United States 

Department of 

Agriculture

Economic

Research

Service

Economic

Research

Report

Number 84

December 2009

Andrea Woolverton

Edwin Young

Factors Infl uencing ACRE

Program Enrollment
www.ers.usda.gov

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Woolverton, Andrea

 Factors influencing ACRE program enrollment.

 (Economic research report (United States. Dept. of Agriculture. 

 Economic Research Service); no. 84)

 1. Agricultural price supports—United States.

 2. Agriculture and state—United States.

 I. Young, C. Edwin (Chester Edwin), 1948-

 II. United States. Dept. of Agriculture. Economic Research Service

 III. Title.

HD1761

Photo credits: Creatas for wheat and corn; USDA, ARS Image Gallery

for soybeans
United States

Department

of Agriculture

www.ers.usda.gov

A Report from the Economic Research Service

Abstract

Authorized by the 2008 Farm Act, the Average Crop Revenue Election (ACRE) program 

is the fi rst revenue-based, income-support program that calculates payments using recent 

market prices and a producer’s actual plantings. The payments are triggered when a 

farm’s revenue and State revenue (price multiplied by yield per planted acre) fall below 

a calculated guarantee for a crop. By contrast, other income-support programs are based 

on legislated rates and support levels, computed using a farm’s base acres and payment 

yields. Had the ACRE program been available during crop years 1996-2008, this report 

shows that farmers would have benefi ted more from participating in 2002 Farm Act 

programs than in the hypothetical ACRE program. The report further suggests that, for 

2009-12, producers of corn, soybeans, wheat, and rice are likely to benefi t more from the 

ACRE program than from the price-based, income-support programs. Initial enrollment 

data suggest that factors aside from expected market prices and yields entered into the 

enrollment decision such as producer risk preferences and initial learning and negotiation 

costs. Data indicate that about 8 percent of farms with almost 13 percent of eligible base 

acres elected to participate in ACRE, which is less than might be expected given priceand yield-based analysis alone.

Keywords: Average Revenue Crop Election, ACRE, 2008 Farm Act, farm bill, 

commodity programs, risk management, income support, ERS, USDA

Acknowledgments

The authors would like to thank Phil Sronce, Farm Service Agency, USDA, for a spreadsheet model of ACRE, for explanations of program operations, and for his review of this 

monograph, as well as his FSA colleagues Tom Tice and Bradley Karmen for providing 

data on initial program enrollment. The authors would like to thank USDA colleagues 

Paul Westcott, Robert Dismukes, Joe Cooper, and Phil Jarrell, and academic colleagues 

Carl Zulauf and Frayne Olson for their reviews, as well as Ryan Williams for support in 

creating the maps Thanks also go to our editor, Priscilla Smith and to Wynnice PointerNapper for graphic layout and design.

Andrea Woolverton, woolverton@ers.usda.gov

Edwin Young, ceyoung@ers.usda.gov

Factors Infl uencing ACRE 

Program Enrollment

Economic

Research

Report

Number 84

December 2009
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Factors Infl uencing ACRE Program Enrollment / ERR-84

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Contents

Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Catalysts for a Commodity Program That Addresses Revenue Risk . . . 2

Opportunity Costs and Payment Scenarios. . . . . . . . . . . . . . . . . . . . . . . . 5

Complex Program Results in a Variety of Payment Outcomes . . . . . . . . 9

A Historical Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

The Enrollment Decision in 2009 and Beyond . . . . . . . . . . . . . . . . . . . . 17

 The Farm-Level Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

 2009 Average Crop Revenue Election Program Enrollment. . . . . . . . . . 22

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Appendix A—Program Details. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

 Payment Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

 Key Payment Details. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Appendix B —Scenario A: State-level yield shocks (national average 

 market prices unaffected). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Appendix C—Scenario B: Falling market price scenario . . . . . . . . . . . 36

Recommended citation format for this publication:

