Late in 2023, the 2018 Farm Bill was extended for one year, extending the expiration of the current farm bill until Sept. 30, 2024. This also meant that the provisions and parameters that existed for traditional farm programs will continue for the 2024 crop year for corn, soybeans, wheat, and other crops.
The good news for farm operators is that the reference prices for corn and soybeans will increase for the 2024 crop year, while the reference price for wheat will remain the same as existed in previous years. This is the first time that corn and soybean reference prices have increased beyond the statutory reference prices since they were initiated in the 2014 Farm Bill and later continued with the 2018 Farm Bill. The benchmark prices for corn, soybeans, and wheat are also increased for the 2024 farm program.
Eligible farm operators have from now until March 15 to enroll in the 2024 farm program at local USDA Farm Service Agency offices. Eligible crops include corn, soybeans, wheat, oats, barley, grain sorghum, long grain rice, medium/short grain rice, temperate japonica rice, seed cotton, dry peas, lentils, large and small chickpeas, peanuts, sunflower seed, canola, flaxseed, mustard seed, rapeseed, safflower, crambe, and sesame seed.
Producers can choose between the price-only “Price Loss Coverage” and revenue-based “Ag Risk Coverage” program choices for the 2024 crop production year. The Ag Risk Coverage program choice includes both the county-yield based “ARC-CO” program choice, which is most popular, and the “ARC-IC” program, which is based on farm-level yields. If no choice is made, the 2023 farm program choice will remain in place for 2024; however, producers still need to enroll in the 2024 farm program in order to be eligible for farm program benefits.
Crop base acres for 2024 will remain at the same levels as 2023 for all crops on most farms, unless there are adjustments in base acres for crop acres that were added via land purchases or rental agreements or acres that are no longer eligible for farm program payments. The farm program yields on individual farm units, which were last updated in 2020, will be continued to calculate potential Price Loss Coverage payments in 2024. The Ag Risk Coverage-CO “benchmark yields” for 2024 are based on the “Olympic-average” Risk Management Agency county average yields for the 2018 to 2022 crop years. The national “market year average” price for each program crop for the years 2018-2022 was averaged to calculate the 2024 “benchmark price” for the Ag Risk Coverage-CO and Ag Risk Coverage-IC programs.
The calculation formulas, etc. for the 2024 PLC, Ag Risk Coverage-CO and Ag Risk Coverage-IC programs will remain the same as in previous years. Price Loss Coverage payments for 2024 will be made if the final market year average price for 2024 falls below the reference price for a given crop. Ag Risk Coverage-CO payments for 2024 will be made if the final county revenue for the year (county yield x final 2024 market year average price) falls below the 2024 benchmark revenue (county benchmark yield x benchmark price) for a given crop. The calculations for the Ag Risk Coverage-IC program are the same as for the Ag Risk Coverage-CO program, except Ag Risk Coverage-IC uses farm-level yield data and considers all crops on a farm unit together for calculation of potential payments in a given year. PLC and Ag Risk Coverage-CO payments are paid on 85% of crop base acres, while Ag Risk Coverage-IC payments are paid on only 65% of base acres.
The 2014 Farm Bill established “statutory reference prices” for all crops that were used to calculate Price Loss Coverage payments. The 2018 Farm Bill set the fixed statutory prices as minimum reference prices and added the possibility for “effective reference prices”. This allows the reference price to increase by as much as 15% above the fixed reference price (fixed price x 115%). The final calculated reference price for a given year is the higher of the fixed statutory price or the 5-year “Olympic average” price for a commodity times 85% (.85). The “Olympic average” price is calculated by taking the market year average price for the five previous years (not including the current marketing year), dropping the high and the low price, and then averaging the other prices for the other three years.
The final effective reference prices for the 2019 to 2023 crop years were at the minimum statutory levels of $3.70 per bushel for corn, $8.40 per bushel for soybeans, and $5.50 per bushel for wheat, meaning that calculation for higher reference prices was not triggered for any of those three crops. Market year average prices have been high enough in recent years to likely result in higher 2024 price loss coverage reference prices for corn and soybeans; however, the wheat reference price will likely remain at the minimum level. The higher reference prices for corn and soybeans potentially increases the likelihood of payments for the 2024 crop year, especially for corn if average market prices continue to decline during the 2024-25 marketing year.
For official information on price loss coverage and ARC-CO programs, and other farm program details, go to the FSA farm program website at:
For a listing of 2024 benchmark yields for all crops, refer to:
https://www.fsa.usda.gov/programs-and-services/arcplc_program/arcplc-program-data/index
Kent Thiesse, Farm Management Analyst, has prepared an information sheet listing key points regarding the 2024 farm decision for corn, soybeans and wheat for the 2024 crop year. To receive a copy of the “2024 Farm Program Decision “Cheat Sheet”, send an email to:
