Perhaps the most dramatic new offering that came out of the 2008 Farm Bill was the Average Crop Revenue Election (ACRE) Program.  The ACRE sign-up deadline of August 14^th for 2009 crops is coming fast.  At the very least, crop producers need to know what the ACRE program has to offer and how it differs from current crop commodity programs.  Its development was spawned by the popularity of revenue-based crop insurance programs.

     The basic premise of ACRE is that of revenue support versus the price support provided by the existing Direct and Counter-cyclical Payment (DCP) programs.  Electing to participate in ACRE will reduce direct payments by 20 percent, lower loan rates by 30 percent, and eliminate counter-cyclical payments.  Once a farm elects the ACRE option, it must continue in the program until 2012, the last year of the 2008 Farm Bill.

     Payments made to farmers enrolled in ACRE are based on two triggers being met.  First, the state's actual revenue must fall below the state's ACRE guarantee.  In addition, the farm's actual revenue must fall below the farm's ACRE guarantee.  Recently there have been some changes to the program that makes it much more attractive to Wisconsin farmers.

     State average yield is calculated by averaging the past five crop years after the high and low yield is eliminated.  For 2009, benchmark yields for Wisconsin are 138 bu/A for corn, 39 bu/A for soybeans, 61.9 bu/A for wheat, and 64 bu/A for oats.

Associated prices for these crops are determined from a two-year average national marketing year price.  The marketing year runs from September 1 of the harvest year to August 31 of the following year.  Although the current marketing year is not quite complete, we can estimate that ACRE prices used for 2009 will be close to $4.00 per bushel for corn and $10.00 per bushel for soybeans.  Figuring 90 percent of yield times price results in a 2009 revenue guarantee of around $500 per acre for corn and $350 per acre for soybeans.  The state ACRE revenue guarantee cannot change more than 10 percent from year to year.

Farm guarantee prices are the same as those of the state.  Farm yield is either derived from actual documented crop records such as those kept for insurance purposes, or where records are not initially available, a "plug" yield will be used.  Plug yields are equal to 95 percent of the five-year county average yield for a particular crop.  Over time, ACRE farms will report actual yield and plugs will be eliminated.  For farms harvesting corn silage, reasonable estimates of equivalent grain yields will be estimated.  The farm ACRE guarantee is the farm's benchmark yield times the two-year national average price, plus the crop insurance premium paid per acre by the farm.

If both the state and farm level triggers are met, then the farm is eligible for ACRE payments.  One advantage of the ACRE program is that farms enroll eligible crops according to their current planted acres for each crop, not according to the crops that established base acres.  However, ACRE payment acres cannot exceed the farm's total base acres for all crops.

Over the next two years the ACRE program looks to be a better alternative than the traditional DCP program because of high marketing year prices in 2007-08 relative to current prices.  On Tuesday, July 28^th the Fond du Lac County Farm Service Agency and UW-Extension will hold two ACRE informational sessions to help explain and demonstrate the details of the program.  Sessions will be held at 1 and 7 p.m. in Rm. 114 of the University Center on the UW-Fond du Lac campus.  Similar information will be presented at both times.