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Central IL | I signed up two weeks ago. I was only the 7th or 8th farmer to sign up in my county.
I think everyone is so obsessed with the details that they are missing the big picture. Since this program is based on change in gross income, you need to look at what type of situation will generate payments. My understanding in a very simplistic way is that the "target income" (that is my term) established by historic price times average historic yield needs to be high and the "current income" (i.e. 09 yield times 09 price) needs to be low. If that occurs, (yes, I know about the double triggers) then there is a potential for a significant payment. Today the 09 corn price is 75% of the 07/08 level used for the target income. If it stays at this level for the next year, there will be a payment. That big of a price drop almost trumps minor movements in yields.
So if I gamble giving up $6/ Acre for 4 years, will I generate that much income? At todays market values I believe the 09 ACRE payment could be around $50 to 60/acre. That makes 10,11,& 12 payments moot. I doubt there will be payments in 10,11,& 12 because if the prices level off or the current price increases in relation to the historic price; the ACRE program is only designed to pay when income "moves down".
For the naysayers, if I guess wrong about the market prices for next year and something happens to push corn back to $4.40, then I can sell my corn for a dollar more per bushel and still end up with more money in my pocket than where I will be at with today's prices. So is $6/acre worth a gamble for $50/acre ACRE payment or $180/acre market price increase. I think so!
Edited by jc217 8/7/2009 00:25
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ACRE (again)
