What 2025 Effective Reference Prices May Look Like

We work up estimated 2025 Effective Reference Prices based on House Ag Proposal and incorporate 2024 GOP Senate Ag Committee proposals

Photo by Jeremy Bishop on Unsplash

We have previously posted on the House Ag Committee proposals and thought we would provide an estimate of what 2025 Effective Reference Prices might look like assuming the changes are finally passed.

Remember that we have references prices which are fixed by law, but the actual price used for PLC or ARC (in some cases) is based on the effective reference price (EFR). EFR is annual calculation that allows the EFR to rise up to the lessor of:

• 115% of the reference price, or

• 85% of the Olympic Average of the last five year’s MYA prices.

But the EFR can’t drop below the current reference price.

As an example, the current corn reference price is $3.70. 115% of that number is $4.26. 85% of the last five years of corn MYA is $4.27, therefore, the EFR will be limited to $4.26.