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A first: Three years of high prices pushed up the marketing year average for corn and soybeans.

Jacqueline Holland, Grain market analyst

March 11, 2024

2 Min Read
Field of corn and soybeans in late summer
Getty Images/Nastasic

Coming off three consecutive years of high prices, the marketing year averages for corn and soybean prices exceed the statutory reference prices for these commodities, as outlined in the farm bill, for the first time ever.

The 2024 effective reference prices are $4.01 for corn, up 31 cents, and $9.26 for soybeans, up 86 cents. Wheat stayed the same, holding at $5.50.

These numbers are important for farmers who enroll in Agriculture Risk Coverage, which includes options for payments based on farm-level (IC) and county-level (CO) farm revenues, and/or Price Loss Coverage programs. The deadline to enroll and finalize acreage with the Farm Service Agency is March 15.

Nuts and bolts

ARC and PLC calculations use the higher of an Olympic average (in a set of five numbers, remove top and bottom numbers, and average the remaining three) for national marketing year average prices, or the statutory reference prices.

Effective reference prices for corn, soybeans and wheat in 2024

In 2023, MYA prices for wheat soared to a record high of $8.83 per bushel, while MYA prices per bushel for corn at $6.54 and soybeans at $14.20 trailed 2012 prices as the second highest on record. Since 2018, MYA prices for all three commodities have been in the top 16 highest for each commodity.

Because the Olympic average of recent MYA prices are so high, this year will be the first time that 85% of the Olympic average of MYA prices will be used as the effective reference price for corn and soybeans, instead of the statutory reference price.

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That means that if producers sign up for an ARC or PLC program this year, and if ag commodity prices continue to drift lower, farmers are more likely to receive payouts from these insurance programs than in the past few years when prices have been high.

Exposed risk

ARC payments typically occur when there is a widespread yield loss, though they also include a revenue component using the effective reference prices. PLC payments are paid when prices dip below the effective reference price.

Through early January, ARC-CO policies appeared to have the best chance of payouts, though PLC could offer coverage if commodity prices drop at a precipitous rate. Corn revenues are at highest risk here, especially if Brazil can salvage a decent safrinha corn crop in the coming months.

All said, however, neither of these tools offers a high likelihood of payout this year without catastrophic weather or market events.

About the Author(s)

Jacqueline Holland

Grain market analyst, Farm Futures

Holland grew up on a dairy farm in northern Illinois. She obtained a B.S. in Finance and Agribusiness from Illinois State University where she was the president of the ISU chapter of the National Agri-Marketing Association. Holland earned an M.S. in Agricultural Economics from Purdue University where her research focused on large farm decision-making and precision crop technology. Before joining Farm Progress, Holland worked in the food manufacturing industry as a financial and operational analyst at Pilgrim's and Leprino Foods. She brings strong knowledge of large agribusiness management to weekly, monthly and daily market reports. In her free time, Holland enjoys competing in triathlons as well as hiking and cooking with her husband, Chris. She resides in the Fort Collins, CO area.

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