ACRE program mulledAs the ACRE program signup deadline approaches, NDSU economists say the program may benefit more growers this year, over the DCP program.
By: Mikkel Pates, Agweek
Some soybean and corn farmers in the region may take a second look at enrolling in the federal Average Crop Revenue Election program in 2013, according to North Dakota State University agricultural economists.
ACRE was instituted as part of the 2008 farm bill, which now has been extended into 2013, as a new multi-year farm bill is being debated. Farmers still have the option of enrolling in either ACRE or the Direct and Counter-cyclical Payment program through the June 3 enrollment deadline.
Farms must show a revenue shortfall for a crop at both the farm unit level and the state level to be eligible for an ACRE payment. Enrolling in 2013 only commits the farmer to one year in the program, as the farm law extension only goes one year.
As in the past, enrolling in ACRE reduces direct payments in all crops by 20 percent. This reduction applies on a farm unit basis. Also, marketing loan rates for that farm unit are lowered by 30 percent, but loan rates currently are low enough that this is not much of a consideration. ACRE payments are earned on the acres planted or “considered planted” for each crop.
Here are general analyses from NDSU economists Dwight Aakre and Andy Swenson:
•Soybeans — State projections show an ACRE payment in three regional states: North Dakota, $34 per acre; South Dakota, $49 per acre; and Minnesota, $51 per acre. Any 2013 payment would be based on national average prices and state actual yields calculated Aug. 31, 2014.
Swenson says farmers give up 20 percent of the direct payment, which generally amounts to $1.50 an acre in western North Dakota and $3 per acre in the east. Some farmers might consider that a reasonable insurance payment to protect from a revenue collapse.
“At current price and yield projections, ACRE may be the best option in 2013 if more than 10 or 20 percent of your total farm is in soybeans,” Swenson says.
A farmer has the option to elect ACRE on any of his or her separate Farm Service Agency farm serial numbers within a total operation. It’s possible that some of these FSA farms might be heavier with soybeans in 2013, which makes it more likely to be a profitable risk decision on that farm.
• Corn — Montana is projected for a $28-per-acre payment. Yield level would have to decline from benchmark yield levels by eight bushels in North Dakota, nine bushels in Minnesota and 15 bushels in South Dakota to make farmers eligible for a payment. With a late, cold spring, yields in Minnesota and the Dakotas could decline enough to trigger a payment, although Aakre says that appears unlikely.
• Wheat — This is least likely to earn an ACRE payment in 2013. At U.S. Department of Agriculture’s current price projection, statewide wheat yields would have to decline about nine bushels in North Dakota, 12 bushels in Minnesota and eight bushels in South Dakota and Montana to trigger a payment.
In a dominant wheat farm, operators may prefer to stay in the DCP program, Swenson says. Enrollment is by FSA farm unit.
Also, for minor crops, payment projections are:
• Lentils — North Dakota $38; South Dakota and Minnesota, $28.
• Chickpeas — North Dakota and South Dakota, $23 per acre; Montana $7 per acre.
• Flax — $2 an acre North Dakota; $13 an acre Minnesota.
For detailed calculations for ACRE, visit www.ag.ndsu.edu/farmmanagement/tools.