USDA Information Delays Affect Farm Cash Flow Planning

The U.S. Congress passed a “Continuing Resolution” in late December that included $10 billion in farm economic assistance to offset low commodity prices and $21 billion in disaster assistance to provide aid for farmers with losses from natural disasters in 2023 and 2024. Many Midwest crop producers are counting on receiving this extra income in 2025 to help offset the current tight margins in crop production. As of this writing, USDA has not yet released any information through local Farm Service Agency (FSA) offices to provide any details to farmers and ag lenders on what those payments might be. Now that Brooke Rollins has been confirmed as U.S. Secretary of Agriculture, many ag experts are expecting details on these ad hoc programs to be made available very soon.
In addition, it is very difficult to estimate potential 2024 farm program payments for corn and soybeans that were enrolled the Ag Risk Coverage (ARC-CO) program last year, due to changes at the USDA National Ag Statistics Service (NASS). Potential 2025 ARC-CO payments for corn and soybeans will be based on a 12-month average price and final average 2024 crop yield, with any payments occurring in October, 2025. Normally NASS released preliminary average county corn and soybean yields in late February each year, which could then be used to estimate potential ARC-CO payments for the previous crop year. In April of 2024, NASS announced that the agency was discontinuing the release of county yield data beginning with the 2024 yield data that would have been released in 2025. Since there are no other credible sources of county yield data, farmers and ag lenders will now need to wait until late May or early June to get final county yield data from the USDA Risk management Agency (RMA) to estimate potential 2024 ARC-CO payments.
                  Most Midwest farm operators finalize their farm cash flow plans for the upcoming year during the months of January and February, sometimes with the assistance of an ag lender or farm business management advisor. Many times, ag lenders utilize these cash flow projections to determine the viability of farm operating loans for the year. A negative cash flow projection for the year can impact or delay the ability of a farmer to access needed operating credit to purchase seed, fertilizer and other crop inputs for the coming growing season. Due to the low grain prices and very tight projected profit margins for crop production in 2025, many farmers ag lenders are counting on some added income in 2025 from the ad hoc government payments that were approved late in 2024 and potential
2024 farm program payments.
                  Even though we do not have official information of the economic assistance or disaster payments, as well as potential 2024 farm program payments, farmers and ag lenders can rest assured that some of these payments will occur yet in 2025. Following is a summary of the various potential payments:
Farm Economic Assistance Payments
                  One of the most important pieces of the Continuing Resolution legislation that was signed into law late in 2024, which will provide farm economic assistance payments to many crop producers. The economic assistance were established to provide payments to producers of certain crops to offset low prices and poor profit margins for the 2024 crop year. The eligible commodities include barley, corn, cotton, dry peas, grain sorghum, lentils, large chickpeas, oats, peanuts, rice small chickpeas, soybeans, other oilseeds, and wheat. These payments will be based on the planted acres to eligible crops in 2024, as reported to local Farm Service Agency (FSA) offices. In addition, 50 percent of 2024 prevent plant acres to eligible crops will be eligible for payments.
The estimated commodity payment rates range from near $5 per acre for sesame seed to near $80 per acre for cotton. The estimated payment rates for major crops in the Midwest are $42.51 per acre for corn, $29.50 per acre for soybeans, and $30.80 per acre for wheat. It should be noted that these are estimated payment rates, as no official payment rates have been released by USDA. The legislation required the economic assistance payments to be implemented within 90 days of enactment of the legislation, which would be late March in 2025. 2023 and 2024 Disaster Assistance The Continuing Resolution legislation that was enacted in late 2024 also included $21 billion in disaster assistance for 2023 and 2024 agricultural losses from natural disasters, such as drought, hurricanes, severe storms, flooding, wildfires, excessive rainfall, etc. 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. Specific details for the disaster program have not been announced by USDA; however, it is assumed that the payment formula will likely be similar to the Economic Relief Program (ERP) payments from 2020 and 2021. The disaster payments will be implemented by local FSA offices at some point in 2025. Based on the previous formula, disaster payments for corn, soybeans, wheat, and other major commodities would be calculated separately for the 2023 and 2024 crop years and will 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.
Potential 2024 Corn and Soybean ARC-CO Payments
Many crop producers in the Midwest are 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. The reference prices for the PLC program and the benchmark prices for the ARC-CO program for both corn and soybeans increased in 2024. 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. For producers in the PLC program, the final MYA price needs to drop below the crop reference price to earn a payment, as opposed to the ARC-CO program which determines payments based on a final county revenue (county yield and MYA price). Following is a summary of potential 2024 PLC and ARC-CO payments:
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 February USDA 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; however, it is $.50 below the 2024 benchmark price. At the current 2024 MYA price estimate, 2024 ARC-CO payments would initiated with a final 2024 county corn yield that is about 2-3 percent below the 2024 county benchmark yield.
Soybeans - The 2024 PLC soybean reference price is $9.26 per bushel and the soybean benchmark price for ARC-CO payments is $11.12 per bushel. Based on the February WASDE report, the current estimate for the 2024 MYA soybean price is $10.10 per bushel. This is $.84 per bushel above the threshold for 2024 PLC payments; however it is $1.02 below the 2024 benchmark price. At the current MYA price estimate, ARC-CO payments would initiated with a 2024 county soybean yield that is about 4-5 percent below the county benchmark yield.
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 February WASDE report, the current estimate for the 2024 MYA wheat price is $5.55 per bushel. This is only $.05 per bushel above the threshold for 2024 wheat PLC payments and is $.41 below the 2024 benchmark price. At the current MYA price estimate, ARC-CO payments would initiated with a final county wheat yield reduction of about 4 percent below the county benchmark yield. Any 2024 ARC-CO or PLC payments will not be paid until October, 2025. For information on benchmark yields, prices and revenues, and other farm program information, producers should access the USDA ARC-PLC web site
at: www.fsa.usda.gov/arc-plc.     
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]