On August 29, 2018 the USDA Farm Service Agency (FSA) announced the 2017 Price Loss Coverage (PLC) payment rate for wheat. The Agricultural Act of 2014 (aka 2014 Farm Bill) provides payments for covered commodities enrolled in PLC when the Marketing Year Average price is below the statutory Reference Price.
The PLC Reference Price for wheat is $5.50 per bushel. The 2017 Marketing Year Average was determined to be $4.72 per bushel. The national Loan Rate for wheat is $2.94 cents per pound. The PLC Payment Rate is calculated by subtracting the higher of the Loan Rate or the Marketing Year Average price from the Reference Price. The table below provides the 2017 PLC payment rate for wheat.
Wheat PLC payments for the 2017 crop are expected to be made in October 2018. Payments made under the PLC program are subject to a payment limitation of $125,000 per person. As a reminder, PLC payments are decoupled from actual production. Payment Yields used for PLC could be either 90% of actual farm yields for the years 2008 through 2012 or 75% of the county average yields for that time period.
Price Loss Coverage payments are also decoupled from actual planted acreage—that is, payments are made on 85% of a crop’s historical “base” acres rather than actual acres planted or harvested.
Arkansas has 872,524 wheat base acres. Roughly 43% of these base acres are enrolled in Price Loss Coverage or PLC.
The complete news release from the Farm Service Agency can be downloaded here.
|$ Per Bushel|
|National Loan Rate||$2.94|
|Marketing Year Average (MYA) Price||$4.72|
|Higher of Loan Rate or MYA Price||$4.72|
|PLC Payment Rate||$0.78 = ($5.50 – $4.72)|