Farm bill

ARC-CO

Farm Service Agency abbreviates Agricultural Risk Coverage based on county yield as ARC-CO. ARC-CO protects 85 percent of commodity crop base acres using countywide yield and a national marketing year average (MYA) price to determine if payments are triggered. 

PLC

Farm Service Agency abbreviates Price Loss Coverage as PLC. PLC protects 85 percent of commodity crop base acres using a national marketing year average price and a predetermined effective reference price to determine if payments are triggered. If the payments are triggered, the difference between the effective reference price and the MYA is then multiplied by the producer’s farm and commodity specific PLC yield.

ARC-IC

Farm Service Agency abbreviates Agricultural Risk Coverage based on producer’s individual yield as ARC-IC. ARC-CO protects only 65 percent of covered commodity crops planted on the individual’s farm. It uses the producer’s actual yield and a national marketing year average price to determine if payments are triggered. ARC-IC is a whole farm program, meaning all commodities on a specific farm number must be enrolled in ARC-IC. 

Covered commodities

ARC and PLC are not available for all agricultural crops grown in Minnesota. Only covered commodities with established base acres are eligible for participation in ARC and PLC sign-up. The 22 covered commodities nationwide include wheat, oats, barley, corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, seed cotton, dry peas, lentils, small chickpeas, large chickpeas, and peanuts. Farm Service Agency recognizes 13 covered commodities in Minnesota. University of Minnesota Extension’s Farm Bill educational analysis focuses on corn, soybean and wheat pricing and sign-up decisions.

• 2025 ARC/PLC overview (video; 00:59:22)
• 2023 ARC/PLC overview (video; 00:56:02)
• 2023 ARC/PLC slides (PDF)

For Crop year 2025

Farmers will be paid the higher of either the PLC or the ARC-Co program payment for their farm. These payments will be issued in October 2026. The annual decision for 2026 for ARC or PLC has not opened yet. 

ARC-Co is county-based and revenue-based for crop farmers. Payments are issued when actual county revenue is less than 90% of the 5-year Olympic average revenue, which is calculated as the 5-year Olympic average county yield multiplied by the 5-year Olympic average national price.

The ARC-County payment will be the same for every farmer in each county for each respective crop. ARC-Co will pay out on 85% of base acres. The max ARC-Co payment is 12% of the county benchmark revenue. 

Price Loss Coverage is a program that helps protect farmers from a reduction in the price of different crops. A payment will be issued with PLC when the current Marketing Year Average (MYA) price (determined by the USDA and is a national price) is below the reference price. The reference price is predetermined.

Farmers will get paid the difference between the MYA price and the reference price if the MYA price is lower than the reference price, and will get paid based on the farm’s individual PLC yield (not county yield). PLC will pay on 85% of base acres. 

ARC-I is similar to ARC-Co but is based on individual yields, not county yields. Farms will need to have accurate records of their crops and yields for the previous few years to sign up for ARC-I.

Dairy Margin Coverage is an FSA program that analyzes the difference between milk price and feed cost, the margin. The United States all-milk price is used.

• The feed cost uses a ration calculated by the USDA using NASS pricing for corn and premium alfalfa hay.
• The soybean meal uses AMS prices from Illinois.
• Dairy farmers can elect to cover from 5% to 95% of their annual milk production with a margin coverage from $4.00 to $9.50 in $0.50 increments.
• Dairy farmers can elect Supplemental DMC; those with 5 million pounds of production or less can then update their production history to their 2019 production.
• Supplemental DMC will make payments, if due retroactively to January 2021.
• If not using Supplemental DMC, the amount of milk production is the dairy’s highest annual production between 2011, 2012, or 2013. A new dairy can use either the USA average production per cow or a year later than 2013.

The table below shows the premiums for each coverage level, both for Tier 1, under 5 million pounds, and Tier 2, over 5 million pounds. Discounted Tier 2 shows the discount for the 5-year commitment. The discounted Tier 1 is only applicable if the dairy signed up for the 5-year commitment or is a new dairy.

Example for a dairy with a production history of 5 million pounds at the 95 percent coverage at the $9.50 level:

• 5,000,000 lbs. x 95% = 4,750,000 lbs.
• 4,750,000 lbs. / 100 = 47,500 cwt.
• 47,500 cwt. x $0.15 = $7,125 premium for DMC
• If 5-year was locked in $7,125 x 75% = $5,343.75 premiums.
• There is an additional $100 administrative fee.

For April, the margin was $6.77:

• $9.50 - $6.77 = $2.73
• 47,500 cwt. / 12 months =3,958.333 cwt. per month
• 3,958.333 cwt. x $2.73 = $10,806.24 April payment from DMC

Here are two decision tools for farmers to use:

• University of Wisconsin-Madison DMC Decision Tool
• USDA DMC

University of Minnesota Extension highly recommends looking at the numbers to determine if this program is helpful for your dairy. Risk management is a tool farmers cannot overlook.