Corn+Soybean Digest

Acre Attractive To Midwest

The decision on whether to sign up for USDA's new ACRE program would appear to be a slam dunk for most producers in the heart of the Corn Belt, based on the revenue guarantees they are currently forecast to receive under the program.

Based on an average of 2007 prices and USDA's latest 2008 crop forecasts, ACRE participants should be assured an estimated $4.05/bu. for corn, $9.55 for soybeans and $6.59 for wheat. Payments are automatically triggered when both statewide revenues and individual farm returns fall below average. Ohio State University Agricultural Economist Carl Zulauf says that for corn, beans and wheat, the ACRE revenue coverage is estimated (in Ohio) to be at least 80% more than what would be received under the counter-cyclical program.

The tradeoff is a 20% reduction in direct payments and 30% reduction in loan rates that ACRE participants must accept. Also, ACRE's revenue is not fixed; if market revenue declines, so will ACRE payments.

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