Updated PLC Yields Much Higher Than Old Yields

• July 10, 2015
• Paul Neiffer

One of the options available to landowners under the 2014 Farm Bill was to update their yield to 90% of the average yield from 2008 to 2012.  A producer could retain the old CCP yield which in many cases had not been updated since the 1980s or update to the new yield.  Producers who elected ARC-CO or ARC-IC could also update yields even though those yields are not used in ARC calculations.

Below is a chart from the USDA showing the final PLC updated yields versus the old CCP yields:

As you see, most of the updated yields were substantially higher than the old yields.  Of the major crops, corn was up about 28%, soybeans 30% and wheat 32%.  The crops with the largest increase were lentils and large chickpeas at about 65-66%.  All of the pulse crops saw increases greater than 40%.

The lowest increase was safflower at about 10%.

This chart shows the increase in yields for those farms electing PLC only.  I did not show the chart for the farms electing ARC only, but those percentage increases were a little lower than the PLC numbers.  This makes sense since the higher the PLC yield, the greater the PLC payment, whereas the ARC-CO are based on county yields and you normally wanted to switch your lower yielding ground to ARC-CO first before electing PLC on higher yields.

Total wheat acres of slightly more than 10 million acres is almost equal to all of the other covered crops which total slightly more than 12 million acres.

Paul Neiffer, CPA

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