Both state, farm triggers must be met for ACRE payment
The Adjusted Crop Revenue Election option of the 2008 farm bill provides minimum revenue guarantees to producers who qualify, but only in states that meet the program requirement, said University of Nebraska-Lincoln Extension Educator Robert Tigner.
Producers must sign up for ACRE by Aug. 14, if they wish to take advantage of the program this year, said Tigner, educator in the Southwest Four, Chase, Dundy, Hayes and Hitchcock counties.
Payments under the program are made when revenue drops below a guaranteed floor.
Reduced yield and reduced prices are the two factors that impact payments, said Tigner. Payments to individual producers are also impacted by a state's revenue calculation. If the state does not qualify under ACRE, an individual producer receives no payments, even though he or she would otherwise qualify.
Two factors that affect prices are ethanol and oil prices. A rapid rise in both of those prices will probably trigger a rise in corn prices as well. The price of oil depends upon the U.S. and the world economy. If the economy grows or if the current recession bottoms out, oil and ethanol prices will probably strengthen, as has occurred recently. The price of corn will probably follow. The strengthening of those prices will yield a lower probability of an ACRE payment than if the opposite occurred.
Factors that enter into calculations for ACRE include the reported National Agricultural Statistics Service price times 90 percent, times the marketing year average price for a specific crop. A state might hit revenue triggers on one or multiple crops but there may be years when the state, or an individual producer hits a trigger price on soybeans and not on the other cover crops, or it may be wheat in some years, or it may be multiple crops.
The other factor that impacts ACRE eligibility is yield variability. Great yield variability is likely to trigger a state ACRE trigger. The larger the state and the more practices that mediate yield variability, such as irrigation, the less likely a state trigger is going to be hit.
Nebraska is a large state and it has different climatic regions, but much of it is in corn production. On the other hand, 25 percent of Nebraska's corn is dryland. Under ACRE, non-irrigated and irrigated corn are considered separately, so there may be years when irrigated corn doesn't vary enough to trigger ACRE eligibility, but dryland does. In that instance the dryland producers may receive a payment, when the irrigators don't.