ARC vs PLC: Which Should You Choose for 2026?

Last Updated: April 2026 | Source: USDA-FSA, OBBB legislative text, program regulations

This is a free guide, not financial or legal advice. Program details change. Always verify current information with your local FSA office before making decisions. Help us improve: if something here is wrong or outdated, let us know.

What ARC Does

ARC-CO (Agriculture Risk Coverage, County Option) can pay when actual county crop revenue drops below a guarantee level. It's a revenue-based program, meaning it accounts for both price and yield.

How ARC-CO Calculates Payments

Benchmark revenue = Olympic average of county yields over the 5 most recent years (dropping the highest and lowest) multiplied by the Olympic average of national marketing year average prices over the same period.

Guarantee = 90% of benchmark revenue (increased from 86% under OBBB).

Actual revenue = Actual county yield multiplied by the higher of the national marketing year average price or the loan rate.

If actual revenue falls below the guarantee, ARC-CO may pay the difference, up to a maximum payment rate of 12% of benchmark revenue (increased from 10% under OBBB).

Payment is calculated per base acre: (Guarantee minus Actual Revenue) x 85% of base acres.

What This Means in Practice

ARC responds to a combination of low prices and low yields at the county level. If your county has a bad yield year, ARC can trigger even if national prices are decent. If national prices drop but your county yield is strong, ARC may or may not trigger depending on whether the combined revenue falls below the guarantee.

The Olympic average smooths out anomalies. One terrible year or one great year won't dramatically shift your benchmark. It moves slowly, which provides stability but also means the guarantee can lag behind recent conditions.

ARC-IC (Individual Coverage)

There is also an ARC-IC option that uses your individual farm's revenue instead of county-level data. ARC-IC applies to all commodities on the farm as a bundle rather than individually. It's less commonly used than ARC-CO because it's harder to trigger and more complex. Most producers should evaluate ARC-CO first.

What PLC Does

PLC (Price Loss Coverage) can pay when the national marketing year average (MYA) price for a commodity drops below the effective reference price. It's a price-based program, triggered purely by national price, not by yield.

How PLC Calculates Payments

Effective reference price = The higher of the statutory reference price or 85% of the Olympic average of the 5 most recent marketing year average prices (capped at 115% of the statutory reference price).

This means PLC's reference price can float upward when prices have been high recently, providing more protection during periods of elevated prices. But it can never go below the statutory floor or above 115% of it.

Payment = (Effective reference price minus MYA price) x payment yield x 85% of base acres.

If the MYA price stays above the effective reference price, no payment.

What This Means in Practice

PLC is simpler than ARC. It triggers on one variable: the national marketing year average price. If corn's MYA price drops below the effective reference price, every PLC-enrolled corn farm in the country may receive a payment (adjusted by their individual payment yield and base acres). County yield doesn't matter for PLC.

PLC tends to pay in years when commodity prices drop sharply. It doesn't respond to local yield problems. If your county has a drought but national corn prices are high, PLC won't help. That's what crop insurance is for.

Side-by-Side Comparison

When ARC Wins vs. When PLC Wins

ARC Tends to Pay When:

• Your county has a bad yield year (drought, flood, disease) regardless of national price
• There's a moderate dip in both price and yield that individually wouldn't trigger PLC but together push county revenue below the guarantee
• County-level yield variability is high (some years great, some years terrible)

PLC Tends to Pay When:

• National commodity prices drop sharply (a nationwide price crash)
• The price decline is large enough to push the MYA price below the effective reference price
• Your county yield is normal or even above average, but prices tanked

Neither Pays When:

• Prices are strong and yields are normal. In a good year, both programs sit quiet. That's by design.

The General Rule

If your main risk is yield variability in your county (drought-prone areas, irrigated vs. dryland, regions with volatile weather), ARC may provide more frequent payments because it responds to local conditions.

If your main risk is national price crashes (you're in a stable-yield county but worry about commodity markets collapsing), PLC may provide larger payments when prices drop significantly because it has no percentage cap on payments.

In practice, the decision often comes down to the specific commodity. A farmer might choose ARC for one crop and PLC for another on the same farm, because the risk profile differs by commodity.

What Changed Under OBBB

The One Big Beautiful Bill Act strengthened both programs. Here are the changes that affect your 2026 decision:

ARC Improvements

• Guarantee increased: 86% to 90% of benchmark revenue. This means ARC can trigger sooner when county revenue drops.
• Maximum payment rate increased: 10% to 12% of benchmark revenue. When ARC does pay, the payments can be larger.

PLC Improvements

• Higher effective reference prices. The formula adjustments mean PLC reference prices are higher for several major commodities, which means PLC can trigger at higher MYA prices than before.

Both Programs

• Payment limit increased: $125,000 to $155,000 per person per year. More room before hitting the cap.
• Up to 30 million new base acres. If your farm produces program crops but doesn't have base acres, you may now qualify based on your 2019 through 2023 planting history. Contact FSA.

For the full OBBB breakdown, see our OBBB guide.

The 2025 Best-of-Both Provision

For the 2025 crop year only, OBBB included a special provision: USDA automatically pays whichever is higher, ARC or PLC, for each commodity on each farm. No election was needed for 2025. Every enrolled producer received the better of the two payments.

