Shurley: Tracking the 2025 ARC and PLC Situation
August 27, 2026 The One Big Beautiful Bill (OBBB) increased Reference Prices and made other improvements in the ARC/PLC farm income safety net. The OBBB was enacted on July 4, 2025, and was retroactive for the 2025 crop year.
Due to the late passage and signing and the changes in ARC/PLC made, the producer will receive the higher of ARC or PLC for the 2025 crop regardless of any earlier election decision made. Assuming ARC-County, both ARC and PLC will be calculated by crop, by farm, and the higher of the 2 will be paid—by crop, by farm. Payment for the 2025 crop is expected to be made in October 2026.
Any PLC payment depends on the MYA (market year average price). ARC-County depends on this MYA price and also the average yield for the county. None of this is determined/final yet. That is why payment is not made until October of the year following harvest.
A PLC Payment is made if the MYA Price is less than the Effective Reference Price (ERP). Projections of the MYA price are made monthly. Here are the latest projections for MYA price and the PLC payment rate based on the currently projected MYA price.
NOTE: For these selected commodities, the crop marketing year ends either July 31 or August 31. The final MYA price is not known and published until, generally, the end of the following month after the end of the marketing year. So, these MYA prices and resulting PLC rates are subject to change.
The PLC rate is paid on the farm’s historical PLC Payment Yield. The last yield update opportunity was for the 2018 farm bill. For seed cotton, suppose your FSA current cotton update yield is 963 lbs/acre. Your seed cotton PLC Payment Yield would be
963 x 2.4 = 2,311 lbs/acre
Assuming this is the farm’s PLC Payment Yield for seed cotton, the current projection for the PLC Payment would be
2,311 x 0.0811/lb = $187.42 per acre
paid on 85% of seed cotton base acres.
Both PLC and ARC for all crops is expected to be subject to a 5.7% reduction for budget sequestration. In this example, the PLC payment would be reduced to $176.74 per acre.
Any ARC-County Payment is also not currently known. Payment depends on the final MYA Price, the Actual County Yield, and the resulting Actual County Revenue and how that compares with the ARC County Revenue Guarantee. Actual County Yield is unknown as is the final MYA price as already discussed.
We know the producer will be paid the higher of PLC or ARC. So, in our example, the payment (ARC or PLC) will not be less than $187.42, subject to the final MYA price and before sequestration.
For 2025, ARC becomes relevant and the producer will be paid ARC if ARC is higher than PLC. But, how do we know how ARC compares and the chances of ARC>PLC?
IMPORTANT: The PLC Rate, if any, applies to all farms with base of the crop enrolled in PLC. The Total PLC Payment for the crop depends on the farms specific PLC Payment Yield. ARC-County, on the other hand, is based on what happens in the county. Any ARC Payment Rate for the crop, the same rate applies to every farm in the county with base of the crop enrolled in ARC. But, if the farm is in a “HIP county” and has a “HIP factor” (a history of irrigation of the crop), the farms ARC rate will be a weighted average specific to the farm. If not a HIP county, there is only one entry for “All”.
Lets consider an example. This is the 2025 seed cotton ARC Benchmark Revenue and Revenue Guarantee for Decatur County, GA. Decatur County is a HIP county. ARC data is available on-line by year, state, county, and crop: https://www.fsa.usda.gov/resources/programs/arc-plc/program-data
Let’s assume our PLC example of $187.42 with PLC Payment Yield of 2,311 lbs is a Decatur County producer. Could ARC-County give an even higher payment?
ARC-County payment is made if Actual County Revenue (MYA Price x Actual Yield) is less than the Revenue Guarantee. Actual Revenue depends on and is not known until the final MYA Price and Actual County Yield are known and published. This can vary by crop.
Not 100% accurate, but to keep this a simple approximation based on what we already know—
Irrigated Guarantee $1,154.04 – $187.42 = $966.62 Actual Revenue
$966.62 / $0.3389 = 2,852 / 2.4 = 1,188 cotton yield
ARC Irrigated Payment > $187.42 if Actual Yield < 1,188
Non-irrigated Guarantee $652.14 – $187.42 = $464.72 Actual Revenue
$464.72 / $0.3389 = 1,371 / 2.4 = 571 cotton yield
ARC Non-irrigated Payment > $187.42 if Actual Yield < 571
In summary, for the 2025 crop, producers will receive the higher of ARC or PLC by farm by crop. Based on the latest MYA price projection, calculate PLC based on your Payment Yield. How ARC will compare depends on the final MYA price and county yield. Both payments, ARC or PLC, are subject to a 5.7% sequestration reduction.
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