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by Scott Stiles, Instructor of Agricultural Economics and Agribusiness - September 14, 2021
In USDA’s September update of 2020 PLC Payment Rates, wheat, peanuts, seed cotton, long-grain rice, and southern medium-grain rice are projected to receive PLC payments. 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.
The final 2020 marketing year average prices and final payment rates for wheat and peanuts have been announced by FSA. USDA will announce the final 2020 marketing year average price for seed cotton on September 30th and long-grain and southern medium-grain rice on October 29th.
The far-right column in the table below provides final and projected 2020 PLC payment rates for selected commodities. Higher average farm prices for the 2020 crop are expected to reduce PLC payments from the previous year for all 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 year are expected for wheat, rice, seed cotton, and peanuts.
Commodity
unit
2014
2015
2016
2017
2018
2019
2020
Wheat
bu.
$0.00
$0.61
$1.61
$0.78
$0.34
$0.92
$ .45 F
Corn
$0.09
$0.14
-
Sorghum
$0.64
$1.16
$0.73
$0.69
Soybeans
Peanuts
lbs
$0.0475
$0.0745
$0.0705
$0.0385
$0.0525
$.0625
$.0575 F
Rice: Long-grain
$0.95
$1.31
$1.96
$1.13
$1.44
$0.90
$0.63 P
Rice: Med.-grain
$1.26
$1.76
$1.04
$0.77
$1.08
$0.45 P
Seed cotton
$0.0217
$.0612
$.0294 P
F – Final payment rate, P – Projected payment rate
Source: USDA, Farm Service Agency.