Woolverton, Andrea, and Edwin Young. Factors Infl uencing 

ACRE Program Enrollment, ERR-84, U.S. Dept. of Agriculture, 

Econ. Res. Serv., December 2009.
iii

Factors Infl uencing ACRE Program Enrollment / ERR-84 

Economic Research Service/USDA

Summary

Authorized by the 2008 Farm Act, the Average Crop Revenue Election (ACRE) 

program is the fi rst Federal agricultural income-support method to be based on 

agricultural revenues and planted acres. Income-support programs continued 

from the 2002 Farm Act, such as direct and counter-cyclical payments, are 

based on legislated rates and a farm’s base acres. ACRE is a revenue guarantee 

program that farmers can select as an alternative to counter-cyclical payments. 

Producers had until August 14, 2009, to elect to participate in ACRE for 2009. 

What Is the Issue?

U.S. farmers eligible for the ACRE program face several unknowns because 

the program requires farmers to make assumptions about farm and State 

yields and commodity prices before deciding whether to participate in the 

program. Some may prefer payment certainty by remaining in a program 

with which they feel comfortable. 

What Did the Study Find?

Initial enrollment data as of October 2009 indicate that about 8 percent of 

farms with almost 13 percent of eligible base acres elected to participate in 

ACRE, which is less than might be expected given price- and yield-based analysis. However, enrolled producers must incur initial learning and negotiation 

costs and must forgo 20 percent of direct payments. These costs may be larger 

than the expected ACRE benefi ts for some producers in 2009 and beyond. As 

expected, ACRE enrollment is in regions that typically grow wheat, corn, and 

soybeans. The three crops comprise 96 percent of crops planted on ACREenrolled acreage. Remaining producers of eligible crops who did not elect to 

enroll in ACRE can still enroll in any of the next 3 years (until 2012), but those 

who do enroll must remain in the program through 2012. 

ERS researchers applied ACRE requirements to program-eligible crops from 

1996 to 2008 and analyzed whether farmers would have benefi ted more from 

participating in ACRE or in the 1996 and 2002 Farm Act programs during 

that time. They found that total payments under the 1996 and 2002 Farm 

Act programs exceeded estimated total ACRE program payments every 

year except 1996 and 1997. While most producers would have been better 

off participating in 1996 and 2002 Farm Act programs than in the ACRE 

program in 1996-2008, this may not be the case in crop years 2009-12. The 

prices used to calculate the initial ACRE revenue guarantees include the 

historically high commodity prices of 2007 and 2008. Thus, Government 

payments are likely to be higher for many farmers electing ACRE than for 

those who retain the 2002 Farm Act set of payments. 

By participating in ACRE, an agricultural producer forgoes counter-cyclical 

payments and is subject to a 20-percent reduction in direct payments and a 

30-percent reduction in marketing loan rates. Despite these tradeoffs, many 

U.S. farmers may fi nd ACRE attractive, particularly farmers who are producing 

crops—such as corn, wheat, and soybeans—for which market prices are 

projected to be high relative to historical levels. Producers of those crops are 

unlikely to be eligible for counter-cyclical payments and marketing loan benefi ts.
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Factors Infl uencing ACRE Program Enrollment / ERR-84

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Agricultural producers must consider two less quantifi able costs when deciding 

whether to elect to participate in ACRE: (1) the learning costs associated 

with the new revenue-based program, and (2) the negotiation costs due to the 

requirement that all producers/landowners in the farm operation must agree 

to participate. These factors will differ across producers and could discourage 

participation in ACRE.

ACRE payments are crop-specific and are based on planted acres of all farmprogram-eligible crops on a participating farm. Eligible crops include wheat, 

corn, barley, grain sorghum, oats, upland cotton, long-grain and mediumgrain rice, peanuts, pulse crops, and soybeans and other oilseeds. Payments 

are based on a “moving” 2-year average of market prices and on 5-year 

Olympic averages of yields. ACRE payments are triggered when both the 

farm and State revenues fall below benchmark levels. (An Olympic average is 

a 5-year average that “drops” the highest and lowest values.)

