The 2013 ACRE Payment Estimator is a FAST Excel spreadsheet that provides an evaluation of payments from the Average Crop Revenue Election (ACRE) program for the 2013 marketing year. This program provides state and crop specific estimates of price and yields under which ACRE will make payments. It also estimates the percent of time ACRE will pay and estimates the expected payments from ACRE. The Excel spreadsheet can be downloaded here.
The ACRE Election
More detail on the ACRE election is provided here and here. In essence, farmers and landowners have until June 3, 2013 to enroll Farm Service Agency (FSA) farms into ACRE. Previous ACRE elections do not matter. Farm Service Agency (FSA) farms in the 2012 ACRE program can either be or not be enrolled in the 2013 program. Similarly, FSA farms not enrolled in the 2012 ACRE can either be or not be enrolled in the 2013 ACRE program.
Enrolling a FSA farm in ACRE will:
- Reduce direct payments by 20%. Whether in or out of ACRE, the 2013 direct payment will be reduced from 2012 levels due to Federal budget sequestration. This reduction is scheduled to be 8.5%. If a farm had a $25 direct payment in 2012, the direct payment in 2013 given that the farm is not enrolled in ACRE will be $22.88 ($25 direct payment x (1 - .085 reduction)). Enrolling in ACRE will further reduce the direct payment by $4.58 ($22.88 x .20 reduction). Most Illinois farms will have direct payments reduced by $3.50 to $5.00 per acre by enrolling in ACRE.
- Reduce loan rates by 30%. Loan deficiency payments are unlikely as market prices are well above loan rates. National loan rates are $1.95 for corn, $5.00 for soybeans, and $2.94 for wheat. Reducing these loan rates by a further 30% make LDP and marketing loans very unlikely. However, the 30% reduction may be important to those farmers who take out marketing loans on stored grain, as loans will be reduced by 30% when an FSA farm is enrolled in ACRE.
- Replace the counter-cyclical program with the ACRE program. The counter-cyclical program makes payments when market year average prices are bellow "trigger" prices. Trigger price are $2.35 for corn, $5.56 for soybeans, and $3.65 for wheat. MYA prices are not likely to be below these prices.
In most case the tradeoff between enrolling in the ACRE program is giving up $3.50 to $5.00 per acre of direct payments for the chance of ACRE payments in cases of low state revenues.
2013 State ACRE Payment Estimator by Crop