No CRP Early-Out
USDA has announced that there will not be a penalty-free early-out option for the 2009 crop year on Conservation Reserve Program (CRP) contracts that are expiring in 2009 and beyond. USDA had been pressured to consider the early-out option for some CRP contracts to add more crop production acres for 2009 in order to address the very tight grain supplies in the U.S. and in the world. The CRP early-out option was strongly supported by some farm groups – especially livestock organizations – but was opposed by others. The proposal was strongly opposed by environmental and hunting organizations.

There are currently about 34.7 million acres in CRP nationwide, which is down from 36.7 million acres in 2007. The new farm bill sets a cap of 32 million acres in CRP, which is down from 39 million acres in the last farm bill, so there will be some loss of CRP acres in the coming years as the current CRP contracts expire. The following CRP acreage is set to expire in the next three years: 1.2 million acres in 2008, 3.9 million acres in 2009 and 4.5 million acres in 2010. Some of these acres could be returned to crop production the year following expiration.

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.