The Enid News and Eagle, Enid, OK

March 9, 2013

Producers face various crop decisions

By Rodney Jones, Extended Forecast
Enid News and Eagle

ENID, Okla. — By Rodney Jones

Recent moisture and improved forecasts have renewed optimism for many agricultural producers in northwest Oklahoma.

As plans are made for the many spring tasks that need to be accomplished, don’t forget about some important deadlines and farm program signup opportunities.

First, the deadline for signing up for a spring crop insurance policy (grain sorghum, corn, soybeans, etc.), or for making changes to an existing policy is March 15. Changes producers might be considering include changes to coverage levels or unit designations (optional units vs. enterprise units). If you are considering planting a spring crop, do not let this deadline slip past. Remember, you can sign up for a spring crop policy and if you decide not to plant that particular crop, you will not owe any premium.

I would encourage producers to consider the revenue coverage-type policies for spring-planted crops given the high level of the planting time price guarantees and the likelihood that prices could decline significantly by fall harvest time.

Second, enrollment is open for the 2013 farm program. Regardless of which option you were enrolled in for the previous four years, producers have the option of choosing either the Direct and Counter-Cyclical Program (DCP) or the Average Crop Revenue Election (ACRE) program for the 2013 crop year. The deadline to choose the ACRE option is June 3, and the deadline for DCP is Aug. 2.

I have been getting a lot of questions regarding the choice for the 2013 crop year. Remember, producers who choose ACRE give up 20 percent of the direct payment in return for the chance of an ACRE payment. ACRE payments are triggered for a particular crop when two things occur. First, the state-level calculated revenue for 2013 (average state yield times the marketing year average price) must be below the previous five-year Olympic average. There is of course no guarantee; however, even with the recent moisture and improved crop prospects, I suspect this trigger will be tripped for wheat in Oklahoma in 2013, given the large number of acres with poorly developed stands.

Second, your farm-level calculated revenue for 2013 (your actual 2013 yield times the marketing year average price) must be below your calculated previous five-year Olympic average. Again, there are no guarantees; however, producers with below-average looking wheat have a good chance of triggering an ACRE payment for the 2013 wheat crop, while producers with good-looking wheat may not trigger an ACRE payment.

I would suggest making the decision based on your assessment of your wheat crop prospects. The deadline (for the ACRE option) will be long gone before local producers can make an informed evaluation of the potential for triggering an ACRE payment of the spring planted crops, so make the decision based on an evaluation of your wheat crop prospects.

Keep in mind, when producers signed up for ACRE in 2009, they had to give up 20 percent of the direct payment for the remaining life of the farm bill (four more years at that time). Even though it seemed quite expensive at the time, it turned out to be a good choice for many local producers. For 2013, producers who choose ACRE will only give up 20 percent of the direct payment for one year, so it is a much less expensive gamble if you want to think of it that way.

I would encourage local producers to make an appointment and sign up as soon as you are comfortable making the decision (it is possible to sign up for DCP and then switch to ACRE before the June 3 deadline; however, it does take extra time and effort for everyone involved).

FSA offices have indicated they have the time here in March to accommodate signups, and it is important to send a message to Washington, D.C., that these programs are important and are of interest to producers.

Any updated information will be posted to the OSUFarm Management Facebook page as soon as it is available.

Jones is Oklahoma Cooperative Extension Service area agricultural economics specialist.