August 11, 2009
Illinois farmers likely to receive ACRE payments
There is a higher chance of ACRE payments this year, as current market price projections are below benchmark prices used to calculate ACRE state guarantees for corn, soy and wheat, according to University of Illinois economists Gary Schnitkey and Nick Paulson.
The state corn yield this year in Illinois is currently projected at 165 and 170 bushels per acre and the average price projection is US$3.75 per bushel, they said.
At these prices and yield levels, the average ACRE payment on corn acres in Illinois would be US$16 per acre for 2009, the economists said.
Schnitkey said average ACRE payments on corn in Illinois could easily be greater than US$60 per acre at the low-end of the projected price range or if state-average corn yields fall below current projections.
Based on current yield and price projections, the probability of receiving an ACRE payment on Illinois corn acres in 2009 is roughly 60 percent while the expected payment level is greater than US$30 per acre, Schnitkey said.
The 2009 state soy yield for Illinois is currently projected at about 45 bushels per acre, and the projection for the average price is US$9.30 per bushel. These indicate that ACRE payment for Illinois soy would be around US$13 per acre, and the average payment could exceed US$45 per acre is prices or yields fall below these expected levels, and could approach US$90 per acre at the low end of the price and yield ranges, Schnitkey said.
Based on current yield and price projections, the probability of receiving an ACRE payment on Illinois soy acres is just under 60 percent with an expected payment level of about US$17 per acre.
Illinois wheat yield for 2009 is currently projected at around 56 bushels per acre while the midpoint of the most current WASDE price range is US$5.30 per acre. Average ACRE payments would be US$51 per acre at these price and yield levels. ACRE payments on wheat acres in 2009 could approach the US$75 per acre payment limit if yields and prices are below current expectations, he said.
Given current yield and price projections the probability of receiving an ACRE payment on wheat acres in Illinois in 2009 is greater than 75 percent with an expected payment of just over US$40 per acre.