Two ACRE program generalities are evident. First, farms with yields that 

are positively correlated with State yields are more likely to receive ACRE 

payments given the dual-payment criterion. Second, the revenue guarantee 

(called the State ACRE Guarantee, or SAG) will follow relatively current 

market prices, high and low. As prices rise (fall), the SAG will increase 

(decrease), although by no more than 10 percent from one year to the next, 

regardless of changes in commodity prices or yields.

Given the relatively high initial SAG and projected crop prices, producers 

of wheat, corn, soybeans, and rice could qualify for payments under ACRE 

if they experience even a small decline in price or yield, which could offset 

most of the forgone direct payments. However, for farms that expect to 

receive counter-cyclical payments and marketing-loan benefi ts (upland cotton 

and peanut producers, for example), ACRE payments are unlikely to offset 

both the forgone payments and marketing loan benefi ts.

How Was the Study Conducted?

ERS researchers applied ACRE requirements to program-eligible crops from 

1996 to 2008 and analyzed whether farmers would have benefi ted more 

from participating in the ACRE program or in the 1996 and 2002 Farm 

Act programs during that time. The researchers then projected their fi ndings into crop years 2009-12. The historical costs were estimated for ACRE, 

assuming State-level historical production. The analysis was based on an 

indepth review of the 2008 Farm Act rules and regulations for ACRE. Data 

on planted acreage, production, prices, and enrollment from USDA’s National 

Agricultural Statistics Service and Farm Service Agency were used to simulate farm-level and aggregate impacts of ACRE.
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Introduction

Introduced in the 2008 Farm Act, the Average Crop Revenue Election (ACRE) 

Program is a new commodity program for crop producers that focuses on 

revenue risk by incorporating current State and farm revenues into the payment 

structure. The program, administered by USDA’s Farm Service Agency (FSA), 

reduces the risk of revenue defi ciencies for participating producers by providing 

variable income-support payments by crop to producers based on national 

prices and State- and farm-level yields.1 Once enrolled, direct payments and 

marketing loan rates are reduced by 20 and 30 percent, respectively, in 

exchange for potential ACRE benefi ts. The ACRE program is available beginning with the 2009 crop year as an alternative to the counter-cyclical payment 

(CCP) program for those producers who choose to elect ACRE and then annually enroll in the program. 

Primary ACRE enrollment factors to be considered by an agricultural 

producer include:

• price expectations

• yield expectations

• State- and farm-level yield correlation

• cash fl ow changes associated with reduced 2002 Farm Act program 

payments2

• producer risk preferences

• initial learning and negotiation costs associated with electing ACRE.

1A producer is an owner, operator, 

landlord, tenant, or sharecropper who 

shares in the risk of producing a crop and 

is entitled to share in the crop available 

for marketing from the farm, or would 

have shared had the crop been produced.

2In this report we use the phrase 

“2002 Farm Act programs” to refer to 

the set of commodity programs (direct 

payments, counter-cyclical payments 

and marketing loan benefi ts) that were 

available under the 2002 Farm Act and 

continue in the 2008 Farm Act.
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Catalysts for a Commodity Program 

That Addresses Revenue Risk

The Food, Conservation, and Energy Act of 2008 became law in June 

2008 and governs agriculture, conservation, nutrition, and rural development programs through 2012. Within the 2008 Farm Act, Title I commodity 

programs provide the primary source of income support for program crop 

producers. Title I commodity programs and Title XII crop insurance represent about 22 percent of projected Farm Act spending (fi g. 1). 

Prior to the 2008 Farm Act, the U.S. agricultural sector experienced a period 

of high income in 2002-07 when the 2002 Farm Act was in force.3 Farm net 

cash income exceeded pre-2002 records each year from 2003 onward, 

reaching a record high of more than $90 billion in 2008. High income was 

primarily driven by high commodity prices during this period (fi g. 2). 

Commodity program payments also contributed to producer income. 

