Farmers should consider potential benefits of ACRE program
WILLMAR -- Authorized by the 2008 farm bill, the Average Crop Revenue Election program is a new and innovative alternative to the traditional counter-cyclical payments provided under the Direct and Counter-cyclical Program. However, producers will need to carefully consider their options before deciding if the optional Average Crop Revenue Election program will provide them with better financial protection than what the Direct and Counter-cyclical Program currently affords.
Unlike the counter-cyclical payments under the Direct and Counter-cyclical Program, which are solely based on price, Average Crop Revenue Election program payments are revenue-based payments that take into account both the farm's actual production, and the national average market price of the commodity. Therefore, even if prices remain high, the Average Crop Revenue Election program could provide producers with added financial protection in the event of major crop losses from widespread weather disaster conditions, such as drought.
One aspect of the Average Crop Revenue Election program that seems to have tempered participation in the program was that the enrollment decision is irrevocable for the remainder of the 2008 farm bill, which continues through the 2012 crop year. Therefore, the decision to enroll this year would mean only a one-year commitment to the program.
Producers can elect the alternative revenue program on a farm-by-farm basis, which is defined as the farm number assigned by the local Farm Service Agency office.
By participating, producers agree to forgo counter-cyclical payments, accept a 20 percent reduction in direct payments and receive a 30 percent reduction in their commodity loan rates for all commodities produced on the farm.
To qualify for a payment, the actual crop-specific revenue for both the farm and the state must be less than the farm and state program guarantee for a crop.
While the revenue of a specific crop must be below the state and farm guarantee, the farm payment rate will be determined by the amount of revenue loss for the state.
To make an informed decision regarding participation in the Average Crop Revenue Election program, farmers and landowners need to know the benchmark yields and the price guarantees that will be used to determine if a state and farm qualifies for a payment.
The 2012 preliminary benchmark yields for Minnesota will be as follows: corn - 165; soybeans - 40; wheat - 52; barley - 59; and oats - 66.
Since the 2012 marketing year has not begun, the price guarantees being provided by USDA are only estimates using what data is available from the 2011 marketing year. As of March 9, the estimated price guarantees were as follows: corn - $6.20; soybeans - $12.00; wheat - $7.30; barley - $5.00; and oats - $3.45.
All Average Crop Revenue Election program payments are based on the planted and considered planted acres of eligible commodities, without regard to whether the farm has base acres for a specific crop. Commodities eligible for payments include wheat, corn, soybeans, oats, barley, grain sorghum and a number of minor oilseed crops.
Producers may elect and enroll into the Average Crop Revenue Election program for the 2012 crop year, even if they've already enrolled in the Direct and Counter-cyclical Program. However, the deadline to switch program enrollment is the overall sign-up deadline of June 1.
Grassland Reserve Program sign-up ends April 27
Private owners of grassland and pastureland, for which grazing is the predominant use, should note that applications for the Grassland Reserve Program are being accepted at USDA's Natural Resources Conservation Service offices through the sign-up deadline of April 27.
Initially authorized by the 1985 farm bill, the Grassland Reserve Program is a voluntary program designed to protect and enhance grassland and pastureland devoted to grazing purposes.
Participants voluntarily agree to enter into a permanent easement or a land rental agreement with USDA. In return, the landowner retains the right to conduct common grazing practices and operations related to the production of forage, as outlined and authorized in a grazing management plan.
Participants who prefer a 10-, 15- or 20-year rental contract will receive annual payments in an amount not more than 75 percent of the established grazing value.
With a permanent easement, compensation cannot exceed the fair market value of the land, minus the grazing value of the land encumbered by the easement. At the participant's request, easement payments may be provided in a lump sum or in annual payments of up to 10 years.
Certain grassland easements or rental contracts may be eligible for cost-share assistance of up to 50 percent of the cost to re-establish grassland functions and values where the land has been degraded or converted to other uses.
All applications received will be prioritized using an established ranking criteria that will consider the land's vulnerability to conversion for cropping purposes, invasive species, urban development, and other activities that threaten plant and animal diversity on grazing lands.
Minnesota hog inventory unchanged from one year ago
According to USDA's National Agricultural Statistics Service, Minnesota hog producers had an inventory of 7.6 million hogs and pigs on March 1. That number was unchanged from one year ago, but down 3 percent from the Dec. 1 quarterly inventory report.
Minnesota's breeding hog inventory totaled 550,000 head on March 1, down 2 percent from a year earlier. Market hogs and pigs totaled 7.05 million head, up marginally from a year ago.
Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.