Commodity Programs and Price Support

Commodity programs and price support are federal tools that stabilize farm incomes by protecting against low crop prices and revenue shortfalls. Administered by the USDA’s Farm Service Agency through the Commodity Credit Corporation, these programs cover major crops like corn, wheat, soybeans, cotton, rice, and others, helping producers manage market volatility.

Main Programs

Price Loss Coverage (PLC) pays farmers when national market prices fall below statutory reference prices, using a formula based on historical yields and acreage. Agricultural Risk Coverage (ARC) provides revenue protection, triggering payments at county or individual levels if actual revenue drops below benchmarks—typically 86% of historical averages. Both cap payments at $125,000 annually, with eligibility requiring active farming and income under $900,000. The Marketing Assistance Loan offers harvest-time loans using crops as collateral, letting farmers store and sell later for better prices.

Price Support Mechanics

These safety nets fill gaps between market and support levels, preventing oversupply crashes. Farmers elect programs per commodity via the farm bill. Check USDA farm subsidies eligibility to see if you qualify.

For broader context, explore navigating the farm bill or past farmer bailout proposals during market crises.