ARC and PLC Payments for 2023
The 2023 marketing year for wheat ended on May 31st and PLC and ARC payment rates have been published by FSA. The marketing year for corn and soybeans does not end until August 31st, so payment rates remain estimates based on information currently available. ARC and PLC program data is provided by FSA here.
Wheat’s 2023 MYA price is $6.96 per bushel, well above the $5.50 effective reference price where PLC support would be triggered and the $5.50 benchmark price for ARC. County yields would need to be below 68% of benchmark levels to trigger ARC-CO payments for 2023. I did not see any counties in North Dakota with a payment.
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. Thus, no PLC payments are expected to be triggered for corn or soybeans for 2023.
The 2023 ARC benchmark prices for corn and soybeans are both higher than their effective reference prices: $3.98 for corn and $9.57 for soybeans. The $4.65 MYA projection for corn is 17% above the ARC benchmark (4.65/3.98 = 1.17) while the $9.57 projection for soybeans is 31% above its ARC benchmark. Given ARC-CO’s 86% coverage level, this means county yields would need to be below benchmark levels for ARC-CO payments to be triggered.
For corn, the county yield would need to be below 74% of benchmark.
For soybeans, even larger yield losses would be needed with county yields below 66% of benchmark triggering ARC-CO payments.
ARC and PLC Payment Prospects for 2024
The final column of table 2 reports the PLC effective reference prices, ARC benchmark prices, and USDA’s projections for 2024/25 MYA prices from the August WASDE report. Current USDA projections suggest even lower 2024 MYA prices for corn ($4.20), soybeans ($10.80), and wheat ($5.70). Still, these projections are all above each crop’s 2024 effective reference prices, meaning even lower prices would need to be realized to trigger PLC payments for 2024. The corn and wheat MYA price projections are $0.19 and $0.20 per bushel above the effective reference prices of $4.01 and $5.50, respectively. The soybean MYA projection is $1.54 above the effective reference price of $9.26.
The $4.20 MYA price projection for corn is well below the $4.85 ARC benchmark price for 2024. At that MYA price level, ARC-CO payments would be triggered in counties where yields fell just 1%, or more, below benchmark yield. For soybeans, a $10.80 MYA price for 2024 would imply yields would need to be more than 11% below benchmark to trigger ARC-CO
payments. Finally, the wheat MYA projection of $5.70 implies that county yields would need to be at least 6% below benchmark to trigger ARC-CO payments. Much can still change that could impact the 2024 MYA prices. Prices below current USDA projections would result in much higher chances of ARC-CO and, potentially, PLC payments.
Even if ARC and/or PLC trigger support for 2024, farmers should remember that payments for corn and soybeans would not be received until October of 2025. Support outside of the commodity or crop insurance programs could occur via ad hoc programs. Recent historical precedent would suggest this is possible, but not guaranteed. Furthermore, much could still change over the course of the 2024 marketing year which does not begin for corn and soybeans until September 1st. Still, given the current price outlook, careful budgeting and cash flow planning for the rest of 2024 and into 2025 will be critical.
