The USDA Farm Service Agency (FSA) began issuing payments to producers in early October for Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) programs for the 2016 crop year. These payments continue to be substantial, adding more than $600 million to cash flows for Nebraska producers this fall. However, this could be the last year of such large payments, as early estimates for 2017 crop payments to be paid in the fall of 2018 could be just one-third as much and 2018 crop payments in 2019 could be even less.

An analysis of farm program payment rates provides details on the current payments as well as the outlook for future support. The federal farm program support comes from commodity programs created in the 2014 Farm Bill. The legislation gave producers a choice of enrollment by commodity and by county in either a price-based program (PLC) or a revenue-based program (ARC) at either the county level (ARC-CO) or the farm level (ARC-IC for “individual coverage”). As commodity prices have declined from pre-2014 levels, both ARC and PLC have become important components of the farm income safety net and also substantial infusions of cash flow for producers.

Read More in the Oct. 25 issue of Cornhusker Economics, a newsletter of the Department of Agricultural Economics.

Also see an article by Brad Lubben in the Oct. 30 digital Nebraska Farmer: Farm finance and the shrinking safety net.