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Corn+Soybean Digest

New Calculator Helps Growers See Benefit of ACRE Program

The National Corn Growers Association and several of its state affiliates have prepared a computer program that performs detailed benefit analysis of producer operations under traditional farm programs vs. the new optional Average Crop Revenue Election (ACRE) program. NCGA and its state-level allies worked hard for ACRE to become part of the 2008 Farm Bill.

“We’re excited about providing this tool to our growers because we believe it has great value in helping them see how the benefits the ACRE program can provide them,” says Ron Litterer, NCGA chairman, who was a principal proponent of the program while serving as president of the association last year. “We will continue our efforts to ensure the program is implemented in as fair a way as possible for growers.”

Because the USDA has not finished its final rule-making procedures, some of the assumptions in the program could change. For example, NCGA and its allies believe the 2009 crop state revenue guarantees should be based on the season average prices for 2007 and 2008 commodities, as stated in the law and is more contemporaneous with actual market conditions. At present, USDA is considering averaging prices from 2006 and 2007.

“This is especially important as two things have occurred in recent months,” Litterer says. “Corn prices have decreased significantly since earlier this year and the cost of farming has not followed suit. In many places, we’re looking at a breakeven price of $4/bu. while prices for December corn are falling below that.”

Litterer says the NCGA continues to urge its members to contact their members of Congress to ask them to press the secretary of agriculture to support the use of the two most recent marketing years when it comes to establishing state revenue guarantees for the 2009 crop.

Growers are urged to contact their state associations for more information about the farm bill calculator. The software will be updated by the University of Illinois as changes occur.

The calculator project was sponsored by Maryland Grain Producers, the Virginia Grain Producers Association and the Ohio, Iowa, Illinois, Indiana Corn Growers Associations. Academic contributors include Professor Gary Schnitkey, University of Illinois; Professor Art Barnaby, Kansas State University; Professor Keith Coble, Mississippi State University; and Professor Carl Zulauf, Ohio State University.
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