USDA Announces Some Information On Disaster Assistance

The Continuing Resolution legislation that was passed by Congress in late 2024  included $21 billion in disaster assistance for 2023 and 2024 agricultural crop losses from natural disasters, such as drought, hurricanes, severe storms, flooding, wildfires, excessive rainfall, etc. Recently USDA Ag Secretary, Brooke Rollins, announce some initial details for the disaster programs, which includes assistance for crop and livestock producers. Farmers and ranchers in many portions of the U.S. may qualify for the disaster payments for one or both years, including the Upper Midwest that had areas impacted by drought in 2023 and by excessive rainfall in 2024. The disaster payments will be implemented by local FSA offices during the coming months.
 
Based on comments from Secretary Rollins, details of the 2023 and 2024 disaster assistance program for crops will likely be available by late May. Sign-up for the program at local Farm Service Agency (FSA) offices is set to begin by July 7, 2025.  Based on discussions when the legislation was passed, it is assumed that the payment formula will likely be similar to the Economic Relief Program (ERP) payments from 2020 and 2021. These payments would like be based on USDA Risk Management Agency crop insurance data, The RMA data for the 2024 crop year will not be finalized until early June. There may also be a separate disaster program enrollment period later this Summer for crop losses on crops that are not eligible for crop insurance.
 
Based on the previous calculation formula, disaster payments for corn, soybeans, wheat, and other major commodities would be calculated separately for the 2023 and 2024 crop years, and would likely be based on reported crop insurance yields. The payments would be additional payments over and above the crop insurance indemnity payments that were already paid. The payment formula will likely be based off of a set percentage of the crop insurance revenue guarantee for the year (APH yield x Spring price guarantee) minus the actual crop value (final yield x Fall harvest price),  minus crop insurance indemnity payments that were paid, and then factored by a set percentage. There will likely be separate payment limits for each year of the disaster program, as well as a separate payment limit for the ECAP payments.
 
Update on Economic Commodity Assistance Program (ECAP) Payments
Sign-up has begun for the Economic Commodity Assistance Program (ECAP) payments for crop producers started in late March and will continue until the sign-up deadline, which is August 15, 2025. Sign-up for the ECAP program is being administered by the USDA Farm Service Agency, and sign-up for the program can be done either online on the FSA website or in person at local FSA offices. The ECAP payments were implemented to offset low crop commodity prices in late 2023 and 2024, as well as poor profit margins for the producers of most major crops raised in the U.S. Corn, soybeans, wheat, and other farm program crops are eligible for the ECAP payments. The payments are based on the planted acres to a crop in 2024, and also include 50 percent of prevented planted acres last year. Complete ECAP details and sign-up details are available on the following website: https://www.fsa.usda.gov/resources/programs/emergency-commodity-assistance-program.
 
As of May 5, USDA had processed over 472,000 ECAP applications and paid out over $7.3 billion in ECAP payments. It is estimated that over 85 percent of the eligible acres have been enrolled in the ECAP program. Approximately $3 billion in ECAP payments has been paid for 2024 corn acres, and $2 billion for soybean acres, with about $933 million for wheat acres and $705 million for cotton acres. There was about $500 million paid for all other eligible crops, most which are grown regionally and have small national acreage totals. Producers in Iowa had received the most ECAP payments at $688 million, followed by Illinois at $630 million, Texas at $602 million, North Dakota at $554 million, Kansas at $516 million, Minnesota at $508 million, and Nebraska at $495 million. The initial ECAP payment that is being distributed is 85 percent of the total calculated ECAP payment, so there is a possibility that eligible producers may receive another smaller ECAP payment later this year.
Potential for 2024 Corn and Soybean ARC-CO Payments
Crop producers in some areas of the Midwest are wondering about the potential for 2024 corn and soybean ARC-CO payments later this year. Many farmers in the region were enrolled in the “revenue-based” Ag Risk Coverage (ARC-CO) farm program choice for the 2024 crop year, rather than the “price-only” Price Loss Coverage (PLC) program. To earn a PLC payment for 2024 for a given crop, the final MYA price needs to drop below the 2024 crop reference price. 2024 ARC-CO payments are based on the final county revenue (2024 county ave. yield x the final MYA price), compared to the 2024 benchmark (BM) revenue (2024 county BM yield x BM price x .86). Any 2024 PLC or ARC-CO payments will be paid after October 1, 2025.
 
The marketing year to determine the 2024 market year average (MYA) prices for corn and soybeans is from September 1, 2024 through August 31, 2025. The marketing year to calculate MYA prices for wheat and other small grain crops is from June 1, 2024 through May 31, 2025. The 12-month national average MYA price for a given crop is based on the monthly average market price received by farm operators across the United States, which is then “weighted” at the end of the year, based on the volume of bushels sold in each month. The USDA MYA price estimates can be tracked on a monthly basis in the monthly USDA World Agricultural Supply and Demand Estimates (WASDE) reports. The next WASDE report will be released on June 12, 2025.
 
Following is an update on the potential 2024 PLC and ARC-CO payments:
This summary is based on the national average price estimates in the May 12 WASDE report.
Corn - The 2024 PLC corn reference price is $4.01 per bushel and the benchmark price for ARC-CO payments is $4.85 per bushel. Based on the May WASDE report, the current estimate for the 2024 MYA corn price is $4.35 per bushel. This is $.34 per bushel above the threshold for 2024 corn PLC payments, so 2024 PLC payments are not likely. The estimated MYA price is $.50 below the 2024 benchmark price, which will likely initiate 2024 ARC-CO payments in many counties with reduced crop yields in 2024.  At the current 2024 MYA price estimate, , and ARC-CO payments would initiated with a final 2024 county corn yield that is about 3-4 percent below the county benchmark yield, which will likely include many southern Minnesota counties.
 
Soybeans - The 2024 PLC soybean reference price is $9.26 per bushel and the benchmark price for ARC-CO payments is $11.12 per bushel. Based on the May WASDE report, the current estimate for the 2024 MYA corn price is $9.95 per bushel. This is $.69 per bushel above the threshold for 2024 soybean PLC payments, so 2024 PLC payments are not likely. The estimated MYA price is $1.17 below the 2024 benchmark price, which will likely initiate 2024 ARC-CO payments in many counties with reduced crop yields in 2024.  At the current 2024 MYA price estimate, , and ARC-CO payments would initiated with a final 2024 county soybean yield that is about 2-3 bushels below the county benchmark yield, which will likely include many counties in Minnesota.
 
Wheat - The 2024 PLC wheat reference price is $5.50 per bushel and the 2024 wheat benchmark price for ARC-CO payments is $6.21 per bushel. Based on the May WASDE report, the current estimate for the 2024 MYA wheat price is $5.50 per bushel. This is at the threshold for 2024 wheat PLC payments and is $.71 below the 2024 benchmark price. At the current MYA price estimate, a small 2024 PLC payment is still possible, and ARC-CO payments would initiated with a final county wheat yield reduction of about 3-4 percent below the county benchmark yield.
 
For information on benchmark yields, prices and revenues, and other farm program information, producers should access the ARC-PLC web site at:  www.fsa.usda.gov/arc-plc.  Final county yields for 2024 will be available by early June and will be based on RMA crop insurance data. Kent Thiesse has prepared an Information Sheet titled “2024 Farm Program Payment Potential”, which is available by contacting: [email protected].
 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group
Phone - (507) 381-7960; E-mail - [email protected]