Can I Opt Out Of ACRE For 2011?

Can I Opt Out Of ACRE For 2011?

Once you sign a farm up for ACRE, it's enrolled for the duration of the Farm Bill--through 2012. But you must elect the ACRE option at the FSA office each year to be eligible for an ACRE payment that may be made that year.

FAQ: I signed one of my farms up for USDA's Average Crop Revenue Election or ACRE program in 2010, but I'm not enrolling it in ACRE this year. I'm just going to put it in the Direct and Counter-cyclical or DCP program and not elect the ACRE option for 2011. Corn and soybean market prices are so high there likely won't be an ACRE payment anyway. So why bother to elect the farm into ACRE this year? What do I have to lose by not electing ACRE in 2011?

Answer: Provided by Steve Johnson, Iowa State University Extension farm management specialist in central Iowa.

The deadline to sign up for the 2011 USDA farm program at your county FSA office is June 1. That's the deadline whether you are in the DCP program only, or if you are in the DCP and also elect to enroll in the ACRE option.

The likelihood of collecting an ACRE payment on the 2011 crop isn't very high for either corn or soybeans, so some farmers figure it isn't worth it to go to the FSA office and elect to participate in ACRE this year. If you are already enrolled in ACRE from a previous year, you've already given up 20% of the direct payment each year due to the fact you're already signed up for ACRE through 2012.

Since ACRE is an irrevocable contract, the farm previously enrolled in ACRE remains in ACRE through the 2012 crop year. The farmer simply signs up for the DCP program on all farms and the ACRE farms will have the 20% of the direct payment withheld for 2011.

Note: The 2011 ACRE enrollment decision would be only for farms (by FSA farm number) not previously enrolled in ACRE.

If the farm is already in ACRE, why would you not want to sign up the farm for 2011? You're already enrolled in ACRE for 2011 and 2012 and the cost (20% of your direct payment) would be approximately $5 per acre each of those 2 years. The program is set to expire after the 2012 crop year. Once ACRE farms are enrolled, no additional decision is needed.

Question: Another farm hasn't been enrolled in ACRE previously. Should I enroll it in 2011? It has been in the Direct and Counter-cyclical Payment (DCP) program every year, but not in the Average Crop Revenue Election (ACRE) option.

Answer: In Iowa, nearly 83% of all farms (by base acres) are not enrolled in ACRE. They are in the traditional farm program (DCP) but they are not enrolled in the ACRE option. So, if you are one of these farmers, should you enroll any additional farms in ACRE for 2011?

If you think that the national average crop prices for the 2011-2012 marketing year will plunge below 3.81/bu. for corn and $9.49/bu. for soybeans, you might want to enroll in ACRE. Since these prices are much lower than those being forecast by USDA, I doubt that ACRE payments for 2011 will be triggered, especially for a state like Iowa. Put simply, the Iowa average yield would have to be pretty low to trigger a 2011 ACRE payment, at the same time the national average cash price would move significantly lower.

I see little incentive to enroll additional farms in ACRE before the June 1, 2011 deadline because the likelihood of triggering an ACRE payment in 2011 is much lower than it was in the past two years.

For more ACRE analysis go to ISU's Ag Decision Maker site www.extension.iastate.edu/agdm/crops/html/a1-33.html and ISU farm management specialist Steve Johnson's site www.extension.iastate.edu/polk/farmmanagement.htm .

If you have specific questions or need details regarding USDA farm programs, contact your local USDA Farm Service Agency office. You can also get news and information about DCP, ACRE and other USDA programs at www.fsa.usda.gov.

Two Iowa State University Extension Web sites have farm program information and analysis. They are ISU's Ag Decision Maker site at www.extension.iastate.edu/agdm and ISU Extension Specialist Steve Johnson's site at www.extension.iastate.edu/polk/farmmanagement.htm.

And be sure to read the regular column "Frequently Asked Questions about the Farm Program" that appears in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com

 

TAGS: Soybean USDA
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