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2017 PLC and ARC Payments, and 2018 Forecast

Posted by Blythe Howell | February 6, 2019

Total payments to Washington producers under the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) government programs for 2017 crops (paid Fall 2018) were $35,317,646. PLC payments totaled $10,898,805, and ARC payments for Washington farmers came to $24,418,841.

PLC payments result when the national average marketing year price is below the PLC national reference price. For wheat, the reference price is $5.50 per bushel.

The last USDA estimate for 2018 PLC wheat payments was based on the December 11, 2018 projected marketing year price of $5.15 per bushel (the marketing year runs from June 1, 2018 through May 31, 2019 – thus we are almost 3/4 of the way through the year). If realized, this price would result in a PLC payment of $0.35 per bushel. Due to the government shutdown, the average annual price projection has not been updated since December, but USDA will release a new price projection on Friday, February 8.

Current wheat futures prices coupled with cash prices received through January 2019 suggest the actual market year average price for wheat will be closer to $5.19 per bushel, slightly higher than USDA’s December estimate. If this proves out, the actual PLC payment for 2018 will be $0.31 per bushel, or $0.04 per bushel less than forecast by USDA back in December.

ARC county payments are based on crop revenue being less than the reference revenue calculated as the combination of the Olympic average price and Olympic average yield over the last 5 years. The Olympic average price is calculated using the higher of the market average price or benchmark price ($5.50) each of the last 5-years. The calculation throws out both the high and low price and then averages the remaining three.

The Olympic average yield is calculated from actual county average yields the last 5-years, again throwing out the high and low before calculating the average. The 5-year Olympic yield for 2018 payments is already known based on the yields experienced from 2014 through 2018. These are presented in the table below for Washington counties.

Only 2 of the last 5 years had a marketing year average price above the benchmark price, and the highest of those is thrown out to compute the Olympic average. Thus, the projected price for 2018 ARC payments is $5.66 per bushel (based on the average benchmark $5.50 price for 2016 and 2017 when actual prices were below the benchmark and the actual market price of $5.99 in 2015). The low price this year is thrown out, and the $6.87 average market price for wheat in 2014 is thrown out.

Using $5.66 per bushel and the yields in the table below will allow producers to calculate the reference revenue against which ARC payments will be made. If the actual market price at the

end of the marketing year ends up being $5.19 per bushel as forecast above, this will be multiplied by the 2018 realized yields to determine the actual ARC payment for 2018.




Adams Wheat 51
Asotin Wheat 54
Benton Wheat 51
Chelan Wheat 53
Columbia Wheat 72
Douglas Wheat 44
Ferry Wheat 61
Franklin Wheat 121
Franklin Wheat 35
Garfield Wheat 64
Grant Wheat 115
Grant Wheat 47
Island Wheat 75
Kittitas Wheat 85
Klickitat Wheat 35
Lincoln Wheat 58
Okanogan Wheat 36
Skagit Wheat 76
Snohomish, North King Wheat 78
Spokane Wheat 59
Stevens Wheat 53
Walla Walla Wheat 75
Whatcom Wheat 75
Whitman Wheat 70
Yakima Wheat 113
Yakima Wheat 16

Randy Fortenbery
For questions or comments, contact Randy Fortenbery via email at or by phone 509-335-7637.

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