Welcome to the January 19, 2024 issue of Cotton News, a service provided by Plains Cotton Growers Inc. for the cotton industry in the Texas High Plains and beyond.
Making the ARC/PLC Election for 2024
First published in “Southern Ag Today” by Bart Fischer and Joe Outlaw
On November 16, 2023, President Biden signed H.R. 6363 – the Further Continuing Appropriations and Other Extensions Act of 2024 – into law. The bill extended the Agriculture Improvement Act of 2018 (2018 Farm Bill), reauthorizing programs like the Agriculture Risk (ARC) and Price Loss Coverage (PLC) programs through September 30, 2024. Producers will have an opportunity to make a one-time election between ARC and PLC for the 2024 crop year. USDA opened the election and enrollment period on December 18, 2023, and it runs through March 15, 2024.
The ARC/PLC decision for 2024 is against the backdrop of a general softening in prices, but the implications vary by crop. For some crops, the decision may be clear-cut.
As we have noted in the past, we highly encourage you to also look at tools like the Supplemental Coverage Option (SCO) or the Enhanced Coverage Option (ECO), both of which provide area-wide coverage for part of the deductible not covered by your underlying policy. Importantly, if you elect ARC, you cannot purchase SCO. In other words, you are essentially evaluating ARC versus PLC + SCO. Even if PLC is not expected to trigger, you may still choose to elect it and purchase SCO, particularly if the value of SCO is expected to exceed that of ARC.
For cotton producers, we continue recommending that you first evaluate the Stacked Income Protection Plan (STAX) before making decisions about ARC/PLC. In the case of cotton, STAX cannot be purchased on any farm where the seed cotton base has been enrolled in ARC or PLC for that crop year. As we will discuss at the Red River Crops Conference in Altus, OK, later today, in a scenario where the crop is a total loss, the area-wide policies can provide considerably more coverage than ARC. For example, as noted in the example for Jackson County, OK, in Table 1, STAX can provide more than twice as much support as ARC in a total loss scenario.
As always, we aren’t in the business of telling you exactly what to do, because, frankly, we don’t know what will end up being the best choice. But, as with previous years, we do have a decision aid available at www.afpc.tamu.edu where you can input your info, and it will show you expected payments under as many different price scenarios as you want to look at.
The High Plains comparison chart is provided by PCG Director of Policy Analysis and Research Shawn Wade.
Upcoming Events
Top of Texas Ag Conference
Date: January 23, 2024
Location: M.K. Brown
Plains Cotton Growers Inc. Board of Directors Meeting
Date: January 24, 2024
Location: FiberMax Center for Discovery
Texas Alliance for Water Conservation 10th Annual Water College
Date: January 24, 2024
Location: Lubbock Memorial Civic Center
Dumas Panhandle Crops Conference
Date: January 25, 2024
Location: Moore Co. Community Building
For a full list of upcoming events, see the Events Page.
West Texas Cotton Quality Report for the 2023 Season
2023 Cotton Quality Report
This is a weekly summary of the cotton classed at the Lubbock and Lamesa USDA Cotton Division Cotton Classing Offices for the 2023 production season.
Lamesa’s average daily number of cotton samples received this week is 1,087. The office is currently 100% complete in the classing of their season estimate of samples.
Lubbock’s average daily number of cotton samples received this week is 1,492. The office is 99% complete in the classing of their season estimate of samples.