Expected PLC Payment Rates for 2019 and 2020

Will Maples, Extension Ag Economist, Mississippi State University
By Will Maples, Extension Ag Economist, Mississippi State University September 11, 2020 13:49

Expected PLC Payment Rates for 2019 and 2020

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With the latest release of marketing year average (MYA) price projections from the USDA for September 2020, we are able to get a clear picture on expected PLC payments for 2019 and begin forming projections for 2020.

2019 PLC Payments

The expected PLC payments for the 2019 year are listed in Table 1. These payments are based on the estimated Marketing Year Average Price (MYA Price), which is the national average price received by producers over the marketing year. As the marketing year is either over or close to being over, the estimates will not change much between now and the date for the final MYA Price. The finalized MYA Price for the 2019/20 year will be released in September for Corn and Soybeans and October for Seed Cotton and Rice. The MYA Price for Peanuts and Wheat is the finalized price. The Expected PLC Payment Rate is the higher of (Reference Price minus the Estimated 2019/20 MYA Price) or (zero). To find the estimated PLC payment per base acre, multiply the Expected PLC Payment Rate by the individual farm’s PLC Yield, then multiply by the 85% payment reduction factor. Of the crops listed, only Soybeans are expected to not have a PLC payment for the 2019 year.

Table 1. Expected PLC Payment Rates for 2019 Marketing Year

CommodityMarketing YearDates for the Final 2019/20 MYA PriceUnit2019 Reference PriceEstimated 2019/20 MYA PriceExpected 2019 PLC Payment Rate
CornSep. 1-Aug. 31Sept. 30, 2020bu$3.70$3.60$0.10
SoybeansSep. 1-Aug. 31Sept. 30, 2020bu$8.40$8.55$0.00
Seed CottonAug. 1-Jul. 31Oct. 30, 2020lb$0.3670$0.3056$0.0614
Rice (long grain)Aug. 1-Jul. 31Oct. 30, 2020lb$0.1400$0.1200$0.02
Rice (med/short grain)Aug. 1-Jul. 31Oct. 30, 2020lb$0.1400$0.1170$0.023
PeanutsAug. 1-Jul. 31Aug. 28, 2020lb$0.2675$0.2050$0.0625
WheatJun. 1-May 31Aug. 28, 2020bu$5.50$4.58$0.92

2020 PLC Payments

The expected PLC payments for the 2020 year listed in Table 2. The Estimated 2020/21 MYA Price is based on prices from the September USDA WASDE report and the August Oil Crops Outlook Report. These numbers are subject to change significantly between now and next fall as conditions change. Similar to 2019, only Soybeans are expected to not have a PLC payment for the 2020 year. However, soybean price is expected to be higher than in 2019. For all other crops, PLC payments are expected to either stay the same or increase compared to 2019. This is due to the lower prices expected in the 2020/21 marketing year.

Table 2. Expected PLC Payment Rates for 2020 Marketing Year

CommodityMarketing YearDates for the Final 2020/21 MYA PriceUnit2020/21 Reference PriceEstimated 2020/21 MYA PriceExpected 2020 PLC Payment Rate
CornSep. 1-Aug. 31Sept. 2021bu$3.70$3.50$0.20
SoybeansSep. 1-Aug. 31Sept. 2021bu$8.40$9.25$0.00
Seed CottonAug. 1-Jul. 31Oct. 2021lb$0.3670$0.2957$0.0713
Rice (long grain)Aug. 1-Jul. 31Oct. 2021lb$0.1400$0.1130$0.027
Rice (med/short grain)Aug. 1-Jul. 31Oct. 2021lb$0.1400$0.1140$0.026
PeanutsAug. 1-Jul. 31Aug. 2021lb$0.2675$0.2025$0.065
WheatJun. 1-May 31Aug. 2021bu$5.50$4.50$1.00

PLC Yield Update Deadline

Producers still have the opportunity to update their PLC yields with FSA, but the deadline of September 30th, 2020 is fast approaching. The 2018 Farm Bill allowed for a one time update of yields, which might be beneficial to some producers. This updated yield is found by taking 90% of the farm’s yield for the years that crop is grown from 2013-2017, and then multiplying by an adjustment ratio. If yield in any of these years is less than 75% of the average county yield from 2013-2017, than the 75% of average county yield is used instead of farm yield. The adjustment ratio is found by dividing 2008-2012 average national yield by the 2013-2017 average national yield. A producer can update their PLC yields even if they did not currently enrolled in the program. Also, a producer can choose to update one crop’s yields and not update another crop. For questions on updating PLC yields, please contact Brian Mills (b.mills@msstate.edu ; (662) 686-3238).

 

 

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Will Maples, Extension Ag Economist, Mississippi State University
By Will Maples, Extension Ag Economist, Mississippi State University September 11, 2020 13:49
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