Deadline nears on key ARC, PLC decision

HALLOCK, Minn. -- Kelly Turgeon is on the stretch run of a half-year marathon.

Turgeon, executive director of the Kittson County (Minn.) Farm Service Agency, an arm of the U.S. Department of Agriculture, is working to help farmers meet a crucial March 31 deadline. They're choosing between two important safety-net provisions in the federal farm bill, and their irrevocable decision will impact their bottom line for the next five years.

"It's an important decision. We (FSA) want to do everything we can," says Turgeon, who first received training on the farm bill provisions last fall.

His ongoing efforts to help farmers included an informational meeting with producers on March 24 in Hallock, Minn. Ten producers attended, as did Agweek.

With a big assist from the FSA, the extension service, crop insurance agents and others, a final wave of farmers across the country must choose between Agricultural Risk Coverage (ARC), which protects against falling revenue, and Price Loss Coverage (PLC), which provides payments when crop prices fall. To complicate matters, ARC comes in two versions: the county level (ARC-County) and the individual producer/farm level (ARC-Individual or ARC-IC.)

The choice affects the 2014 through 2018 crop years.

If a decision isn't made by March 31, a farmer won't receive a 2014 crop-year payment for the farm and the farm will default to PLC coverage through the 2018 crop year.

"As sure as I'm standing here, there will be people who don't make the deadline," Turgeon says.

Crops covered by the two options include canola, corn, crambe, flax, grain sorghum, lentils, mustard, oats, dry peas, rapeseed, safflower, soybeans, sunflower and wheat. All are grown in the Upper Midwest, with the Dakotas, Montana and Minnesota among the nation's top producers of most of them.

How many are left?

It's unclear how many farmers have yet to sign up for the safety-net options. Numbers, which vary from county to county, are changing by the hour as more farmers fill out the necessary paperwork. To further cloud matters, FSA tracks farm units, which reflects land ownership past and present, and many farmers, especially in the Upper Midwest, operate multiple farm units. So the number of farm units signed up for ARC or PLC don't necessarily give a good indication of how many farmers have made their decision.

In any case, Kittson County, in northwest Minnesota, appears to have an unusually large number of farmers who haven't signed up, leading the county FSA to hold the March 24 meeting, Turgeon says.

Soybeans are an important crop in Kittson County, and 2014 soybeans yields there were hurt by bad weather. That complicates the ARC or PLC decision, he says.

Farmers and others in the Dakotas, Minnesota and Montana tell Agweek that ARC-County generally appears the better choice for corn and soybeans, with PLC and ARC-County holding split appeal for wheat. Corn, soybeans and wheat are the region's three major crops.

By all accounts, however, the best option varies from county to county, township to township and even farm to farm, depending on each farmer's individual situation.

The one-page sign-up form for ARC and PLC is itself straightforward and simple. It requires only a signature, a few checkmarks and some basic information such as telephone number and email address.

A big challenge

But learning enough to make the best choice on the sign-up form is challenging, to say the least.

First, producers must sift through a mass of terminology and statistics. One example of the former: Important definitions connected to the options include benchmark revenue, weighted farm benchmark revenue, annual revenue and actual year revenue, among others.

The statistics, involving yields and prices of previous years, are even more complicated.

"There's so much paperwork," says Curtiss Johnson, a Kennedy, Minn., farmer who attended the March 24 meeting Hallock with his grandson, Spencer Johnson, a Karlstad, Minn., producer.

Online tools, developed by the extension service, make statistical analysis a little easier, farmers and others say.

But the core of the ARC vs. PLC dilemma is trying to predict future prices and yields. Those predictions play a huge, unavoidable role in determining which option is better.

"You just can't know what's going to happen with them, so you just can't know which (ARC or PLC) will be better," Spencer Johnson says.

Several farmers at the March 24 meeting in Hallock mentioned the confusion and frustration brought on by the uncertainty.

ARC and PLC, created by the farm bill approved in early 2014, give farmers more options, which, despite the complexity, is a good thing, Turgeon says.

Turgeon, who's participated in 15 ARC/PLC informational meetings for farmers, says that he can't tell producers what to do.

But he stresses that FSA will do what it can help to help farmers make the best choice with their down-to-the-wire decision.

And he tells of farmers who make their choice and accept they can't control the outcome.

"I've had people come in and say they've made their decision. They sign the paper and say they're not worrying about this until 2019," Turgeon says. "They're at peace about it."