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Chances for 2010 ACRE Payments Are Rising

April 21, 2010
 
 
Iowa yields were so good last year that it is unlikely producers in the state will receive payments from the Average Crop Revenue Election, says Steven Johnson, farm & ag business management specialist at Iowa State University. "However, the drop in USDA's estimated cash prices from the January report to the April report slightly increases the potential for a payment on corn.”
 
The state's guarantee for corn is $635.61/acre; soybeans, $456.32. As of April 9, USDA forecast the national cash price at $3.60/bu. and $9.45/bu. Based on the final state yields of 182 bu. and 50.5 bu., the trigger price for corn is $3.49. "If the final national cash price falls to below that level, the state trigger would be met,” says Johnson. Iowa's trigger price for soybeans, on the other hand, is $9.04. Because USDA's price is a weighted average and few beans are left to sell after April, odds are against the price falling enough to trigger a payment, he explains.
 
 
In addition to the state calculation, the farm's revenue also must fall below its revenue guarantee, which is likely if the price falls below the trigger level. If triggered, ACRE payments are paid on 83.3% of the farm's planted acres.
 
 
 

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