December 23, 2008

Growers pleased with decision on ACRE

Beginning this spring, farmers can sign up for the Average Crop Revenue Election (ACRE) program - a program that was urged by corn growers to be included in the 2008 farm bill.

ACRE provides a new, optional risk management tool for farmers. It delivers payments to producers facing losses in crop revenue caused by adverse weather conditions and declining prices. In return, program participants accept a reduction in Loan Deficiency Program rates and a decrease of 20 percent in direct payments.

The U.S. Department of Agriculture announced some of the details about the ACRE program late last week - and corn grower organizations are generally supportive of the decisions USDA made.

A key decision was that USDA will use market prices for 2007 and 2008 as the average price for the 2009 crop. There was some discussion that the average price would be based off 2006 and 2007. The average price in 2006 (at $3.04) is currently below what is expected for 2008 (a USDA estimated range of $3.65-4.35). The average price in 2007 was $4.20.

Corn growers believed the 2006 price would be too low based on current crop prices and trends and that it made more sense to base ACRE off the most current crop years. USDA agreed.

For more information, check out USDA’s announcement or this article by Dan Looker of Successful Farming.

National Corn Growers Association president Bob Dickey said NCGA was pleased with the announcement. "This is a very important piece of the 2008 farm bill to NCGA members, especially during a time of uncertainty and volatile commodity markets," he said. Dickey, of Laurel, Nebraska, is also a member of the Nebraska Corn Board.

"Since enactment of the legislation, NCGA has worked closely with USDA on the 2008 farm bill," he said. "On behalf of our nation's corn growers, I would like to extend our gratitude to Secretary Schafer and the employees at USDA for their thorough consideration of our members' views and concerns regarding ACRE. We are pleased with the outcome of the ACRE program and look forward to the implementation of the other farm bill programs."

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