Understanding ACRE: Its Revenue Guarantee

This paper continues the discussion of the new ACRE farm program.  Specific to this paper is a discussion of the revenue guarantee associated with ACRE.  The paper is available here:

http://aede.osu.edu/resources/docs/pdf/5RRJ4KAX-12OH-NKFA-5YGY8JAJ56VOM7NG.pdf

This paper is on of five papers on the ACRE program.  The other papers address ACRE’s (1) 2008 Farm Bill Provisions, (2) policy foundation, (3) breakeven price, and (4) relationship with crop insurance and SURE.  The papers are at http://aede.osu.edu/resources/docs/display.php?cat=21

ACRE Calculator Available

Bruce Babcock, Director of the Center for Agricultural and Rural Development, and his colleagues at Iowa State University have developed a calculator to determine ACRE payments.  This calculator will allow corn, soybean, and wheat farmers for all states to try to find a combination of 2008 and 2009 season average prices whereby the traditional farm programs generate more payments than ACRE.  According to Babcock:  “The only scenario we could find is when 2008 prices are high and then 2009 prices are equal to or greater than the average price over 2007 and 2008. Otherwise ACRE dominates. In addition, a farmer should find that ACRE dominates even in this situation because the value of the 2010 ACRE put option is much greater than 20% of direct payments.”

The calculators are offered as spreadsheets in Microsoft Excel. You must have Microsoft Excel installed on your computer to open and use these calculators. In addition, if you are using a dial-up connection to the Internet, you may find the downloading process a bit slow because of the size of the files.

The calculators are available at: http://www.card.iastate.edu/ag_risk_tools/acre/

Carl Zulauf notes that the above calculator makes the calculation only for 2009, but that anyone who signs up for ACRE in 2009 is making a commitment for all eligible crop through the 2012 crop years.  There will be other calculators for producers to use that will be available in the near future, and they will be posted on Ohio Ag Manager.

New Edition of Law Notes Available

The summer 2008 version of Law Notes is now available.  Law Notes is a newsletter of OSU’s Agricultural & Resource Law Program. Topics in this newsletter include:

  • Ohio Line Fence Law will Change on September 30, 2008
  • OSU to Host Ohio Agricultural Law Symposium
  • Controversial Livestock Zoning Case Decided
  • Ohio Water Issues: the Great Lakes Compact and a Proposed Constitutional Amendment
  • What Should Agricultural Employers Know about Employment Laws?
  • Legal Q&A on open burning, trees on the property line, dying without a will, watershed conservancy districts

The newsletter is available here: http://aede.osu.edu/programs/aglaw/newsletter.htm

Purdue Ag Economists Analyze High Commodity and Food Prices

In a Farm Foundation commissioned report released on Wednesday (July 23), the Purdue economists – Phil Abbott, Chris Hurt and Wally Tyner – highlight key factors gleaned from examining 25 recent studies plus their own analysis. Their conclusion: a complex combination of factors is fueling agricultural commodity price increases and rising food costs.

Tyner, an expert on energy and policy issues, said the price of oil is an important factor that has increased the demand for biofuels. “About $3 of the corn price increase is due to the higher oil price and $1 to the ethanol subsidy,” he said.

The economists also said decreased investment in agricultural research has led to lower production growth, which has reduced stocks and set the stage for commodity price increases. “When we had crop surpluses in the 1980s and 1990s, research on crop productivity started to wane. It will take some time for new investments to bear fruit,” Hurt said.

The full article is available here: http://news.uns.purdue.edu/x/2008b/080723TynerDrivers.html

National Agricultural Biotechnology Conference

Agriculture is undergoing a major positive and challenging transformation as it continues to provide food and feed while expanding its role as a major provider of fuels and chemicals. In June, 2008, the 20th Annual National Agricultural Biotechnology Conference was held in Columbus, Ohio to address the transformation that agriculture is undergoing.

The National Agricultural Biotechnology Council has been hosting annual public meetings about the safe, ethical, and efficacious development of agricultural biotechnology products since its formation by the Boyce Thompson Institute in collaboration with Cornell University, Iowa State University, and the University of California-Davis in 1988. Today the organization, a not-for-profit consortium of 34 leading agricultural research and teaching governmental agencies / institutions / universities in the U.S. and Canada, continues to provide all stakeholders the opportunity to speak, to listen, and to learn about the issues surrounding agricultural biotechnology.

Keynote speakers from this year’s conference represent agriculture, industry and the environment conveyed their perspectives on these megatrends. Ethicists and policy experts gave guidance as to how to maximize benefits and minimize challenges. Attendees had an opportunity in breakout sessions to provide their input and guidance on these issues.  Many of the presentations are available online:

http://www.oardc.ohio-state.edu/nabc20/pageview1.asp?id=516