Because ACRE enrollment results in a 20 percent reduction in all direct payments, a payment for a single small-acreage crop may not offset the reduction in direct payments. For most producers, one of the three major crops will need to earn a payment to justify the decision to enroll in ACRE.
Soybeans are a significant part of many producers' crop rotations in three of the four states, and there is a reasonably good chance of earning a soybean payment. At this time, corn is expected to earn an ACRE payment in Montana only.
However, with the late, cold spring in the northern Plains, the corn yields in Minnesota and the Dakotas could decline enough to put these states into play. An ACRE payment for corn in these states can, at best, be considered unlikely but possible at this time.
Wheat is very unlikely to generate an ACRE payment in any of the four states.
With a 2013 wheat price estimate of $7 from the USDA, average yields would have to decline by about 20 percent from the state benchmark yield in all four states before an ACRE payment would begin to accrue.
As of mid-April, the bottom line is to consider enrolling any FSA farm in the ACRE program that you intend to plant to at least 10 percent to soybeans. It is more of a longshot if you are growing mostly corn without acres of soybeans on that unit. If most of the acreage on a farm unit is planted to wheat, the best advice is to stay with the DCP program.
Remember that enrollment is by Farm Service Agency farm unit. Most producers have more than one farm unit, so some units may be enrolled in ACRE and some in DCP. It depends on what crops will be planted this year.
It should be noted that a crop must show a revenue shortfall at the farm level to be eligible for the ACRE payment triggered at the state level. The payment to an individual farm is adjusted to reflect the relationship between the state benchmark yield and the farm benchmark yield. The maximum acres eligible for ACRE payments may not exceed the total base acres on any farm unit.
More detailed tables showing the calculations for projected ACRE payments are available on the NDSU Extension Service farm management website at http://www.ag.ndsu.edu/farmmanagement/tools.
Source: Dwight Aakre, Farm Management Specialist, NDSU Agribusiness and Applied Economics Department