ARC-CO decisions reviewed

    A survey of the 2017 Agriculture Risk Coverage-County payments for irrigated corn in the seven counties (Kit Carson, Logan, Morgan, Phillips, Sedgwick, Washington and Yuma) served by the CSU Regional Engagement Center in Sterling reveals that payments were only made in Washington County. Producers in Morgan County did not receive a payment in 2016 or 2017.
    Many irrigated corn producers are beginning to wonder if the decision they made in 2015 to elect ARC-CO rather than Price Loss Coverage was the correct decision.
    Payments are made under ARC-CO when ARC-CO actual revenue is less than the ARC-CO guarantee for a covered commodity. ARC-CO actual revenue is determined by multiplying the county yield during the crop year by the national price for that crop year. The ARC-CO guarantee is calculated by multiplying the county benchmark yield by the national benchmark price.
    The national benchmark price is determined by a five-year olympic average (drop the high and the low and average the remaining three) of the higher of the marketing year average or the reference price. The national benchmark price is likely to be a bigger driver in determining the ARC-CO guarantee than the county benchmark yield, as yields tend to follow predictable trend lines and do not vary much over time, barring unforeseen weather events.

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