Grand Rapids, MI | Dave Cen.Ia - 8/6/2009 23:11
I went to an area meeting today that ISU extension presented and if I understood correctly, you are right. And to elaborate further, those are actual sales for that marketing year not average sales for several years.
Also, I have been arguing that we are actually giving up potentially more the 5 an acre due to the reduction in PCP, which may or may not come into play. Just today (stupidly) I discovered that the PCP is now kind of a floating average for the month which should take a lot of the gyration out of the LDP game. In other words, it would probably eradicate the chance of hitting any spike low to capitalize maximum returns thru LDP or marketing loan gain. Did I get this right?
Yes you have this right Dave. While it is true that you may reduce your LDP because of the lowered PCP, at those prices ACRE will pay out huge! The only situation we see this becoming an issue is where payment limits come into play. Generally ACRE more than makes up for the loss of LDP, but if the producer is payment limited out, ACRE can no longer make up for the LDP (with no limit) that he would have recieved. In this case we do sensitivity analysis to find the highest return which is usually only signing up a portion of the farms acres. |
ACRE (again)
