USDA: ARC-PLC Payments Coming

USDA Announces Roughly $8 Billion in Farm Program Payments for Old-Crop Year

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Roughly $8 billion will be paid to farmers this month under the Agricultural Risk Coverage and Price Loss Coverage programs for the 2016-17 crop year. (DTN file photo)

OMAHA (DTN) -- USDA announced Tuesday that roughly $8 billion will be paid to farmers this month under the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs for the 2016-17 crop year that ended Sept. 30.

While rolling out a news release with that initial announcement, USDA did not release specific details on the county yields and ARC-County payments for major crops such as corn or soybeans. Producers apparently need to receive details on the ARC-County payment rate from the individual county Farm Service Agency offices in which they have base acres.

In the announcement regarding the release, Agriculture Secretary Sonny Perdue stated, "Many of these payments will be made to landowners and producers in rural communities that have recently been ravaged by drought, wildfires, and deadly hurricanes. I am hopeful this financial assistance will help those experiencing losses with immediate cash flow needs as we head toward the end of the year."

USDA noted that more than 500,000 farmers will receive ARC payments and more than 250,000 will receive PLC payment for the 2016-17 crops, starting this week and continuing over the next several months.

ARC and PLC also will be subject to a 6.8% sequestration cut dating back to federal budget austerity put in place in 2013.

More than 90 million corn base acres are enrolled in ARC-County while another 6.39 million acres are enrolled in PLC. Last week, the National Agricultural Statistics Service released the final Market Year Average (MYA) prices for the 2016-17 crop year, which was $3.36 a bushel for corn. That puts the national PLC payment rate at 34 cents a bushel, though ARC-County payments are more complicated because they can vary widely from county to county.

The ARC payment relies on the final NASS county yield to complete the formula for ARC payments. ARC-County uses five-year Olympic averages for county yield and MYA prices to determine a revenue benchmark and guarantee.

Soybean farmers will not collect a PLC payment due to an MYA price of $9.47 a bushel, which is higher than the $8.40 reference price.

Wheat farmers enrolled in PLC have a payment rate of $1.61 a bushel due to a MYA of $3.89 a bushel subtracted from a $5.50-per-bushel reference price. Roughly 27 million wheat base acres are enrolled in PLC while 35.4 million acres are enrolled in ARC-County.

"Low prices, extreme weather, and disease pressures are causing farmers to have a difficult time making ends meet," stated David Schemm, president of the National Association of Wheat Growers and a farmer from Sharon Springs, Kansas. "Farm Bill safety net programs, like ARC and PLC, are crucial for growers to recover from a disaster and allow them to survive and farm another year."

Sorghum producers enrolled in PLC would see a payment rate of $1.16 a bushel based on a $2.79 MYA price subtracted from a $3.95-per-bushel reference price. Farmers enrolled 5.97 million acres in PLC for sorghum, compared with just under 3 million acres enrolled in ARC-County.

Along with ARC and PLC payments, USDA also announced $1.6 billion in payments under the Conservation Reserve Program for 2017 as well. CRP payments will go out to more than 375,000 landowners who have more 23.47 million acres in CRP.

"American farmers and ranchers are among our most committed conservationists," Perdue said. "We all share a responsibility to leave the land in better shape than we found it for the benefit of the next generation of farmers. This program helps landowners provide responsible stewardship on land that should be taken out of production."

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Chris Clayton