Crop revenue: Cash flow & government support

Crop producers are harvesting what is expected to be a bumper crop this fall, but lower prices have taken a bite out of the resulting revenue and left producers with less to count at the end of the day. The resulting cash flow will challenge producers, although government support will help in time.
Using national projections from August, a corn yield of 188.8 bushels per acre multiplied by a $3.90-per-bushel price would produce $736 per acre in revenue, down from $760 per acre based on May projections of 181 bushels per acre and $4.20 per bushel.
It is down even more from the $771-per-acre revenue projection for the 2024 crop and down sharply from revenue above $1,000 per acre in 2021 and 2022.
For soybeans, the national projections in August of a yield of 53.6 bushels per acre multiplied by a $10.10-per-bushel price would produce $541 per acre in revenue, about equal with the May projection of $538 per acre — but like corn, down sharply from 2021 and 2022 when revenue was around $700 per acre.
The price declines over the past four years have resulted in crop revenue declines nationally of more than $20 billion in corn and $15 billion in soybeans since 2022, even as crop production costs have been slow to decline from record levels.
Aggregate farm income has been helped by record cattle prices and receipts, but for the crop sector, cash flow has been going downhill since 2022, putting pressure on finances just as interest rates have risen.

How about government support?
Amid the cash-flow challenges at present, government support has helped offset some of the pain. Emergency assistance passed in late 2024 was the first package to help, with $10 billion in economic assistance and $21 billion in ag disaster assistance. Commodity program support under the extended farm program provisions for 2024 and the new provisions for 2025 will also help.
The economic assistance was described as temporary help while increased support championed for a new farm bill waited on congressional action. To date, more than $8 billion has been distributed through the Emergency Commodity Assistance Program (ECAP), including $3.2 billion for corn and $2.1 billion for soybeans. In Nebraska, the total payments across all commodities amount to $535 million as of the end of August.
The disaster relief programs will provide additional assistance for 2023 and 2024 losses. To date, a little more than $1 billion has been paid out for livestock losses due to drought and wildfire, but additional assistance is expected for both crop and livestock producers under sign-ups that are just underway this fall.
The 2024 commodity programs will provide some limited cash flow to producers in October, even though the support is based on lower support levels from the previous farm bill. The Price Loss Coverage (PLC) program support will be minimal, with projected payments nationally only for peanuts and seed cotton as of August.
The Agriculture Risk Coverage program at the county level (ARC-CO) or individual coverage level (ARC-IC) will provide more support, but it is limited as most commodity prices for the 2024 marketing year were projected to finish above the level that would trigger ARC payments based on price loss alone.
Of course, ARC pays on revenue losses, so a combination of price and yield losses from benchmark levels will trigger payments in some counties and on some operations. Using the same August price projections, less than half of all counties nationally would see corn or soybean payments.
In Nebraska, ARC-CO payment rates could exceed $100 per acre for corn and $60 per acre for soybeans in some counties with large yield losses, but most counties will not see payments. Averaging across all counties and practices (including the non-payment counties) would produce just $17 per acre for corn and $10 per acre for soybeans. That is enough to help with some operations, but not enough to close the gap on cash flow.

2025 kicks in
The 2025 commodity programs will provide substantially more assistance, given the increased support included in the One Big Beautiful Bill Act signed into law in July. The act increased reference price levels and effective reference price calculations for PLC, as well as guarantee levels and coverage levels for ARC.
The new program rules changed the PLC effective reference price for corn from $4.26 to $4.42 per bushel. At the August price projection of $3.90 per bushel, that translates to a projected PLC payment rate of $0.52 per bushel instead of $0.36 per bushel.
For soybeans, the PLC effective reference price shifted from $9.66 per bushel to $10.71 per bushel. At the August price projection of $10.10 per bushel, that is the difference between no payment and a $0.61-per-bushel payment.
There are similar increases in the effective support levels for ARC. At the Olympic average benchmark prices for 2025 of $5.03 per bushel for corn and $12.17 per bushel for soybeans, the new provisions shift the effective price protection from $4.32 per bushel to $4.53 per bushel for corn, and from $10.46 per bushel to $10.95 per bushel for soybeans assuming benchmark yields.
At these rates, ARC could trigger faster than PLC for 2025 based on price declines alone, but remember that ARC is based on revenue, and above-average yield results would decrease the effective price protection levels.
For producers, the difference between PLC and ARC is irrelevant for 2025. The program will pay the higher of PLC or ARC payment rates since the changes came after program enrollment deadlines. Projections from June under old rules and higher prices would have implied just over $100 million in PLC payments in Nebraska for the four largest program crops (corn, soybeans, wheat and grain sorghum), while new rules and lower price expectations would suggest nearly $900 million in PLC payments.
That should provide a conservative estimate of potential payments for the 2025 crop year, given the “higher-of” rule, but remember that the 2025 crop payments are not due until October 2026 and are subject to price and yield revisions in the meantime.
With the lag in support, there has been talk of additional assistance for producers in response to continued crop price declines and export market losses. Of course, with the lower prices, crop insurance will also offer increased support given price losses from planting-time base levels.
Sorting out projections and cash-flow impacts will be important for producers to determine what is coming from the crop, what is coming from emergency assistance, what is coming from commodity programs, and what is coming from crop insurance. All of them count, and all of them could be important contributors to cash flow and the financial outlook for crop producers in the months ahead.
The author, Brad Lubben, is a Nebraska Extension associate professor, policy specialist and director of the North Central Extension Risk Management Education Center in ag economics at the University of Nebraska-Lincoln. This article was originally printed in Nebraska Farmer. Reprinted with permission.