However, at price levels well above fi xed target prices, the capability of the 

2002 Farm Act commodity programs (based on statutory prices) to address 

risk fell due to decreased frequency and size of payments. Decoupled 

programs such as direct payments (DP) provided a consistent level of income 

support in excess of $5 billion per year to eligible producers. In contrast, 

price-based marketing-loan benefi ts and counter-cyclical payments fl uctuated with prices and were important revenue sources in 2003-06, especially 

for upland cotton, peanuts, and corn (fig. 3). The importance of marketing 

loan benefi ts and counter-cyclical payments began to diverge after 2006 for 

different crops, as grain and oilseed prices increased more relative to fi xed 

target prices and loan rates than did upland cotton and peanut prices. In 

2007, farmers with historic base acres or who were producing upland cotton 

or peanuts were the primary recipients of price-based commodity payments 

3The Farm Security and Rural 

Investment Act of 2002 legislated 

commodity programs from 2002 to 2007.

Figure 1

Farm programs account for about 22 percent of Farm Act 

budget allocations FY 2008-17

Source: USDA, Economic Research Service using Congressional Budget Office estimates.

Other—1%

Nutrition Conservation

Crop insurance

Commodities

12%

10%

68% 9%
3

Factors Infl uencing ACRE Program Enrollment / ERR-84 

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such as counter-cyclical payments and marketing-loan benefi ts. Those 

payments amounted to approximately one-third of all commodity program 

payments. 

As price-based commodity support payments decreased for many producers 

(particularly of grains and oilseeds), producers’ input costs also were 

increasing. Key inputs such as fuel, fertilizer, and seed followed commodity 

price trends (fig. 2). The 2008 fertilizer costs alone were double the 2002 

costs. From 2002 to 2008, commodity prices were volatile. Thus, when the 

2002 Farm Act was to end in 2007, crop producers faced relatively large, 

Figure 2

Crop cash income and key expenses, 2002-09

Billion dollars

2009 forecast.

Source: USDA, Economic Research Service, Farm Income and Cost Data.

0

50

100

150

200

2002 2003 2004 2005 2006 2007 2008 2009

Crop sales

Fertilizer/seed/lime

Net cash income

Government payments

Figure 3

Commodity program payments, 2002-09

Billion dollars

2009 forecast.

Source: USDA, Economic Research Service, Farm Income Data, 2009.

Direct payments

Counter-cyclical payments

Marketing loan benefits

0

5

10

15

20

2002 2003 2004 2005 2006 2007 2008 2009
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volatile crop revenues and input costs with small Government payments. 

Price-based income-support programs designed to serve as income “safety 

nets” were not providing payments that were correlated with farm revenue, 

or the payments were small relative to operating costs.

The ACRE program’s inclusion in the 2008 Farm Act occurred in an agrieconomic environment of volatile, high prices and rising costs. In 2006, 

USDA held a series of farm-bill discussions to solicit opinions of producers 

and other industry stakeholders about the future of farm policy.4 Some 

participants saw the strong fi nancial situation as an opportunity to shift 

farm-bill spending away from commodity programs to focus on conservation, nutrition, and energy programs. Most farm groups on the other hand, 

argued that the commodity programs in the 2002 Act worked well and 

should not be changed signifi cantly. The National Corn Growers 

Association (NCGA) was a primary commodity group arguing for major 

changes, citing that payouts from marketing-loan benefits and countercyclical payments did not correlate with farm revenue changes. The NCGA 

argued for payments based on revenue changes. 

USDA announced a set of farm-bill proposals in January 2007 based on the 

discussions. The USDA proposals called for making U.S. agricultural 

commodity programs more market oriented and more compatible with World 

Trade Organization (WTO) commitments by switching support to decoupled 

direct payments and eliminating the fruit and vegetable planting restrictions on 

base acres. While the ACRE program has evolved from original proposals for a 

counter-cyclical revenue assistance program, the legislative outcome in the 

2008 Farm Act is the fi rst U.S. revenue-based farm payment program. The 

ACRE program is not a substitute for current crop revenue insurance products, 

but is an addition to existing agricultural income-support programs.5

4USDA farm-bill forum comments 

from producers and other stakeholders 

can be found at http://www.usda.gov/

wps/portal/usdafarmbill?contentidonly

=true&contentid=2006/03/0106.xml/. 

