2022. The current 2023 MYA corn price estimate is $4.80/bu., which would be very near the 2024 benchmark price of $4.85/bu. The PLC program for 2024 will also provide added corn price protection with potential PLC payments extending from $4.01 down to $2.20 per bushel.

• How do the current price trends affect the farm program decision for soybeans?
The 2024 soybean benchmark price is $11.12 per bushel and the 2024 reference price is $9.26 per bushel. The MYA price needs to drop below $9.26 per bushel to initiate 2024 PLC payments. The only time that the MYA price has ever dropped below $9.26 per bushel was in the 2018 and 2019 marketing years, which were during the “trade war” with China. There has never been a soybean PLC payment since the PLC program was initiated in 2014.

At a final MYA price of $11.12/bu., the final county yield for 2024 will need to be 15 percent or more below the 2024 county benchmark yield to initiate a 2024 soybean ARC-CO payment, which equates to a 2024 county average yield decline of 7-10 bushels or more per acre in most counties. Given the current soybean price projections, the 2024 farm program choice probably leans toward ARC-CO in most instances; however, the odds of a 2024 ARC-CO payment be dependent on soybean price trends following the 2024 harvest season and the final 2024 MYA price, as well as the final 2024 county average yield.

• What about the farm program choice for wheat?
The 2024 PLC reference price remains at $5.50 per bushel, while the ARC-CO benchmark price for wheat increased to $6.21 per bushel for 2024. The final wheat MYA price was below $5.50 per bushel from 2015- 2020, with substantial PLC payments earned in many of those years; however, the 2021 MYA price was $7.63/bu., the 2022 MYA price was $8.83/bu. and the current projected 2023 MYA price is $7.20/bu. Generally, wheat producers have tended to favor the PLC program over the ARC-CO program due to the favorable PLC payments from 2014 to 2020; however, the higher ARC-CO benchmark price for 2024 makes the farm program decision more challenging.

Are there situations where ARC-IC might be a favorable farm program choice?
The ARC-IC program utilizes the same BM price and final MYA price as the ARC-CO program; however, ARC-IC is based on farm-level yields rather that the county BM and final yields. The ARC-IC program must be applied to all covered commodities on a given FSA farm unit, and all farm units in a State that are enrolled in ARC-IC are considered together in one ARC-IC calculation. In addition, ARC-IC payments are paid on only 65 percent of crop base acres, compared to payments on 85 percent of base acres for PLC and ARC-CO payments, which tends to limit instances where ARC-IC is a favorable farm program option. However, there may be situations on individual farm units that are being planted to a single crop in 2023 where ARC-IC might be a consideration, especially in areas that may be impacted by drought this year.

How is the “Market Year Average” (MYA) price determined?
All 2024 PLC and ARC-CO payments for corn and soybeans will be based on the market year average (MYA) price from September 1, 2024, through August 31, 2025, which means that the current price levels may not impact the final 2024 MYA prices. The MYA price is a monthly average farm-level price from throughout the U.S. that is “weighted” for the volume of bushels sold each month. The 2024 MYA price marketing year for wheat and small grains runs from June 1, 2024, through May 31. 2025.

• Does “Supplemental Coverage Option” (SCO) insurance coverage impact farm program decisions?
The SCO coverage is an “add-on” option to traditional Federal crop insurance that is only available with the PLC farm program choice and not with ARC-CO or ARC-IC. The federal government subsidizes 65% of the premium for SCO coverage, so farm-level premiums are quite reasonable, which may make SCO a viable option for producers that choose the PLC farm program option. SCO allows producers to purchase additional county-level crop insurance coverage up to a maximum of 86 percent coverage, so it can be a very attractive insurance option for producers that typically utilize 75 or 80 percent for their revenue protection (RP) crop insurance coverage. Check with a crop insurance agent for details on SCO insurance coverage.

Where can I find some good PLC/ARC-CO calculators to assist with the farm program decision? Following are links to some very good farm program calculators that allow for comparison of potential PLC and ARC-CO payments at various final 2024 MYA prices and various final 2024 county yields:

  • North Dakota State University — https://www.ag.ndsu.edu/farmmanagement/farm-bill
  • Kansas State University — http://www.agmanager.info/ag-policy/2018-farm-bill
  • University of Illinois FarmDoc website — https://farmdoc.illinois.edu/
  • Iowa State University — https://www.extension.iastate.edu/agdm/

• Are there some other good farm program resources?
For official information on PLC and ARC-CO programs, and other farm program details, go to the FSA farm program website at: www.fsa.usda.gov/arc-plc. For a listing of 2024 benchmark yields for all crops, refer to: https://www.fsa.usda.gov/programs-and-services/arcplc_program/arcplc-program-data/index. Kent Thiesse, Farm Management Analyst, has prepared an information sheet listing key points regarding the 2024 farm decision for corn, soybeans and wheat for the 2024 crop year. To receive a copy of the “2024 Farm Program Decision “Cheat Sheet”, send an email to: kentthiesse@gmail.com. ****************************************************************************************** Note — For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone — (507) 381-7960; E-mail — kentthiesse@gmail.com