You have made your decision about crop insurance, and now your focus will turn to making a decision about participating in a farm program. With the extension of the 2008 Farm Bill, direct and countercyclical payments still exist, as does the ACRE program (Average Crop Revenue Election.)
The sign-up period for both began on February 19. Sign up for ACRE ends on June 3, and if you are still in the field at that time, it may creep up on you. Sign-up for the direct payment program must be made by August 2. While you are still in the machine shed putting the latest gizmo on your planter, give some thought to what you want to do with the farm program this year.
Any farm with an FSA number can enroll in the ACRE program, and you have probably been receiving direct payments since they were instituted in the 2002 Farm Bill. Deciding which to enroll in is not an easy decision and you have to evaluate your own farm in each of them. In fact, the decision will be more difficult than crop insurance. However there is help that you can consult for your decision. If you were enrolled in ACRE through a portion of the 2008-2012, you are not obligate to stay with it, and can revert to a direct payment program.
Iowa State University agricultural economist William Edwards provides an overview of the program and a link to an Excel program that helps with the decision making. He also provides an additional guide on the ACRE program.
Edwards says there are two gross revenue triggers for ACRE. Prices must meet both a state and a farm threshold, based on the average for the corn and soybean marketing year of September through August. The farm trigger will depend on your recent farm yields. While the 2012 drought may trigger an ACRE payment for your farm, the state trigger is the same for everyone, and federal farm program writers put a 10 percent limit on it’s up or down moves from year to year. The drought may not be enough to pull the state trigger on a payment.
Edwards says, “State level trigger revenues for Iowa for the 2013 crop are currently projected as $781/acre for corn and $574/acre for soybeans, using the current USDA forecasts for the 2012 average marketing year prices.
These could change slightly over the next seven months. This means that if the state average corn yield for 2013 is 160 bushels/acre, for example, the marketing year price for the 2013 crop will have to average less than $4.88/ bushel to trigger an ACRE payment. Likewise, if the state average soybean yield is 47 bushels/acre, for example, the 2013 marketing year price will have to average less than $12.21/bushel to trigger a payment.”