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Too Much Rain and 2012 ACRE Details

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It’s hard to believe that in less than a 10-day time period we can go from concerns over drought to excess rainfall, which is causing flooded fields in some areas. That is exactly what has happened dung the last few days of April and the first week of May in some parts of southern Minnesota. Much of the rain came as part of intense thunderstorms with heavy downpours that caused some flash flooding, and featured strong winds and large hail in some areas. The wind and hail did cause some isolated building and property damage in rural areas, but had very minimal impact on the newly planted crops.

Many locations across the region received 3-5 in. of rain, or more, from May 1 to 6, which has led to considerable standing water in many fields. This could result in drown-out damage in portions of some newly planted fields, which may require replanting. It will also delay corn and soybean planting for numerous days in fields that are not yet planted. The good news is that we are still fairly early in the planting season, which should allow the corn and soybeans to be planted with very minimal impact on optimum yield potential, assuming producers can get the fields planted by mid-May. Farm operators that have large enough areas of planted fields affected by drown-out damage should contact their crop insurance agent, if they have replant coverage as part of their 2012 crop insurance policies.

The large total amount of precipitation in early May has alleviated drought concerns for the time being in most of the region. However, the intensity of the rainfall events caused considerable runoff of the moisture, which may limit full impact for total recharge of stored soil moisture.

 

2012 ACRE Program Details

Producers that previously enrolled in the ACRE for the 2009, 2010 or 2011 crop year will be enrolled in ACRE for 2012, provided they sign up for the 2012 Farm Program at county FSA offices, and meet all other program criteria. Other producers can enroll in ACRE for 2012 when they sign up for the 2012 Farm Program, or at anytime until June 1, 2012. ACRE enrollment does require a signature from landlords on cash rental farm units, and results in a 20% reduction in direct payments for 2012. Farmers are encouraged to analyze situations and scenarios that are more favorable for ACRE enrollment for 2012, as compared to continuing with the traditional DCP farm program.

Farmers may sign-up for the 2012 Direct and Counter-Cyclical Program (DCP) at any time at their county FSA office, and wait until a later date, up until June 1, to decide on enrollment in the ACRE Program. Only about 8% of crop producers nationwide, and about 13% of the total eligible acres, were enrolled in ACRE for the 2009 crop year, with a few more farms and acres being added for the 2010 and 2011 crop years.

Even though the ACRE program did not pay out in 2009 and 2010 for corn and soybeans in Minnesota, and will likely not result in an ACRE payment for 2011, producers should not automatically write-off ACRE program enrollment for the 2012 crop year. The likely increase in the ACRE price guarantees for 2012, will lead to higher revenue guarantees for the 2012 ACRE program. This increases the likelihood of ACRE payments for the 2012 crop year for corn and soybeans, as compared to previous years. However, the limitation of the 10% increase in the revenue guarantee for corn severely inhibits the likelihood of an ACRE payment for corn from the 2012 crop year. Current 2012 new-crop corn prices for 2012 have been slightly above $5/bu. for corn, and above $13/bu. for soybeans. The 12-month national average prices (9-01-12 to 8-31-13) would have to be considerably lower than those price levels to earn an ACRE payment on 2012 corn and soybeans.

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