Safety Net Program
Crop
ARC-CO Estimate
Enter crop data and click estimate.
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Introduction
Federal crop insurance paid out $19.8 billion in indemnities in 2023, the third-highest payout in program history, according to the USDA Risk Management Agency. For producers in 2026 facing corn prices $0.80 per bushel below estimated break-even and soybeans running $2 per bushel below where they need to be, understanding exactly how crop insurance and government programs (ARC-CO, PLC) interact to form your total safety net is not optional paperwork. It is the difference between a catastrophic loss year and a manageable one. The challenge is that ARC-CO and PLC payment calculations are notoriously complex: Olympic average prices, benchmark revenues, county-level yields, base acres versus planted acres, 85% payment factors, sequestration haircuts, and coverage level interactions with revenue protection insurance. Most producers elect one program over another based on general advice rather than running their own numbers for their specific farm and county.
What This Calculator Does
This calculator helps farmers and agricultural lenders estimate potential ARC-CO (Agriculture Risk Coverage, County Option) and PLC (Price Loss Coverage) safety net payments using 2026 FSA program rules. It calculates payments based on effective reference prices, Olympic average benchmark yields, actual county yields, and market year average prices for corn, soybeans, wheat, rice, cotton, and sorghum. The tool shows both ARC-CO and PLC calculations side by side so you can evaluate which program would produce the higher payment under different price and yield scenarios.
The Formula
ARC-CO guarantees 86% of benchmark county revenue (Olympic average of 5-year yields x Olympic average of 5-year prices). If actual county revenue (county yield x national MYA price) falls below the guarantee, the payment covers the shortfall, capped at 10% of benchmark revenue. Payments go to 85% of base acres. PLC pays when the national marketing year average price falls below the effective reference price. The effective reference price is the higher of the statutory reference or the loan rate, and it escalates if the 5-year Olympic average price exceeds the statutory reference. PLC payments are calculated on 85% of base acres at the payment yield. Both programs are subject to 5.7% sequestration under current law.
Step-by-Step Example
Identify your farm's base acres and program eligibility
Example farm: 500 corn base acres, payment yield 172 bu/ac. The 2026 ARC-CO benchmark for the county (using 5-year Olympic average data): Olympic average yield 184 bu/ac, Olympic average price $4.52/bu. Benchmark county revenue: 184 x $4.52 = $831.68/ac. ARC-CO guarantee (86%): $715.24/ac.
Enter actual county data and market price
Actual 2026 county yield: 168 bu/ac (drought reduced yield 9% below Olympic average). National MYA price: $4.20/bu. Actual county revenue: 168 x $4.20 = $705.60/ac. Revenue shortfall: $715.24 - $705.60 = $9.64/ac.
Calculate ARC-CO payment
Payment per acre: $9.64 (less than the 10% cap of $83.17). Payment on base acres: $9.64 x 85% x 500 = $4,097. After 5.7% sequestration: $4,097 x 0.943 = $3,864 total ARC-CO payment on this farm.
Compare PLC alternative
PLC: Effective reference price $4.01/bu. MYA price $4.20/bu. Since MYA exceeds the reference price, PLC payment is $0. ARC-CO wins in this scenario. Run the scenario at $3.90 MYA: PLC = ($4.01 - $3.90) x $0.943 x 85% x 172 x 500 x 85% = $6,126. At $3.90, PLC pays more than ARC-CO. This comparison illustrates why elections matter.
Real-World Use Cases
Pre-Enrollment ARC vs. PLC Election Decision
A farmer must decide by March 15 whether to elect ARC-CO or PLC for corn. Running the calculator across three price scenarios: at $4.20 (current), ARC-CO pays $3,864. At $3.75, ARC-CO pays $26,000 and PLC pays $22,500. At $3.50, PLC pays $48,750 and ARC-CO pays $36,100. PLC outperforms ARC-CO in the lowest-price scenarios (below $3.90), while ARC-CO performs better in moderate shortfall conditions. The election depends on each producer's view of which scenario is more likely.
Agricultural Lender Cash Flow Projection
A commercial lender evaluating a $350,000 operating loan for a 900-acre corn operation needs to project total farm income including safety net payments. At projected $4.20 corn, the farm generates $756,000 crop revenue. Adding projected ARC-CO payments of $7,560 and crop insurance indemnity of $21,000 from a below-average yield in one field, total projected income is $784,560 against $780,000 in total costs. The safety net analysis is what makes this loan feasible.
Multi-Year Election Planning for Farms with Multiple Commodities
A diversified farm with corn, soybean, and wheat base acres has different optimal programs for each commodity. Corn: ARC-CO better at moderate price shortfalls. Soybeans: ARC-CO better given county-level yield risk. Wheat: PLC likely better given severe price drop from $7.96 break-even to $5.00 market. The calculator evaluates each commodity separately and recommends different elections.
Comparison
| Commodity | Statutory Ref. Price | 2026 Eff. Ref. Price | ARC-CO Benchmark Rev. | MYA Price | PLC Trigger? |
|---|---|---|---|---|---|
| Corn | $4.01/bu | $4.01/bu | ~$728/ac | $4.20/bu | No (price above ref.) |
| Soybeans | $9.26/bu | $9.26/bu | ~$486/ac | $10.30/bu | No (price above ref.) |
| Winter Wheat | $5.74/bu | $5.74/bu | ~$298/ac | $5.00/bu | Yes ($0.74 payment/bu) |
| Grain Sorghum | $4.03/bu | $4.03/bu | ~$288/ac | $4.10/bu | No (price above ref.) |
| Long Grain Rice | $14.00/cwt | $14.00/cwt | ~$812/ac | $14.50/cwt | No |
Common Mistakes to Avoid
Confusing base acres with planted acres. ARC and PLC payments are made on base acres established from historical production, not current planted acres. A farm with 400 corn base acres that plants 450 corn acres still receives payments on only 400 base acres.
Forgetting the 85% payment factor. Both ARC-CO and PLC pay on 85% of base acres, not 100%. A farm with 500 corn base acres receives payments as if it had 425 acres. This reduces the actual payment by 15% compared to a calculation that uses full base acres.
Not accounting for sequestration. Federal sequestration reduces ARC and PLC payments by 5.7% in 2026. All calculations should multiply final payment amounts by 0.943 to reflect actual cash received.
Assuming ARC-CO uses your farm's yield, not the county average. ARC-CO uses county-average yields from NASS (National Agricultural Statistics Service), not your individual farm yield. Your farm may have a better or worse yield than the county average in any given year, which affects whether your farm revenue was actually protected.
Missing the enrollment deadline. The ARC/PLC election and enrollment deadline is typically March 15 of the applicable crop year. Producers who do not actively enroll receive no program benefits for that year, regardless of how severe price or yield losses are.
Frequently Asked Questions
Accuracy and Disclaimer
Payment estimates are based on 2026 FSA program rules and published reference prices. Actual payments depend on final county yields published by NASS, final national marketing year average prices, your specific base acres and payment yields, and congressional sequestration. Payment calculations are subject to change if program rules are modified. This calculator is for planning and education purposes only. Contact your local FSA service center for official program enrollment, payment calculations, and deadline information.
Conclusion
The ARC-CO versus PLC election is one of the most consequential risk management decisions a producer makes, and it must be made before March 15 for the 2026 crop year. Use this calculator to run both programs across a range of price scenarios before your election deadline. Then combine the safety net analysis with the Break-Even Yield Calculator to understand the full gap between your costs and your total protected revenue from both crop insurance and government programs, and with the Crop Yield Revenue Calculator to build a complete 2026 farm income projection.
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