ACRE option available to area producers

As of April 27, 2009, farm producers are eligible for enrollment into the new Average Crop Revenue Election (ACRE) option made available by the new farm bill.

The enrollment deadline is August 14, 2009. This is a new option made available by last year's farm bill intended to offer farm program payments to producers when the revenue for a program crop is lower than the program guarantee instead of simply offering a guaranteed payment amount each year..

Additional program payments, then, are "triggered" by lower revenue both at the state level as well as the farm level. To "trigger" a payment, the state actual revenue must be less than the state ACRE guarantee; and the farm level actual revenue must be lower than the farm ACRE guarantee. Both must "trigger" in order for ACRE payments to be available.

This option is an alternative to the more familiar Direct and Counter-cyclical Program (DCP) that has been available for the past several years and remains an option this year as well.

Enrollment in ACRE will involve: 1) a 20 percent reduction in guaranteed payment amounts, 2) a 30 percent reduction in commodity loan rates, and 3) foregoing the counter-cyclical payments offered under the DCP.

Producers have the option to enroll in ACRE on a farm by farm basis, electing to participate on some farms and not others. However, all producers on a farm (all tenants and landlords) must agree to participate on farms being enrolled in order for the ACRE benefits to apply. Eligible crops include wheat, corn, grain sorghum, soybeans, oats, barley, upland cotton, and some others not common to our area.

One of the changes in ACRE calculations is that actual planted acres are used for computing payments instead of the traditional established crop bases. Farm trigger/ payment yields are set using a percentage of statistical records, or can be set using an Olympic average of actual farm production from 2004 through 2008 (drop the high and the low and average the remaining three).

Direct payments for DCP are made as before -- an option of 22 percent in advance, then the balance of the payment in October. The reduced direct payment part of the ACRE payment comes within the same time frame. Any additional payment, however, will come only after the marketing year for a crop has passed so the revenue figures can be calculated. That means, for example, that the balance of this year's ACRE payment (if applicable) will be made in October, 2010.

To establish payment yields, producers can bring in production for the years 2004-2008, or certify production now for those years subject to later spot check. Then, production will need to be turned in by farm each year to maintain the payment yields as well as to determine the farm trigger levels.

The state and farm guarantees are based on the yields as established by NASS or producer provided information along with the average commodity prices for the past two years. For 2009, the yield levels for Kansas are 96 bushels per acre for corn, 35 bushels for soybeans, and 35.3 bushels for wheat. The average commodity prices for the past 2 years (the guarantee price) are $4.15 per bushel for corn, $9.73 for soybeans, and $6.64 for wheat.

Only current base farms with covered commodities planted will qualify. All-grass farms with bases (a significant number in this area) will not benefit from ACRE, but can enroll in and benefit from the DCP as in past years.

The ACRE program by nature gives rise to many questions. FSA office staff will be working to provide relevant information concerning this program, but due to the many variables involved in program projections, will not always be able to definitively answer all thequestions that might be offered. Producers have the responsibility to make a choice concerning ACRE, so our office staff will provide as much applicable information as possible.

There are several resources offering information about this program --some from USDA and some from sources like the Extension Services. There are also some related program calculators from some of the universities. Contact our office if you are interested in hard copy information or website addresses.

Editor's Note: Doug Niemeir is the County Executive Director for the USDA/Farm Service Agency. He can be contacted by emailing him at Douglas.Niemeir@ks.usda.gov.