Ag Risk and Price Loss Coverage enrollments that were created under the Farm Bill are now open, but smart producers will wait to decide which one to pick.

The coverages include both the 2019 and 2020 crop year, but do not have to be selected until March 2020. That gives producers lots of time for more clarity on prices and yields, according to Andrew Swenson, NDSU Extension farm management specialist.

Both types of insurance will use 2019 national marketing year average prices. These are updated each month based on actual sales, thus becoming more accurate as time goes by.

“For wheat and oats, for example, the marketing year is June 1, so you will have June, July, August, September, October, November, December, January and February — you are going to have about nine months of the 12-month marketing year,” Swenson explained. “So that should give you a good feel for what the price would be, unless there’s a huge swing in the last three months.”

The corn and soybean marketing year starts much later, on Sept. 1, 2019, and runs through Aug. 31, 2020. There will thus be less market data available for making that selection, but there will still be a significant amount.

The ARC-County program, meanwhile, will also use 2019 county average yields in addition to marketing year average prices to determine payments for the 2019 crop year.

Yield figures will primarily come from the Risk Management Agency this time around, instead of the National Agricultural Statistics Service or NASS.

While those won’t be available until late in the game, NASS county yield surveys for 2019 crops of wheat, barley and oats will be available by mid-December, and the corn, soybeans and sunflower yields will be available by Feb. 2020.

Those will be a good indicator of yields, Swenson said, as will simply discussing things with fellow producers in a given county. That should help in determining whether to choose ARC or PLC.

On the other hand, those producers who want to use the ARC-individual over the ARC-county option, will have the largest information advantage, since ARC-individual payments are determined by farm-level yields. Producers interested in that option will be able to determine 2019 crop year payments, if any, well before the signup decision deadline.

Swenson said low prices mean most producers will probably be best served by PLC. coverage, but there are a few potential exceptions he is monitoring. One of these is soybeans.

“That is still in question which one will be best for that crop,” Swenson said.

He is planning to provide an online tool for producers to sort through their options based on their individual data soon. It will be made available once county benchmark yields are available for the 2019 crop year.

“One of the things that is tough and that is, say 2019 is a really tough year, and the low prices would trigger a PLC payment that would be decent on (various crops),” Swenson said. “You need the cash flow now to pay off the bills associated with 2019. You have to pay off those operating loans, but you won’t get the payments until late 2020.”

That is simply a structural issue with the safety net, that is impossible to avoid.

“This is a safety net for low prices or for low revenue based on yield and price, but you have to wait until the marketing year is done to find out what the final price will be,” he said. “You might need the money now if you had a bad year in 2019, but the payments are basically not going to be made until October through December of the following year. That’s just the nature of the beast.”

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