WSU CAHNRS

CAHNRS and WSU Extension

Wheat and Small Grains

Benefit to Washington Wheat Producers Associated with Increased Farmer Program Flexibility

Wheat farmers signing up for U.S. farm program benefits in early 2015 were asked to select between a revenue based program (Agricultural Risk Coverage – ARC) or a price based program (Price Loss Coverage – PLC). Once a choice was made, the choice was binding over the entire life of the 2014 Farm Bill. This created a challenge because the two programs generate very different benefit streams under different market scenarios. The ARC program generally provides superior benefits if prices stay above the PLC target price ($5.50 per bushel for wheat), or if producers expected significant yield variation over the life of the farm bill. If market prices fall below the PLC target, and yields are stable or increasing, the PLC program will generally provide greater protection. The analysis presented here looks at the cost to Washington wheat producers associated not being able to switch between ATC and PLC as market condition change.

For questions contact Randy Fortenbery at 509-335-7637 or r.fortenbery@wsu.edu.

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