Posted 7/24/2009 11:42 (#786480 - in reply to #785541) Subject: Re: Well....I signed up for ACRE today
Grand Rapids, MI
Mbmaring - 7/23/2009 16:19
Ed Winkle - 7/23/2009 14:42 Ray, this makes LDP look like a piece of cake. Maybe it is. But I think the original post why I won't sign up, it doesn't fit my plan. Ed Winkle
If prices go low we have LDP at a higher price and with any yield without acre. Could we see not getting an acre payment because of a high yield but yet recieving a LDP on a hudge crop without acre?
While in theory it might be possible for state yields to be high enough to get a LDP without an ACRE payment, it is pretty much impossible in reality. The state average yield would need to be above 239 bushels. My math shows there is less than one in one billion chance of this happening.
For us math geeks, here is how I figured this: I figured the national average cash price would need to fall below $2.50 in order to get a PCP below $2 and earn an LDP (based on the fact that harvest prices are usually lower than the annual average) So the ACRE state guarentee for MN is about $600, so at a $2.50 this means the state average yield would need to be above 239 bushels to no earn an ACRE payment. The 5 year olympic state average is 161 bushels, and the 10 year standard deviation is 11.7 bushels. So 239 is over 6.5 standard deviations from the mean, implying the less than 1:1,000,000,000 chance of occurring!
Well....I signed up for ACRE today
