2025 PLC and ARC Decisions

by Scott Stiles - March 12, 2025

With the 2018 Farm Bill extended for an additional year, farmers will have the same commodity title decisions to make in 2025 as they have since 2019. These include the Price Loss Coverage (PLC), Agricultural Risk Coverage at the county level (ARC-CO), and ARC at the individual level (ARC-IC) programs.

Producers will need to make an ARC or PLC election for 2025 at their local Farm Service Agency (FSA) office or they can apply online by the April 15, 2025 deadline. If producers do not submit their election by April 15^th, their 2024 election remains in effect. For specific enrollment details on these programs for 2025, click here.

For the second consecutive year, effective reference prices in 2025 for corn ($4.26), sorghum ($4.51) and soybeans ($9.66) will be above statutory references prices ($3.70 for corn, $3.95 sorghum, $8.40 soybeans). Wheat’s effective reference price will increase in 2025 to $5.56. Effective reference price calculations for the major row crops in 2025 are summarized in Table 1.

Table 1. Effective PLC Reference Prices for Major Row Crops

As a reminder, 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 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.

ARC program benchmark prices for each commodity are based on the Olympic average of the 5 prices used in the benchmark calculation. Higher prices in recent marketing years, along with the use of the effective reference prices as minimums for each year used in the calculations result in an increase in the ARC benchmark prices for 2025 compared with previous years. Table 2 summarizes the ARC benchmark price calculation for the major crops.

Table 2. ARC Benchmark Prices for Major Row Crops

ARC-CO guarantees 86% of a county’s benchmark revenue, which implies that payments would be triggered when prices fall below 86% of the benchmark price assuming normal yields at the trendline level for the county. These trigger price levels are $4.32 for corn (0.86 x $5.03), $10.46 for soybeans (0.86 x $12.17), $5.76 for wheat (0.86 x $6.70) and $4.56 for sorghum (.86 x $5.30).

These ARC-CO trigger prices for corn, soybeans, wheat and sorghum exceed their respective PLC effective reference prices.  This suggests ARC-CO is more likely to trigger payments than PLC.  

For rice, cotton and peanuts, the opposite is true with the ARC-CO trigger price being below the PLC reference price.   Thus, a larger price decline for these specific crops will be needed to trigger ARC-CO payments, assuming county yields are at benchmark levels in 2025.  This key difference makes PLC a more preferable choice for rice, cotton and peanuts.

Lower projected prices for all commodities in 2025 increases the likelihood of ARC and PLC payments. In recent years, Arkansas producers tend to choose Agricultural Risk Coverage at the County level (ARC-CO) for corn, sorghum, wheat and soybeans while PLC has been the preferred program on cotton, rice and peanut base acres. The current commodity price outlook indicates these traditional patterns in program election still hold merit for the 2025/2026 marketing year.