The Agricultural Act of 2014 provides payments for covered commodities enrolled in Price Loss Coverage (PLC) when the marketing year average price is below the reference price. For example, the 2018 marketing year average price for grain sorghum was determined to be $3.26 per bushel. The reference price for grain sorghum is $3.95 per bushel. The PLC payment rate is the difference between the two values or .69 cents per bushel.
The table below provides the final PLC payment rates for 2018. For comparison, previous year PLC payment rates under the 2014 Farm Bill are also provided.
PLC payments under the 2014 Farm Bill are subject to 6.8% sequestration. Thus, the net payment rate received for grain sorghum, for example, would likely be 64 cents per bushel (.69 – 6.8% = .64).
As a reminder, PLC payments are made on 85% of the base acres for a program commodity. The PLC payment yield for 2014 Farm Bill payments is 90% of the 2008 – 2012 average yield for each farm. Current payment limits include a cumulative limit of $125,000 for all covered commodities under the Price Loss Coverage (PLC) and Agricultural Revenue Coverage (ARC) programs, with the exception of peanuts, which has its own $125,000 limit.
2018 PLC and ARC payments will be made after October 1, 2019.