One-time Election Needed for Farm Bill Programs
Neiffer: “ARC makes no payments until the price drops until $5.50 approximately. While the PLC kicks in at $5.50. So I think on wheat, I think most farmers are probably going to lean towards PLC for that reason. Because if wheat prices rally over the next few years — there probably isn’t going t be a payment because the prices rallied. You’ve got to remember ARC only kicks in if the price is 86 percent of the target price. Now if you have a bad yield, it could kick in. But the interesting thing is, that PLC kicks in at $5.50 and ARC only kicks in at $5.50 and PLC has no limit on the amount you can be paid per acre. While on ARC there is a limit — its 10 percent of your target revenue.”
If you are interested in reading Nieffer’s analysis using the average five-year market prices, go to Farm CPA Today.com.