SCO and crop insurance
Farmers who sign up a commodity for PLC will then get the option of buying Supplemental Coverage Option insurance (SCO) for that commodity starting in 2015, Zulauf says. “SCO is also available to farms not signed up for either (PLC or ARC),” he adds. “It is not available to farms that elect ARC.”
McCauley, his wife and son operate two separate farms, totaling about 2,300 acres each, plans to use the county (formerly called Enterprise) ARC program. “It’s similar to what we had in the past, minus direct payments,” he says. “I think it will provide good coverage. That’s the big picture.”
He hasn’t decided whether to reallocate his base acres. “We’ve been heavy on corn and got rid of our wheat base,” he says. “We may reallocate if something jumps out, but our area has been consistently 50% or higher on corn.”
Anderson’s farm rotation is corn, soybeans and wheat on 2,500-3,000 acres. He says his program decisions favor assuring the farm works to enhance its conservation compliance. The new farm bill requires producers who purchase subsidized crop insurance policies to meet federal conservation compliance policies, similar to other participation in farm programs.
Anderson looks to get the best use of crop insurance on mostly rented land. “Crop insurance and the risk avoidance aspect will be the area I use the most,” he says. “We have shallow soils. No matter how much it rains, we can be in a near drought situation in six to seven days.”
He may lean toward PLC because of SCO availability. “We’re on a lot of rented ground. It was a challenge to use ACRE because it asked me to engage in a program landowners may not have liked. We respect the rights of landowners to do as they see fit, so we’re hesitant to go in the direction of locking a program in for a long time.”
Coppess says that in analyzing the PLC and ARC programs, and presuming trend yields for corn and soybeans, “the county ARC in 2014 would reach the cap in most Midwestern counties at prices well above the reference prices but below USDA’s projected prices. Individual ARC payments likely smaller than county ARC payments.”
Zulauf says the individual ARC may be most attractive to farmers who farm in a highly variable production environment and their farming environment is not similar to the county in which they farm.