Parity & Buffer

Parity & Buffer (P&B)

Farmers and ranchers commit land, capital, inputs and labor months or years before they know the price their production will receive at sale.

Parity & Buffer (P&B) is a limited, voluntary pre-season mechanism within the Agricultural Adjustment Act of 2027 that protects 25 percent of planned production from below-cost market pricing while providing producers with better information before planting.

If the applicable market price at sale is below the regional cost-of-production benchmark, P&B pays the difference on the enrolled production sold. If the market price is at or above the benchmark, P&B pays nothing. All production remains privately owned and is sold through normal markets.

Using confidential information gathered at enrollment, P&B provides comparative input-price data by product, supplier, quantity and region, together with anticipated production quantities by commodity and region, helping producers understand market conditions before production decisions become irreversible.

P&B does not fix prices or guarantee income.

Markets determine price. P&B limits downside risk and improves market information before planting.