USDA issues safety net payments – Alabama Peanut Producers Association

On Monday, October 26, 2015, USDA announced that nearly 1 million farmers will receive safety-net payments from the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) programs for the 2014 crop year. The programs provide important financial protection against unexpected changes in the marketplace. More than 1.7 million farmers and ranchers participate in ARC or PLC. Peanut farmer in field

The ARC/PLC programs allow producers to continue to produce for the market by making payments on a percentage of historical base production, limiting the impact on production decisions.

Nationwide, 96 percent of soybean farms, 91 percent of corn farms, and 66 percent of wheat farms elected the ARC-County coverage option. Ninety-nine percent of long grain rice and peanut farms, and 94 percent of medium grain rice farms elected the PLC option. For more info, visit

Crops receiving assistance include barley, corn, grain sorghum, lentils, oats, peanuts, dry peas, soybeans, and wheat. ARC-individual payments will begin in November. Upland cotton is no longer a covered commodity.

The Budget Control Act of 2011, passed by Congress, requires USDA to reduce payments by 6.8 percent. For more information, producers are encouraged to visit their local Farm Service Agency office.

According to the report, peanut farms total 49,356 with a total peanut base acres of 2,020,243 peanut base acres in 17 states. (List available upon request) A total of 49,026 farms selected PLC with a base total of 2,013,443. A total of 329 farms selected ARC with a base of 6,781 acres. “Unlike the old direct payments program, which paid farmers in good years and bad, the 2014 Farm Bill authorized a new safety-net that protects producers only when market forces or adverse weather cause unexpected drops in crop prices or revenues,” said Agriculture Secretary Tom Vilsack. The nearly $5.5 billion provided by the ARC and PLC safety-net programs will give assistance to producers where revenues dropped below normal.”

PAYMENTS ON PEANUT BASE – Earlier this year, USDA declared the national average price of peanuts for the marketing year 2014 was $440 per ton ($.22/lb). The Farm Bill provides that the reference price for peanuts is $535 per ton ($0.2675/lb). To obtain the PLC payment amount deduct the average price from the reference price and that is the peanut PLC payment of $95 per ton ($0.0475/pound). Congress passed the Budget Control Act of 2011 and the reconciliation reduction (sequestration) is now 6.8 percent. Deduct the 6.8 percent from the $95 per ton ($0.0475/lb) and get $88.54 per base ton ($0.04427/lb). Payment acres are 85% of the farm’s base acres. There is a separate peanut payment limitation. Payments are limited to $125,000 per eligible producer. Payment limitation includes benefits received from peanut market loan gains, loan deficiency payments, and ARC/PLC payments for peanuts. Reports indicate payments should be received this week.