OBBBA: Bigger Goverment Payments for Crops

Producers have asked what the One Big Beautiful Bill Act (OBBBA) means for core farm safety-net programs. The following summary explains the key changes to Agriculture Risk Coverage (ARC)/Price Loss Coverage (PLC), including higher triggers and base-acre updates, in plain language.

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Bigger Government Payments for Crops

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What changed:
Farmers who grow crops like corn, soybeans, wheat, and cotton may be able to get larger government payments under the Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) programs. These are long-running programs that help protect farmers when crop prices fall too low or if they have a bad year due to weather or markets.

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Here's what's new:

Higher payment triggers: The government helps subsidize farmers when crop prices fall below a certain threshold by providing subsidies to farmers. The OBBBA increases those thresholds, creating a lower hurdle for farmers to meet before becoming eligible for such subsidies and creates the potential for greater compensation. For example, corn’s reference price went up from $3.70 to $4.10 per bushel. That means if the national average market price of corn falls below $4.10 (rather than the previous $3.70), farmers are eligible for payment under the PLC program.

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Inflation adjustment: Starting in crop year 2031, reference prices will go up slightly each year (by 0.5%), to help keep up with inflation.

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Base acre updates: Farmers may get a chance in 2026 to adjust the number of “base acres” they have – the land tied to farm program payments. Base acres help determine how much you get paid under ARC or PLC. Under the OBBBA, the United Stated Department of Agriculture (USDA) will allow up to 30 million new base acres to be allocated to farms that have historically produced program crops but don’t currently have base acres.

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If you rely on ARC/PLC as part of your risk plan, consider re-running scenarios that reflect the new reference prices and inflation escalator. Keep planting/yield documentation organized ahead of any base-acre updates. Contact LDM with questions about timing, eligibility, and how this interacts with crop insurance.