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Will low crop prices increase CRP acres?

The 49th enrollment period for the General Conservation Reserve Program (CRP) began on Dec. 1, 2015 and continues through Feb. 26, 2016 at local USDA Farm Service Agency (FSA) offices throughout the Country. The last General CRP sign-up period was in 2013. There appears to be more interest in the CRP enrollment in 2016, due to the current lower crop prices and reduced farm profitability. Currently, there are over 630,000 CRP contracts in place, on over 350,000 farms, with just over 23.4 million acres under some-type of CRP contract in the U.S.

The 23.4 million acres enrolled in the CRP program in November 2015, is down from nearly 27 million acres in 2013, approximately 31 million acres in 2009, and over 36.8 million in 2007. Currently, there are just shy of 17 million acres under General CRP contracts, 5 million acres under Continuous CRP contracts, 1.1 million acres under CREP contracts, and 380,000 acres in the Farmable Wetland program. The maximum number of CRP acres enrolled at any one time has been reduced in each of the last two Farm Bills, with the 2014 Farm Bill setting the maximum acres in the CRP program at 24 million acres. As of November 2015, there were a total of 54,476 CRP contracts in place in Minnesota, with a total of just over 1.1 million acres. Just over 530,000 acres are under a General CRP contract, and slightly over 582,000 acres were under a continuous CRP contract.

Enrollment periods for the General CRP only occur when USDA deems necessary to try to attract additional crop acres into the CRP, in order to maintain the desired CRP acreage. Sign-up for Continuous CRP is on-going, and is likely to continue that way for the foreseeable future. Continuous CRP targets the most sensitive environmental land areas, such as filter strips, buffer strips, wetlands, etc. The Conservation Reserve Enhancement Program (CREP) is a CRP partnership with state conservation programs, and target specific watersheds.

The average CRP land rental rate in the U.S. in 2015 was about $70 per acre, with an average of $51 per acre on General CRP acres, $114 per acre on Continuous CRP acres and $144 per acre on CREP acres. CRP rental rates vary widely from state-to-state, and within different regions of a given state. The current average CRP rental rate in Minnesota is $95 per acre, with an average of $70 per acre on General CRP acres, and $118 per acre on Continuous CRP acres. Most CRP annual land rental rates in southern Minnesota are considerably higher than the state average rate. Some other current average CRP rental rates for Midwestern states are Iowa at $181 per acre, South Dakota at $82 per acre, North Dakota at $45 per acre and Wisconsin at $111 per acre.

Both new cropland acres and current CRP acres that expire on Sept. 30, 2016 may be offered for enrollment into the General CRP program during the current sign-up period. Producers with existing CRP contracts that are expiring in 2016 will have no preferential status for keeping their land in the CRP program after this year, and must re-submit a new CRP bid to be re-enrolled in the CRP program. Any new cropland being offered for CRP must have been planted, or considered planted, to an agricultural commodity in four of the six crop years from 2008 to 2013. New CRP contracts for 2016 are for 10 or 15 years, and will be initiated on Oct. 1, 2016, with annual rental payments taking place in October each year. Landowners may also receive cost-share assistance up to 50 percent of the costs to establish approved cover crops and practices on CRP acres.

USDA adjusts the maximum annual CRP rental rates for Continuous CRP sign-up each year on a county-by-county basis, which are also used as the maximum CRP rates for General CRP enrollment period in a given year. The maximum rental rates are based on the relative productivity of the soils within each county, as well as on the average dry land cash rental rate for each county, based on the National Agriculture Statistics Service (NASS) annual land rental analysis. Landowners are provided the maximum allowable CRP rental rate; however, they may submit a lower rental bid if desired, in order to enhance the chances of their General CRP bid being accepted.

FSA will rank all bid offers for the General CRP enrollment on the basis of the Environmental Benefits Index (EBI) to determine which CRP bids are accepted. The EBI is used to target the most environmentally sensitive land with the CRP enrollment process. Factors included in the EBI calculation include benefits for water quality, wildlife habitat, soil erosion, and air quality, as well as accounting for benefits that will likely endure beyond the CRP contract period. The cost per acre for the CRP rental contract is also factored into the EBI for final determination of accepted CRP bids.

For more information on the current General CRP sign-up, or on Continuous CRP enrollment, land owners and producers should contact their local FSA Office, or go to the USDA CRP website.

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