There’s been much discussion lately on the impact of declining commodity prices on farm incomes. This week’s article focuses on the commodity “safety net” programs administered by USDA’s Farm Service Agency (FSA) – Ag Risk Coverage (ARC) and Price Loss Coverage (PLC). For cash flow planning purposes, we discuss projections for 2023 marketing year average (MYA) prices and the prospects for payments from the ARC and PLC programs which would occur in October 2024. 

Brief Review of PLC and ARC-County:

For the 2023 crop year, producers in Arkansas enrolled essentially all of their base acres in two commodity programs offered in the 2018 Farm Bill:

• Price Loss Coverage (PLC) is a crop-specific fixed price support program that triggers payments if the marketing year average (MYA) price falls below the commodity’s effective reference price. Payments are made using a PLC yield on 85% of historical base acres.

• Agricultural Risk Coverage at the county level (ARC-CO) is a crop-specific county revenue program. ARC-CO triggers payments if actual revenue (MYA price times county yield) falls below 86% of the benchmark revenue (product of benchmark price and trend-adjusted historical yield for the county). Payments are made on 85% of historical base acres and are capped at 10% of benchmark revenue.

2023 ARC Benchmark and PLC Reference Prices:

Table 1 shows the effective reference and ARC benchmark prices for corn, soybeans, wheat, seed cotton, long-grain rice, medium/short grain rice and peanuts for 2023. Also included in Table 1 are the most recent estimates for 2023 MYA prices.

The 2023 marketing year for wheat ended on May 31^st and PLC and ARC payment rates have been published by FSA. The marketing year for seed cotton, rice and peanuts ended July 31^st. However, all price data for the 23/24 marketing year will not be available until the August 30^th Agricultural Prices  report is released by NASS. The corn and soybean marketing year ends August 31^st. Thus, for most commodities, payment rates remain estimates based on information currently available. ARC and PLC program data for 2023 and other years is provided by FSA at this link.

Table 1. PLC, ARC, and MYA Prices for Select Commodities.

*MYA price projections from August 2024 USDA WASDE report

2023 Wheat Payments Finalized:

Wheat’s 2023 MYA price is $6.96 per bushel, well above the $5.50 effective reference price where PLC payments would be triggered and the $5.50 benchmark price for ARC. County yields would need to be below benchmark levels to trigger ARC-CO payments for 2023. Seven (7) Arkansas counties (Table 2) had average wheat yields low enough to trigger ARC-CO payments for 2023.

Table 2. Counties Eligible for 2023 Wheat ARC-County Payments, Arkansas.

Projected 2023 ARC and PLC Payments:

Corn’s MYA price for the 2023 marketing year is currently projected at $4.65/bu., well above the $3.70 effective reference price. The current 2023 MYA projection for soybeans of $12.50/bu. is also well above the $8.40 effective reference price.  The projected 2023 MYA price for seed cotton at $.3910, peanuts at $.2700, long-grain rice at $.1600 and medium grain rice at $.1760 are all above their respective PLC reference price (Table 1). Thus, no PLC payments are expected to be triggered for any of these commodities for 2023.

The August USDA MYA price projections for 2023 also exceed the 2023 ARC benchmark prices for all commodities shown in Table 1. For instance, the $4.65 MYA projection for corn is 17% above the ARC benchmark price of $3.98 while the $12.50 projection for soybeans is 31% above its ARC benchmark. This means county yields would need to be below benchmark levels for ARC-CO payments to be triggered.

For counties in Arkansas that FSA is currently reporting a 2023 yield for corn, only Clay County would have a yield loss large enough to trigger an ARC-CO payment for non-irrigated corn. If the $4.65 MYA price projection holds, 2023 non-irrigated corn in Clay County would receive roughly a $69 per base acre ARC-CO payment.

For soybeans, based on county yields currently reported by FSA, ARC-CO would trigger payments for non-irrigated soybean base in the following counties:

·      Faulkner ($1.97/base acre)

·      Little River ($20.48/base acre)

·      Prairie ($23.14/base acre).



There is very limited enrollment of rice, seed cotton and peanut base acreage in the ARC-CO program. In Arkansas, essentially all rice base acres are enrolled in PLC and roughly 97% of seed cotton and peanut base are enrolled in PLC. Based on county yields currently reported by FSA, no ARC-CO payments would be triggered for any county in Arkansas that had seed cotton, rice or peanut base enrolled in ARC-CO.  

Despite the significant commodity price declines seen in the latter half of the 2023/24 marketing year, 2023 support payments from Farm Bill programs appear unlikely for PLC. However, select counties could receive ARC-CO payments for corn, soybeans and wheat. Current price and yield information suggests 2023 PLC and ARC-CO payments are unlikely for seed cotton, rice and peanuts.

*SOURCE: Peanut Prices, Runner-type, USDA, National Agricultural Statistics Service, September 2,2024.

Mississippi River Level at Memphis, TN

(as of September 2, 2024)

SOURCE: NOAA National Water Prediction Service

NOAA 7-Day Weather Forecast

(as of 9/02/2024)

SOURCE: NOAA National Weather Service Weather Prediction Center