Todd King, C.P.A.

Summer 2009

August 14th is the final day to elect to participate and enroll in the Average Crop Revenue Election (ACRE) program.  Like most new farm programs it is full of unanswered questions.  To further complicate issues, FSA has provided a deadline for signup that will be smack dab in the middle of harvest for many producers.  Couple these things with a farmer that has a natural reluctance for change and we have the perfect recipe to procrastinate until it is too late to glean any benefit out of the program. 

It is my opinion that every farmer should sit down and do the homework before making the decision to elect into or opt out of the program.  This program, like most other farm programs will likely provide some large benefits to some farmers.  Every producer’s circumstances are different and accordingly, the potential benefit of the program should be looked at in light of the particulars of the specific operation.  The ACRE program is a revenue protection program which can be thought of as insurance.  Like most insurance products we buy, we do not know as to whether we will ever collect on them until well after they are purchased.  Even after doing proper analysis, there will likely be no absolute assurance, that a proper choice was made. 

The election to participate in the ACRE program can be made in any of the crop years 2009 through 2012.  Because the program is a revenue based program and the wheat industry has recently come off of some historic high prices, the prospects for a 2009 benefit under the ACRE program appear to exceed that of the other three remaining years.  Again, this would point toward getting your homework done before the August 14th deadline. 

The purpose of this article was not to explain the particular details of this program.  The thought was to underscore the importance of analyzing the potential benefit that this program may have for your operation.  We have no control of the program details or deadlines established by FSA.  As farm managers, we have a responsibility to see what makes sense given our specific farm characteristics.

There are many resources available to help producers in analyzing the program.  The local FSA office will have information.  Washington State University’s cooperative extension and in particular, Tom Platt, has done considerable work and is a very good resource.  Several different program calculators are also available on the internet.  In addition to these things, Leffel, Otis & Warwick, P.S. will be doing a couple seminars to help educate producers.  These seminars will be advertised in your local paper.  If you have questions regarding these seminars, please feel free to call your local Leffel, Otis & Warwick office for details.