 "The state corn yield for 2009 in Illinois is currently
projected to be between 165 and 170 bushels per acre, and the
projection for the average price is $3.75 per bushel. At these
price and yield levels, the average ACRE payment on corn acres
in Illinois would be $16 per acre for 2009.""Average ACRE
payments on corn acres in Illinois could easily be greater than
$60 per acre at the low end of the projected price range or if
state-average corn yields fall below current projections," said
Gary Schnitkey, U of I economist.
Given the current yield and price projections, he says that
the probability of receiving an ACRE payment on Illinois corn
acres in 2009 is roughly 60 percent, and the expected payment
level is greater than $30 per acre.
For soybeans, the 2009 state soybean yield for Illinois is
currently projected to be approximately 45 bushels per acre, and
the projection for the average price is $9.30 per bushel.
"At these price and yield levels, the ACRE payment for
soybeans in Illinois would be around $13 per acre. The average
ACRE payment for soybeans could potentially exceed $45 per acre
if prices or yields fall below these expected levels, and could
approach $90 per acre at the low end of the price and yield
ranges," Schnitkey said.
Given the current yield and price projections for soybeans,
the probability of receiving an ACRE payment on Illinois soybean
acres is just under 60 percent, with an expected payment level
of about $17 per acre.
"The Illinois wheat yield for 2009 is currently projected to
be around 56 bushels per acre, while the midpoint of the most
current WASDE price range is $5.30 per bushel. Average ACRE
program payments would be $51 per acre at these price and yield
levels. ACRE payments on wheat acres in 2009 could approach the
$75-per-acre payment limit if yields are below current
expectations or wheat prices fall in the lower portion of the
projected range," he said.
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Given current yield and price projections, the probability of
receiving an ACRE program payment on wheat acres in Illinois in 2009
is greater than 75 percent, with an expected payment of just over
$40 per acre.
The 2008 Farm Bill gives producers the option of choosing
commodity program support under traditional programs or the new ACRE
program. At this point, Schnitkey recommends choosing the ACRE
option.
"The ACRE option will require producers to give up about $5 per
acre in direct payments to be eligible for ACRE program payments.
Moreover, given current price levels, the price-based programs in
the traditional option are not expected to trigger payments between
2009 and 2012," Schnitkey said.
"Based on historical experience for corn, soybean and wheat acres
in Illinois, the ACRE program is expected to generate payments that
exceed the direct payments given up to enroll in the program over
time."
He says the chance of ACRE payments being triggered for corn,
soybeans and wheat in 2009 is projected to be higher than average.
This is due to the ACRE program price guarantees being above
expected price levels for 2009 for corn, soybeans and wheat.
"And expected yield levels (are) projected to be below ACRE
program benchmark yields, due to wet planting conditions and less
than optimal growing conditions in Illinois in 2009," he said.
For the full report, including graphics, visit
http://www.farmdoc.uiuc.edu/manage/
newsletters/fefo09_12/fefo09_12.html.
[Text from file received from
the University of Illinois at
Urbana-Champaign] |
