Higher ARC and PLC Payments Are Coming: What Could They Mean for Your Farm?

Written by: Marty Knapp, Senior Tax Specialist and Eddie Maslin, Crop Insurance Specialist

For many crop producers, USDA's 2025 Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payments are expected to arrive beginning in October 2026. While these payments can provide valuable financial support, they may also create new planning opportunities and tax considerations for your farm.

The important question is not simply how much you may receive, but how to make the most of the payment for your operation. Whether you're focused on strengthening cash flow, investing in the business, reducing risk or managing taxes, understanding the financial impact before the payment arrives can help you make more informed decisions.

More Than a Government Program Payment

ARC and PLC are Farm Service Agency (FSA) administered income support programs designed to help protect producers when crop revenue or commodity prices fall below established levels. For many farms, these programs serve as an important part of a broader risk management strategy.

This year, payments may be larger than many producers have experienced in recent years. As a result, the impact may extend beyond your operating account and influence year-end profitability, taxable income, investment decisions and overall business planning.

A payment can create opportunity, but realizing the full value often comes down to how it is incorporated into your farm's overall financial strategy.

Why Planning Ahead Matters

By the time ARC and PLC payments arrive, many operations will already have most of their annual income picture in place through commodity sales, livestock revenue, custom work and other farm activities.

An additional payment can improve working capital and provide flexibility, but it may also increase taxable income and affect year-end financial decisions. Waiting until tax preparation season to evaluate the impact can limit your options.

Taking time now to estimate the payment and understand how it fits into your operation can help you make proactive decisions rather than reactive ones.

A Team Approach to Maximizing Value

Every farm is different, which is why evaluating ARC and PLC payments should involve more than a quick tax calculation. The greatest value often comes from looking at the payment through both risk-management and financial-planning lenses.

Your Crop Growers Risk Management Advisor can help you understand how ARC and PLC fit alongside crop insurance, market risk and your overall risk management strategy. Your Farm Credit East Tax Advisor can help you evaluate the potential impact on taxable income, cash flow, planned purchases and other year-end decisions.

Together, they can help you:

Estimate the financial impact of anticipated ARC or PLC payments
Understand potential tax implications before year-end
Evaluate cash flow and working capital opportunities
Consider upcoming business investments and capital purchases
Align risk management, profitability and tax-planning decisions
Strengthen the long-term financial position of the operation

Questions to Consider Before Payments Arrive

As payment estimates become available, consider discussing these questions with your advisor team:

How could the payment affect my year-end taxable income?
Are there opportunities to improve cash flow or working capital?
Should planned equipment purchases or other investments be reconsidered?
How does this payment fit within my broader risk management strategy?
Are there additional planning opportunities I should evaluate before year-end?

Turn Program Payments into Better Business Decisions

ARC and PLC payments can provide meaningful financial support, but the greatest benefit often comes from understanding how those dollars fit into your farm's bigger picture.

By evaluating potential payments before they arrive, producers can better position themselves to make informed decisions about profitability, taxes, risk management and future growth.

If you expect to receive an ARC or PLC payment this fall, now is a good time to connect with your Farm Credit East advisory team. Together, your Crop Growers Risk Management Advisor and Tax Advisor can help you understand the impact on your business and identify opportunities to maximize the value of the payment.