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Additional Perspectives on 45th CRP General Signup Results

09:16AM Jul 26, 2013

via a special arrangement with Informa Economics, Inc.

Heavy percentage of acres accepted were already in CRP

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Additional details are still awaited such as a state-by-state breakdown of acres to be enrolled in new Conservation Reserve Program (CRP) contracts Oct. 1 via the 45th general signup, but initial analysis of the activity shows some ongoing trends with the program.

CRP remains attractive: When crop prices rise, it typically spurs thoughts of acres exiting the CRP program to be brought back into row-crop production. However, recent general signup efforts have seen high percentages of land offered for new contracts coming from a pool of acres scheduled to exit the program.

Behind the data. Signup 45 results are that 81 percent of the 1.7 million acres accepted into the program – 1.377 million acres – were already under a CRP contract that was scheduled to expire Sept. 30, 2013. Contracts on a total of 3.302 million scheduled to expire Sept. 30.

2013 exits tempered: Results of signup 45 should mean that less than 2 million acres – 1.827 million – will be exiting the program as of Sept. 30, 2013.

Signup 43 (held in 2012) saw more than 85 percent of the 3.876 million acres accepted into the program – 3.316 million – were under a CRP contract that was to mature Sept. 30, 2012. That meant of the 6.531 million acres that were scheduled to exit the program, only 3.2 million did.

And with new contracts taken into consideration, the change in CRP enrollment from Sept. 30, 2012, to Oct. 1, 2012, was a net 2.5 million acres as there were 559,850 new acres were approved for enrollment in CRP during the 43rd signup.


Acreage well below cap: Acres enrolled in CRP are limited to 32 million via US farm law, but there are far fewer acres currently in the program. At the end of June, CRP acreage total stood at 26.929 million acres, of which 21.443 million were enrolled via general signup efforts and a total of 5.486 million acres were enrolled via various continuous CRP initiatives.

If there are no additional enrollments and all the acres approved for enrollment end up in CRP, that would take the CRP tally to 25.1 million acres as of Oct. 1, just above the level the Senate has in their farm bill and above the 24 million acre level in the House farm bill.

Continuous signup logjam: Acres also continue to come into the CRP via various continuous signup efforts. At the end of June, 57,824 acres have been enrolled in the program since continuous signup authority was restarted in May. But there are more continuous enrollments coming.

USDA noted in announcing Signup 45 results that 370,000 acres had been offered for enrollment into the CRP via the continuous signup. That would suggest another roughly 310,000 or more acres will end up entering CRP via the continuous signup beyond the just over 58,000 acres enrolled that way since the authority was restarted in May.

Perspective: Over the past four years, an average of just over 555,000 acres have been enrolled in CRP annually via the continuous signup. Since the continuous signup authority for CRP started only on May 13 for FY 2013, that would suggest somewhere less than the average should end up entering the program via the continuous signup. If all of the 370,000 acres offered for continuous enrollment would bring total CRP acres to around 25.6 million acres as of Oct. 1, 2013, again still well below the current limit of 32 million acres.

Comments: It appears there will be little trouble in meeting the expected legislative cap on CRP acres that is part of both the House and Senate farm bills. And given the recent trend of hefty re-enrollment of acres into the program, it would appear USDA would little trouble maintaining the program at whatever acreage limit Congress agrees upon as part of a new farm bill.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.