The One Big Beautiful Bill Act increased the statutory reference price and made some enhanced changes to the effective reference price (EFR).
The EFR is used to calculate payments for Price Loss Coverage (PLC) and also affects the benchmark price used in the Agricultural Risk Coverage (ARC) calculations. The price used to calculate the benchmark price can’t be lower than the EFR for each year. The ARC benchmark price is an Olympic average of the last five years (excluding the most recent year). For example, for the 2025 crop year you take the mid-year average (MYA) price for the 2019-2023 crop years and throw out the high and low price and take the average of the remaining three to get the final benchmark price.
Instead of using 85% of the Olympic Average of the previous five-years of MYA prices (the average cash price received by farmers during the crop marketing year), the new calculation uses 88% which effectively increases the EFR for many commodities. The old cap of 115% of the statutory reference price remains, however, with a larger increase in statutory reference prices, all commodities have seen an increase in the EFR that will be used to make either PLC or ARC payments and the increase can be substantial.
Starting with the 2031 crop year, the statutory reference price will be increased by .5% each year but with a maximum 13% total increase.
What does this mean for farmers? About 70 million base acres were enrolled in PLC for 2025 and about 172 million acres for ARC. Many farmers were concerned that the changes to ARC and PLC would penalize them if they made the wrong election for 2025 on ARC or PLC. Congress understood this dilemma and added a provision to automatically pay the higher or ARC or PLC but only for the 2025 crop year.
Another issue for many farmers is regarding the payment limit. If there was no increase, then many farmers would not get any extra payments and Congress fixed this partially by:
- Increasing the payment limit to $155,000 (indexed to inflation starting with the 2026 crop), and
- Allowing LLCs and S corporations to have multiple payments similar to general partnerships.
Since we know that USDA will pay the greater of PLC or ARC, we can start with calculating PLC payments for Minnesota and Wisconsin. USDA provides information for each county in Minnesota and Wisconsin for calculating ARC projected payments. This information includes the average benchmark yields (which is an Olympic average of the previous five years excluding the most recent year).
PLC yields were allowed to be updated with the 2014 Farm Bill. This update increased the yields (if there was an increase) to 90% of that average yield.
For purposes of the tables I am providing, I assumed that the average PLC yield was equal to 80% of the benchmark yield. I am providing the tables for each state and then will show you how to use them to determine your estimated 2025 ARC/PLC payments to be received starting October 2026.
Here is the Minnesota Table:
| Average PLC Yield | Average PLC Payment | Average ARC | Higher of Two | |
|---|---|---|---|---|
| Barley | 51.39 | $7.71 | $2.00 | $7.71 |
| Canola | 1,463.91 | $25.62 | $12.72 | $25.62 |
| Corn | 151.39 | $78.72 | $96.51 | $96.51 |
| Grain Sorghum | 65.03 | $63.08 | $51.69 | $63.08 |
| Oats | 54.21 | $0.00 | $17.82 | $17.82 |
| Soybeans | 40.12 | $28.49 | $32.75 | $32.75 |
| Sunflower Seed | 1,766.84 | $12.37 | $0.00 | $12.37 |
| Wheat | 40.91 | $51.13 | $42.83 | $51.13 |
Here is the Wisconsin Table:
| Average PLC Yield | Average PLC Payment | Average ARC | Higher of Two | |
|---|---|---|---|---|
| Barley | 40.09 | 6.01 | 1.55 | $6.01 |
| Corn | 144.13 | 74.95 | 91.88 | $91.88 |
| Grain Sorghum | 45.60 | 44.23 | 36.25 | $44.23 |
| Oats | 48.12 | – | 15.82 | $15.82 |
| Soybeans | 40.88 | 29.02 | 33.36 | $33.36 |
| Sunflower Seed | 1,574.32 | 11.02 | – | $11.02 |
| Wheat | 48.52 | 60.65 | 50.80 | $60.65 |
Remember that final 2025 crop year payments will be automatically the higher of the ARC or PLC. However, you must then multiply final payments by 85% to arrive at the actual payment you may receive since you are only paid on 85% of base acres. Plus, there is also a chance of about a 5% sequestration adjustment to the final payment.
Therefore, for each crop I would suggest taking your base acres for each crop multiplying it by the higher of the two payments (ARC or PLC) and then multiplying that number by 80%. Finally, you need to make sure you do not hit the payment limit of $155,000 per person.
The average ARC payment is based on county yields being about 103% higher than benchmark yields. In many cases, yields might be a little higher or lower. There likely are only two crops where ARC will be higher – corn and oats.
You will need to determine the PLC for your crops by taking your PLC yield and then comparing it to the average yield I am showing in the chart. For example, assume your Minnesota corn PLC yield is 180. The average PLC yield for Minnesota is 151.39. 180 divided by 151.39 is 119% (rounded). Your PLC payment would be $93.68. However, the estimated county ARC payment is about $97 and you could still use that number.
Care must be taken in budgeting these numbers since it is based on the current MYA price projections from USDA. If final MYA prices are higher your ARC/PLC payment will be lower and conversely the opposite is applicable if prices are lower.
However, if prices increase, likely that would result in higher prices than are in your budget.
The bottom line – these charts can help you budget for 2025 ARC/PLC payments to be paid in October 2026.
