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ACRE not favored

This on Twitter from Chris Hurt at Purdue. What do others think?


"Right now the futures markets for new-crop corn and soybeans do not favor ACRE if we assume near-normal yields." - @PurdueAgEcon Chris Hurt



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4 Replies
daniel looker
Frequent Contributor

Re: ACRE not favored

I wouldn't disagree. Since Chris and I talked about this in late April, corn prices have been trending up, which would lessen the odds of payout if current futures prices really are an indication of average 2010 cash prices starting after harvest. Still, I talked to a farm manager in Iowa yesterday who said his company enrolled all of their farms in ACRE last year. They think it's better risk protection than the DCP program.

Veteran Contributor

Re: ACRE not favored

What does a producer want? Revenue enhancement (the old DCP) or revenue protection (ACRE)? I would prefer to garner my revenue from the open market and have a chance to protect it through the FSA. It is almost a given that direct payments will be going away and some form of ACRE will take it's place. Producers had better bone up now on the program. Bruce Babcock's vision already has picked up steam behind the scenes.

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Senior Contributor

Re: ACRE not favored

In Iowa, zipo is predicted to be paid. So, if you signed up last year for ACRE, you gave up 20% of DCP and loan for the next 5 years for nothing. BUT, there is always next year. After all, the expenses never go down, and you can't opt out and go beck to the old guaranteed program for 5 years.. 5 years go fast though.


To answer your question, most farmers don't want to go backward


Re: ACRE not favored

For wheat producers on the High Plains, ACRE has not shown to be beneficial when their primary revenue stream is from wheat.  There have been exceptions on the eastern side of the wheat belt, however, this pronouncement simply confirms what we already knew was a reality for wheat growers.  Generally, ACRE was written to favor row crops under most circumstances.  But circumstances, as Chris mentions, can change.  I suppose one can hope for more permanence in a continuing uptrend in futures prices and it wouldn't matter. 

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