arc – individual - illinois farm bureau.ppt

ARC – INDIVIDUAL EXAMPLEEACH CROP’S BENCHMARK REVENUE Corn Soybeans Year Price Farm Yield Revenue* Price Farm Yield Revenue* 2009 $3.55 186 $688 $9.59 54 $518 2010 $5.18 170 $881 $11.30 59 $667 2011 $6.22 160 $995 $12.50 56 $700 2012 $6.89 110 $758 $14.40 52 $749 2013 $4.50 190 $855 $12.50 54 $675 *Revenue equals maximum of NAMP or reference price ($3.70 for corn, $8.40 for soybeans) times farm yield Each crop’s benchmark revenue equals Olympic average of revenues: Corn: $831 = ($881 + $758 + $855) / 3 Soybeans: $681 = ($667 + $700 + $675) / 3 ARC – INDIVIDUAL EXAMPLEBENCHMARK REVENUE GUARANTEE Benchmark Revenue weights each crop’s benchmark revenue by proportion of program crop acres planted on ARC-Individual farms Corn Soybeans $831 x .60 + $681 x .40 = $771 Guarantee = 86% of benchmark revenue: $771 x .86 = $663 guarantee ARC – INDIVIDUAL EXAMPLEACTUAL REVENUE A farm’s revenue equals each crop’s revenue weighted by proportion of acres: $3.90 NAMP corn price (USDA est.) 180 bushel per acre corn yield (trend) $9.65 NAMP soybean price (USDA est.) 56 bushel per acre soybean yield (trend) Actual Revenue = $637 .6 x ($3.90 x 180) + .4 x ($9.65 x 56) ARC – INDIVIDUAL EXAMPLEPAYMENT RATE Payment rate equals guarantee minus revenue: $663 Guarantee - $637 Revenue = $26 Rate Rate cannot be more than 10% of benchmark revenue ($771 x .10 = $77) Rate cannot be less than one ARC – INDIVIDUAL EXAMPLEPAYMENT Payment equals payment rate x 65% of base acres: $26 payment rate 100 base acres Payment = $1,690 ($26 x 100 x .65) Payment/acre = $16.90 SUMMARY OF CHOICES Price Loss Coverage Fixed reference target price program Max payment rate: Reference price – national loan rate Payments on 85% of a crop’s base acres ARC – County Revenue program: 5 year Olympic avg. of county yields NAMP Separate guarantee for each crop Guarantee = 86% of benchmark revenue Max payment = 10% of benchmark revenue Payments on 85% of crop’s base acres AR