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2014 Farm Bill Crop Safety Net Decision: Key Considerations

Summary

The 2014 farm bill encourages farmers to think strategically about their farms through at least 2018. An important strategic risk management question is the ability of a farm to withstand multiple years of low farm prices and revenue. Managing multiple-year risk involves a set of interrelated considerations, including the expected path of prices and revenue until 2018. The multiple year nature of this assessment points to the value of consulting decision calculators. The focus is considerations in choosing among the three crop safety net options: (1) Price Loss Coverage (PLC) – a target price program; (2) county Agricultural Risk Coverage (ARC) – a county revenue program, and (3) individual ARC – an individual farm revenue program. A reference table at the end of this article contains a brief, comparative list of key program parameters for each option.