Subsidies for Soybean Farming

Prior to the 2014 Farm Bill, the two largest components of aid were direct payments and countercyclical payments. Direct payments were calculated based on the farm's base acreage, which reflects the historical area planted to soybeans and an average yield. This meant that farmer payments stayed the same under this program even after they had reallocated their plantings. Between 2008 and 2012, soybean growers were eligible for payments of $0.44 per bushel on approximately 85.0% of their land. Counter-cyclical payments are made to farmers whenever the price of soybeans (including the direct payments) falls below a predetermined value. Starting in 2010, the target rate for soybeans was set at $6.00 per bushel.

The 2014 Farm Bill eliminated direct and countercyclical payments in favor of two new programs called Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC). Under the 2014 Farm Bill, farmers are required to select between one of these two new programs. The one-time election will stand for the entire duration of the farm bill. Under the Price Loss Coverage program (PLC), farmers receive payments if the average US price falls below a certain reference point; for soybeans, this threshold is $8.40 per bushel. Under the Agricultural Risk Coverage program (ARC), payments are determined by county and kick in when actual crop revenue is below a guarantee for a crop year. The guarantee is calculated at 86.0% of county ARC benchmark revenue. Additionally, coverage is capped at 10.0% of the benchmark revenue, meaning coverage is only between 76.0% and 86.0%.

If farmers neglect to select between PLC and ARC, they default to PLC. Additionally, yearly coverage is capped at $125,000 for an individual or $250,000 for a married couple. If an individual's three-year average adjusted income is greater than $900,000, they are not eligible for payments.

More recently, the 2018 Farm Bill was passed resulting in some modifications. For instance, ARC and PLC are authorized from 2013 to 2023. Producers can make a new election to obtain ARC or PLC for the 2019 crop year, which also applies to the 2020 crop year. Producers can change elections annually during the 2021 through 2023 crop years. In addition, owners can update the farm’s PLC payment yield as of the 2020 crop year. In addition, in July 2019 the USDA authorized up to $12.0 billion in financial assistance as part of a trade aid package for certain agricultural goods producers, including soybeans.

During the COVID-19 (coronavirus) pandemic, the USDA sent aid payments to soybean farmers, setting the payments at 45 cents per bushel. Meanwhile due to the Russian invasion of Ukraine during 2022, the Biden administration proposed sending farmers $500.0 million to boost production to make up for the crops lost in Ukraine. Part of this subsidy includes soybeans; however, many farmers and politicians have questioned the action due to crops already fetching high prices. As a result, 2022 and 2023 are expected to experience minimal increases. During 2024 and 2025, outlays are expected to be volatile with minimal growth occurring during 2024 and decreases during 2025.