USDA extends ACRE sign-up by 10 weeks

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NOTE: After this blog was written, USDA announced ACRE signup would begin April 27.

USDA has extended the sign-up deadline from June 1, to Aug. 14, 2009, for both the Direct and Counter-cyclical Program (DCP) and the forthcoming Average Crop Revenue Election (ACRE) Program. This action extends the sign-up deadline by 10 weeks to give producers ample time to decide whether to participate in ACRE or remain in DCP.

Sign-up for ACRE is expected to start in late April, with an official sign-up announcement to be made in the coming weeks. Producers can elect ACRE at their FSA county office after the sign-up period commences. The original June 1 deadline may have forced producers to rush their decision, which is why this extension gives producers more time to make an informed decision about staying with DCP for 2009 or participating in ACRE for crop year 2009 and beyond through 2012.

ACRE appeals to Northern producers

Pat Westhoff, analyst for the University of Missouri's Food and Agricultural Policy Research Institute, explained if the decision was based strictly on economics, about 60% of the nation's farmers would participate in the program.

In its latest 10-year baseline projections, FAPRI estimated for corn and most other crops grown in northern states, average ACRE payments over time are likely to exceed the payments participants must forego.

Westhoff expects major benefits are larger relative to other payments for those who produce corn, soybeans and wheat, while those who produce cotton and peanuts do not see those same payouts.

"The average benefit is probably greater for most of producers if enrolled in ACRE," he said. "There are new exceptions to that rule. The baseline shows a drop in prices and makes the potential for benefits greater than they otherwise would be."

FAPRI estimated average ACRE payments are greater in 2009/10 and 2010/11 than in later years. Projected average prices for grains and oilseeds fall in 2009/10 relative to the 2007/08-2008/09 prices used in calculating ACRE benchmark revenues, which increases the likelihood of ACRE payments.

In later years, ACRE payments decline as average prices rise and increase when average prices level off or fall.

Producer uncertainty

Westhoff said in talking to farmers there is a lot of concern and uncertainty in ACRE. Final rules are still not written, and as seen in other farm programs enacted in the farm bill the Administration does not always keep the original intent of the rule.

Farmers do not have to sign up the first year, but can wait until anytime in the life of the farm bill. High crop prices in 2007 and 2008 seem to favor early participation, as a state revenue guarantee cannot change more than 10%, up or down, each year.

Signup runs April 1 to June 1 at local U.S. Department of Agriculture Farm Service Agency offices.

Westhoff expects a "very low participation rate" because of the many unknowns. And when producers sign up for crops planted in 2009, payments won't come until October 2010.

Calculating payments

While FSA has not published final rules, farmers can calculate alternatives. One available tool is available from FAPRI.

Complex calculations are solved by the FAPRI FARM Tool. The ACRE program requires crop-yield history for crops grown for the past five years. Farmers must also enter their FSA farm unit ID numbers.

In the software, FAPRI asks producers to enter 10 years of crop yields, if available. "This gives a statistically stronger answer on the probability of payments under ACRE,•bCrLf said Peter Zimmel at FAPRI.

"FAPRI ACRE Risk Management Tool (FARM Tool) Users' Guide•bCrLf and software are at www.fapri.missouri.edu. The tool is unique in two ways, Zimmel said. It offers whole-farm analysis. Also, it adds risk analysis to the simulations, based on the FAPRI 10-year baseline.

Iowa State University's Center for Agricultural and Rural Development (CARD) also has an ACRE calculator available online at www.card.iastate.edu/ag_risk_tools/acre. The University of Illinois's FAST FAST (Farm Analysis Solution Tools) also offers program comparisons and can be downloaded at www.farmdoc.uiuc.edu/fasttools.

The FSA also recently updated its ACRE information earlier this month. Find out more at www.fsa.usda.gov/FSA/webapp?area=home&subject=dccp&topic=landing.

The National Corn Growers Association also has a resource page at http://ncga.com/node/2473.