ACRE or DCP? Selecting Your Best Option - UNL CropWatch, April 19, 2013

ACRE or DCP? Selecting Your Best Option - UNL CropWatch, April 19, 2013

April 19, 2013

In early 2013 Congress passed a one-year extension to the 2008 farm bill that reauthorized existing farm programs through September 2013. That included extending authority for the current commodity supports known as the

  • Brad Lubben discusses the ACRE vs DCP decision with program host Jeff WIlkerson on the April 12 Market Journal.

  • Average Crop Revenue Election (ACRE) Program,
  • the Counter-Cyclical Payment (CCP) Program,
  • the Direct Payment (DP) Program, and
  • the Non-Recourse Marketing Assistance Loan (ML) Program.

The extension means producers  can reselect participation in either the ACRE or DCP (the Direct and Counter-Cyclical Program). 

In a recent Cornhusker Economics article, Brad Lubben, UNL extension policy analyst, writes that the decision for Nebraska producers in 2013, as it was in 2008, "is essentially the optimal tradeoff between a DCP program that provides very little price protection but full DPs, and an ACRE program that provided substantial revenue protection, but with DPs at 80% of the full rate. An examination of crop prices, crop revenue and ACRE and DCP protection helps explain the tradeoff."

Lubben and other UNL agricultural economists have developed information resources and a spreadsheet to help producers analyze these programs in light of current conditions and their own revenue projections. UNL research, which has been partially funded by the Nebraska Corn Board, shows that the selection of ACRE or DCP isn’t black or white and requires a closer look at support guarantees and yield and price projections.

The deadline for ACRE sign-up is June 3. DCP sign-up is later in the summer.

Resources

Lubben will be conducting a webinar on farm program analysis and selections for 2013 in the next few weeks. Watch CropWatch.unl.edu for the date.

Other decision aid tools include:

  • Farm Bill: Implementation, Education, and Analysis, a UNL website looking at 2008 and 2013 considerations. Includes ACRE Model for Nebraska Crops Excel Spreadsheet and User Guide, updated for 2013. This tool, developed by UNL Extension Educator Tim Lemmons, can help you analyze the ACRE versus DCP enrollment decision.
     
  • Cornhusker Economics: Revisiting ACRE for 2012 and 2013: Analysis and discussion of farm income support programs, expected payments for 2012, and potential support for 2013; by UNL Extension Policy Analyst Brad Lubben.