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Monday, May 09, 2011

It Is Time Again To Consider Enrolling In ACRE.



 

ACRE.  Average Crop Revenue Election.  Yes, you know about ACRE, well at least enough that you did not sign up for it, along with 75% of other farmers in the Cornbelt.  But you may have missed the fact that June 1 is the deadline for enrolling your 2011 crops in the ACRE program, and that is only 3 weeks away.  Here you are fretting to get your 2011 crop planted, and the last thing you want to do is climb off the tractor and stand in line at the FSA office for half a day.  Sorry to add to your frustration, but a decision on your part about ACRE needs to be made.

The reason that most farmers have avoided ACRE in past years has been the fact that payments are less than likely, it is too complex to understand, part of your direct payment has to be sacrificed, and it is too difficult to explain to landlords whose signature is also needed.  On the other hand, it is the only game in town when it comes to supporting farm revenue, if there is a price or production collapse.

Just to guide you to the USDA’s website for details on the ACRE program, you can find all of the necessary fact sheets about the program, but also pay attention to the segment that is headed, “The following files provide ACRE National, State and County data Program Year 2011.” That is the section that provides the price and guarantee details for all of the crops covered by ACRE, should you consider enrolling.

Another web page that you should review was created by University of Illinois agricultural economist Nick Paulson which guides Illinois farmers on making an ACRE decision based on Illinois guarantees.  Within “big picture” the decision will not be much different for your state; however, since ACRE was designed to be friendly to state data instead of national averages, there may be some states that will receive ACRE payments compared to others.

Within that “big picture” remember that ACRE has a 10% change limit either up or down, compared to the prior year.  For 2011, the guarantee for corn was restricted by the 10% limit from rising more than it did, but the opposite was true for wheat, and the guarantee should have fallen further, but was limited by the 10% restriction.  Paulson says futures market activity means there is a lesser likelihood of a corn payment for the 2011 crop and a greater likelihood of a wheat payment for the 2011 crop.  However there is a big asterisk on that statement, which indicates there could be any number of issues that might arise which would prevent a payment from being made.  Keep in mind that payments on 2011 crops will not be made until about October of 2012, if they are earned, both on your farm and in your state.

To find prices for various commodities, use this USDA webpage

To find preliminary acreage guarantees for various states, various commodities, and various methods of production, use this USDA webpage

Another issue that needs to be addressed is that of the CCC-509 form, which sets out the operator and landowner share of ACRE payments.  Although they are not clear, details on CCC-509 can be obtained here

Summary:
The deadline is approaching for making the decision whether or not to enroll your farm in the ACRE program for 2011 crops.  June 1 is the deadline, and that includes signatures of both operators and land owners, which has kept many farms from enrolling in the past.  Economists have indicated that prices, particularly for corn and soybeans will be too high to generate any ACRE payments, but ACRE payments were made on wheat in several states last year and that may be the case in even more states for the 2011 crop.  Payments will not be calculated and made until after September 2012.

Posted by Stu Ellis on 05/09 at 12:00 AM | Permalink

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