Farmers should see bigger Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payments for the 2025 crop year by the end of October. The checks are likely to be record-setting, but Farm CPA Paul Neiffer points out those payments could be smaller than lawmakers and budget scorekeepers projected a year ago.
Last week, USDA announced that the Farm Service Agency’s Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) will generate approximately $13.8 billion in gross payments to eligible agricultural producers for the 2025 crop year. USDA says that’s the largest annual payout by far since these key safety net programs were established in the 2014 Farm Bill.
What coudl the actualy payments be? The payments will vary by state and county, but University of Illinois economists with farmdoc daily, working with colleagues at the University of Minnesota and Ohio State University, published their estimates now that USDA has released marketing year average prices for nearly all eligible commodities. According to their estimates,
- Corn payments are projected to average $51 per base acre, down from $62 in the original forecast.
- Soybeans are estimated at $29 per base acre
- Wheat at $47 per acre
- Seed cotton comes in at $119 per base acre, and peanuts at $244.
Their estimates show rice carries the highest per-acre support. Payments are estimated at $120 per base acre for medium-grain and $344 for long-grain. But economists point out rice estimates could still shift because final prices for the three rice types have not been set.
Total Projected Payments Lower Than USDA
Farmdoc daily puts total payments across all eligible commodities at just over $13.2 billion, below the $13.8 billion figure USDA has publicized. The researchers say the gap could come from farm-level PLC payment yields that county averages can’t capture, payments on irrigated acres, rice estimates that aren’t final, and individual payment limits.
$9 billion of the total will come from cotton, soybeans and wheat. According to their breakdown, the total figure would be a record-high for each, and includes:
- corn ($4.7 billion)
- soybeans ($1.5 billion)
- wheat ($2.9 billion) make up just over $9 billion of the total.
Why Payments Are So Large
The farmdoc estimates show final 2025 marketing year average prices came in at $4.16 per bushel for corn, $10.50 for soybeans and $5.06 for wheat, all below their effective reference prices. That produces PLC payment rates of $0.26 per bushel for corn, $0.21 for soybeans and $1.29 for wheat.
The One Big Beautiful Bill Act added to the support. It raised PLC reference prices, lifted the ARC-CO coverage level from 86% to 90% and raised the per-acre payment cap from 10% to 12% of benchmark revenue. Because the law was signed after the 2025 enrollment period closed, farmers who enrolled in either program will receive whichever pays more.
Paul Neiffer’s Estimates
Paul Neiffer, a farm tax expert who ran his own estimates, says his work lands very close to the university’s.
“On corn, I was about four and a half billion, somewhere between $4.5 billion,” Neiffer says. “On wheat, I was a little bit less than $3 billion. And then on soybeans, I thought it’d be about $1.5 billion, the same on cotton and rice.”
Payments Are Already Going Out
Neiffer says while USDA says payments will be sent by the end of hte month, some money has already reached farmers.
“I’ve already heard some farmers have gotten payments, so they are starting to go out,” he says. “Their estimate of about $13.8 billion before the 15% cut for the base acres and the sequestration cut are very similar to what University of Illinois came out with.”
Farmers shouldn’t count on much county-level detail for PLC. “The problem is, I don’t know if we’re going to get
Payment Limits Depend on How Your Farm is Structured
Farmdoc daily notes that its totals include the 85% payment factor but not the 5.7% sequestration cut that will be applied to payments issued to producers.
But according to Neiffer, how an operation is set up will determine how much of the money a farm keeps.
“It definitely matters how your business is structured,” Neiffer says. “If you’re an LLC or an S Corp or a C Corp, you’re stuck with one payment. Even if you have five owners, you’re stuck with one payment. If you’re a partnership and you have five owners, you have five payment limits. So even after that $13.5 billion, there’s going to be another cut. And easily that cut could be a billion that’s going to reduce the payments even more.”
Smaller Than Congress Counted On
While The payments come from the One Big Beautiful Bill, and many farmers have been waiting on the relief lawmakers promised would arrive in October. Neiffer says the money falls short of the original projections.
“I would say they’re about 20% less than what was expected, what the CBO scored, because remember a year ago, pricing was definitely lower than it is now. So CBO was using those numbers,” he says. “I think they originally calculated about 16 billion, and net-net we’re probably going to be about 12 billion after all the base acre cuts and so on. So it’s down probably 25% less than they originally expected.”
Could Farmers See Bigger or Smaller Payments in 2026?
Farmers face a new decision for the 2026 crop year. USDA has opened enrollment, with a deadline of December 11, 2026. Unlike 2025, producers must choose between ARC and PLC for their base acres, because the higher-of-both allowance was a one-time rule. The OBBBA parameters stay in place for the 2026 through 2031 marketing years.
Neiffer says the extra base acres will help, but prices could cut the other way.
“Remember, they got the extra 30 million base acre increase, so that’s going to increase their payments on average about another 11 or 12 percent,” he says. “However, if pricing stays where it’s at right now, based on their projections, corn, soybeans and wheat might not have very much of a payment at all. So remember, this year it was about eight or nine billion with where prices are right now. If prices stay pretty good, maybe we’re only looking at three or four billion. So there could be a pretty big hit on ARC and PLC payments going out next year.”
Neiffer’s Advice? Plan for Taxes Now
With so much money flowing to farms this year, Neiffer says tax planning matters more than usual.
“I think the key is there’s been a lot of payments paid out to farmers this year, so this year is probably more important than any other year to make sure you meet with your CPA or your tax advisor to do a good year-end tax plan,” he says.