This does not apply to 2026. Starting with the 2026 crop year, you must choose ARC or PLC for each commodity on each farm. The best-of-both was a one-year transition provision. Your 2026 election matters.

New Base Acres

OBBB authorized up to 30 million new base acres nationwide. If your farm has been producing program crops (corn, soybeans, wheat, sorghum, rice, peanuts, and others) but lacks base acres, you may now be eligible to establish them based on your planting history from 2019 through 2023.

Base acres are the foundation of both ARC and PLC. Without base acres, you can't participate. If you've been farming program crops on land that has never had a base acre allocation, contact your FSA office to find out whether you qualify under the new provision.

This is especially relevant for:

• Farms that were converted from other uses (pasture to cropland, CRP land returned to production)
• Land that changed hands and lost its base acre history
• Operations that expanded onto ground without existing base acres

How to Elect

Step 1: Visit Your FSA Office

Bring your farm number. FSA will show you your base acres, payment yields, and the current effective reference prices for your commodities.

Step 2: Review Your Options by Commodity

You make a separate ARC/PLC choice for each commodity on each farm. You might choose ARC for corn and PLC for soybeans on the same farm, or vice versa. Each commodity has its own risk profile.

Step 3: Look at the Data

FSA can show you historical county yields, MYA prices, and what ARC and PLC would have paid in recent years for your farm. This historical comparison is the best tool for deciding. No one can predict the future, but the pattern of past payments tells you which program has triggered more often for your commodities in your county.

You can also use the ARC vs PLC Calculator on this site to run scenarios.

Step 4: Make Your Election

Sign the election form at FSA during the election period. Your choice is locked in for the 2026 crop year.

Step 5: Confirm Your Election Before the Deadline

If you don't make an active election, your previous year's choice may carry forward. But don't rely on that. The OBBB changes shifted the math. An election that was right in 2024 may not be right for 2026. Visit FSA and make an active choice.

SCO and the ARC/PLC Decision

Supplemental Coverage Option (SCO) is a crop insurance product that fills the gap between your individual policy and 86% of expected county revenue. Under OBBB, SCO's subsidy increased to 80% (from 65%), making it significantly cheaper.

Previously, you could not buy SCO if you elected ARC. Under OBBB, SCO is available regardless of your ARC/PLC election. This changes the calculus. You can now stack ARC + SCO, which wasn't possible before.

Talk to your crop insurance agent about SCO if you haven't already. The decoupling from ARC opens up new combinations.

What Most People Get Wrong

• Not re-evaluating after OBBB. ARC's guarantee went from 86% to 90% and its max payment from 10% to 12%. PLC's reference prices increased. If your election was based on pre-OBBB math, it may no longer be optimal. The relative value of ARC vs. PLC shifted, and the answer could be different now.
• Making the same choice for every commodity. Corn and soybeans have different price floors, different yield variability patterns, and different reference prices. A farmer might correctly choose PLC for one and ARC for the other. Evaluate each commodity separately.
• Ignoring county yield data. ARC is county-level. If your county has highly variable yields (drought one year, bumper crop the next), ARC may trigger more often than you'd expect based on national price outlook alone. Look at your county's yield history, not just national price charts.
• Not checking for new base acres. If your farm has been producing program crops but never had base acres, you may now qualify under OBBB. Without base acres, you can't participate in either program. This is worth one phone call to FSA.
• Letting the election default. If you don't make an active choice, your previous election may carry forward. But the OBBB changes mean the math shifted. Don't assume last year's choice is still correct. Make a conscious decision.
• Not considering SCO. Now that SCO is decoupled from ARC, you have more combinations available. SCO at 80% subsidy is significantly cheaper than before. Factor it into your overall risk management package, not just the ARC/PLC decision in isolation.

What to Do

If you haven't reviewed your ARC/PLC election since OBBB passed: Visit your FSA office. Ask them to show you what ARC and PLC would have paid on your farm in recent years under the new OBBB rules. The answer may surprise you.

If you've been choosing the same program every year without checking: Run the numbers again. ARC at 90% guarantee is a meaningfully different program than ARC at 86%. PLC with higher reference prices triggers at different price levels. The comparison that was right three years ago may not be right today.

If you produce crops but don't have base acres: Contact FSA immediately and ask about the new base acre provision under OBBB. If your 2019 through 2023 planting history qualifies, you could gain access to ARC or PLC payments you've never been eligible for.

If you want to model scenarios: Use the ARC vs PLC Calculator on this site, or ask your FSA office to run the comparison for your specific farm.

If you're also buying crop insurance: Ask your agent about SCO at the new 80% subsidy rate. The ARC + SCO combination is now available and could strengthen your overall safety net. Get quotes on both before you finalize your ARC/PLC election at FSA.

ARC and PLC are not complicated once you understand what each one responds to. ARC responds to county-level revenue drops. PLC responds to national price drops. The OBBB changes made both stronger. The right choice depends on your specific commodities, your county, and the risk you're most concerned about. Run the numbers, make the choice, and don't leave it on autopilot.

• ARC vs PLC Calculator: model scenarios for your farm
• OBBB Guide: what changed for farm programs
• Livestock Insurance: LRP, PRF, and how they work
• Program Stacking Guide: combine ARC/PLC with other programs
• Take the eligibility screener
• Find your local FSA office

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