Farm Bill Extension Means Decisions for Farmers

By: Chris Bruynis, Assistant Professor & Extension Educator

In 2008 when farmers were first provided the choice between the Direct and Counter-Cyclical Payment Program (DCP) and the Average Crop Revenue Election Program (ACRE) questions arose about what would happen if the 2008 Farm Bill was extended. Since the original rules required farmers that elected ACRE to remain in that program until the Farm Bill expired the question surfaced again when The American Taxpayer Relief Act of 2012 extended the authorization of the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill).

USDA’s Farm Services Agency recently released the following information:

The 2013 DCP and ACRE program provisions are unchanged from 2012, except that all eligible participants in 2013 may choose to enroll in either DCP or ACRE for the 2013 crop year. This means that eligible producers who were enrolled in ACRE in 2012 may elect to enroll in DCP in 2013 or may re-enroll in ACRE in 2013 (and vice versa).

FSA will begin sign-ups for DCP and ACRE for the 2013 crops on Feb. 19, 2013. The DCP sign-up period will end on Aug. 2, 2013; the ACRE sign-up period will end on June 3, 2013.

Farmers may want to delay making the decision to elect a farm program until later in the spring once planting intentions (and possible planting progress) are known.  Projected harvest prices will reflect the planting intentions resulting in a better estimate of crop revenue.  Having a good crop revenue estimate for Ohio and each farm will allow farmers to make a better decision of the potential benefits of enrolling in ACRE.

Based on 2011 and estimate 2012 prices and the cap and cup rules in the ACRE program, the estimates revenue guarantees for 2013 are expected to be $688 (corn), $534 (soybeans), and $393 (wheat). Using average yields for these crops (157 corn, 47.5 beans, and 63 wheat) the corresponding average market year price that crops would need to be below for an ACRE payment to trigger would be $4.38 corn, $11.24 soybeans, and $6.24 wheat.  The average market year price is determined from harvest 2013 until harvest 2014 for the respecting crops.

Farmers need to pay attention to the markets and the projections and decide if ACRE is a viable risk reduction strategy to purchase (via reduced direct payments) in 2013. Farmers with questions concerning ACRE can contact Chris Bruynis at bruynis.1@osu.edu.

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