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by Scott Stiles, Extension Economist - April 13, 2021
USDA’s Price Loss Coverage (PLC) program is a commodity support program that makes deficiency payments when the marketing year average price for a covered commodity falls below a statutory reference price. PLC payments are made on a farm’s historic average yields and 85% of commodity-specific base acres.
USDA’s most recent Projected 2020 PLC Payment Rates indicate that 13 of 23 covered commodities are projected to receive PLC support. However, USDA will continue to update these projections over the course of each commodities’ marketing year. Final marketing year average prices and PLC payment rates will be determined later this year for most of Arkansas’ major row crops.
The far-right column in the table below provides current projections for 2020 PLC payment rates. Past year payment rates going back to 2014 are also included. Increasing commodity prices for the 2020 crop are expected to reduce PLC payments for all the major row crops. In the case of corn, grain sorghum, and soybeans no PLC payments for the 2020 crop are projected. Lower payment rates for the 2020 crop are expected for wheat, rice, seed cotton and peanuts.