Effective Reference Prices will Lead to Higher ARC and PLC Payments

Paul is always willing to admit he made a mistake. In our previous post I indicated that the increase in effective reference price would not increase payments. I was wrong. It will.

Photo by Nicola Ambrosi on Unsplash

We made an error in our previous post regarding the effective reference prices. In the spreadsheet we used in the video we mistakenly used the reference price in calculating ARC payments. The correct price is to use the Olympic Average Price which takes a five-year period and takes out the low and the high price and averages the remaining three prices.

For example, in our original video we assumed the benchmark price for 2025 was $4.26. The actual price to use is $1.00 higher at $5.26. This substantially increases benchmark revenue and guarantee for 2025 resulting in about a $95 payment instead of little or no payment in the original video.

Again, we apologize for this. For our paid subscribers we are attaching the corrected video to review. Please disregard the previous video.