The deadline to sign up for the Average Crop Revenue Election (ACRE) farm program for your 2011 crop is June 1. Experts from the University of Illinois say that if you haven’t already signed up for the program and aren’t considering it for June 1, you are missing out on “significantly better price protection” for your crop.
According to Dr. Gary Schnitkey, ACRE is similar to crop insurance. For $4 - $5 per acre that a farmer gives up on direct payments, he receives revenue protection offered by ACRE that is estimated to pay in one-third of the years for corn, 16% of the years for soybeans, and 26% of the years for wheat in Illinois.
Further, he writes, “While the chance is lower than average in 2011, ACRE still is worth considering. The $4.48 corn, $10.55 soybean, and $5.24 wheat benchmark prices are above historical levels and well above trigger prices contained in the counter-cyclical program. While the price and revenue outlook currently is positive, events could occur that cause 2011 to be poor revenue year. While not likely, prices could fall causing ACRE payments. A low yielding year could also result in ACRE payments.”
ACRE can be difficult to understand, which is probably the primary critique of the program. However, resources are available to help you learn more about this effective price guarantee option.
Read Dr. Schnitkey’s entire commentary on Why Every Farmer Should Consider ACRE and then learn more by accessing the following articles:
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