US Farm Program's Hidden Yield Issue: A Growing Concern

The Price Loss Coverage (PLC) base yield is another critical component of the US farm commodity program, but it has been largely overlooked compared to its counterpart, the PLC base acres. Like base acres, PLC base yields are established using a historical period and fixed until Congress authorizes an update.

However, as crop practices and genetics improve over time, PLC base yields start to diverge from current yields for most crops. For example, barley, oats, rapeseed, corn, two types of rice, and soybeans have a PLC base yield that is more than 20% below trendline yield.

Updating both base acres and PLC base yields simultaneously can help reduce losses in supported production. In fact, for crops with more base acres than planted acres, updating both would result in a nontrivial reduction in the loss of supported production.