(Accessed January 2009).

5For further discussion of how 

the ACRE program was created, see 

Zulauf, Carl R., Michael R. Dicks, 

and Jeffrey D. Vitale. 2008. “ACRE 

(Average Crop Revenue Election) 

Farm Program: Provisions, Policy 

Background, and Farm Decision 

Analysis,” Choices, Vol. 23, No. 3 (3rd 

Quarter 2008):29-35.
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Opportunity Costs and Payment Scenarios

Agricultural producers had the opportunity to elect to participate in ACRE 

beginning in August 2009. Participants in the ACRE program are eligible for 

State-based revenue coverage that refl ects recent yields and recent national 

prices for designated program crops (see appendix A for additional program 

details).6 ACRE payments can be triggered by a decrease in national prices or 

reported State yields (fi g. 4). Enrolled producers will receive ACRE payments 

when both State-level and farm-level payment triggers are met (see box, 

“ACRE Defi nitions,” p. 29). The participation decision depends on the amount 

and variability of expected ACRE payments compared with 2002 Farm Act 

programs, as well as the producer’s risk tolerance.7

The ACRE program’s 20-percent reduction in guaranteed income through 

direct payments reduces the incentive for producers with high-valued base 

acres to participate in ACRE. Direct payments for producers with rice base 

acres, for example, are almost $100 per base acre (fi g. 5). These producers 

will incur a much higher fi nancial penalty for electing to participate in ACRE 

than producers with oats base, who receive average direct payments of $1 per 

base acre, or for producers with pulse (dry peas, lentils, chickpeas) base, who 

get no direct payments. Figure 6 indicates that direct payments are highest 

along the Mississippi River, along the Gulf Coast, and in central California. 

Producers in these regions are less likely to elect to participate in ACRE. 

6Eligible crops include wheat, corn, 

barley, grain sorghum, oats, upland 

cotton, long-grain and medium-grain 

rice, peanuts, and pulse crops (dry peas, 

lentils, small and large chickpeas), and 

soybeans and other oilseeds (sunfl ower 

seed, canola, rapeseed, saffl ower, 

mustard seed, fl axseed, crambe, and 

sesame seed). These commodities 

are generally referred to as “covered 

commodities and peanuts” within the 

farm bill legislation.

7Some producers may choose to 

enroll in ACRE even though expected 

ACRE payments may be less than 2002 

Farm Act program payments because 

the ACRE program has the potential 

for reducing revenue variability. Other 

producers may have a preference for 

payment certainty (direct payments) 

and for staying in a program with 

which they feel comfortable.

ACRE Payment Determination Process

Source: USDA, Economic Research Service analysis.

Corn ACRE Payment Determination

Farm-level process

Corn ACRE payments

NOT made to this

producer

Established corn

State ACRE

Guarantee (SAG)

[0.9 x (State 5-year

Olympic average yield

per planted acre x

2-year national

average price)]

Establish corn actual farm 

revenue [Reported commodity 

farm yield x (greater of: 12-month 

national average corn price or 

reduced loan rate)]

Yes No

Established corn

farm ACRE

benchmark revenue

[(5-year Olympic 

average farm yield x

2-year national

average price) + crop

insurance premium]

Establish corn actual State 

revenue [State yield per planted 

acre x (greater of: 12-month 

national average corn price or 

reduced loan rate)]

No Yes

Is actual State

revenue < State

ACRE Guarantee?

Is actual farm

revenue < farm

ACRE guarantee

revenue?

This schematic illustrates how ACRE payments are determined on an annual basis for each program crop. In this example, we will 

follow the process for corn on an enrolled farm for 1 crop year. To receive ACRE payments, both the State-level process and the

farm-level process must trigger payments as indicated by a “Yes” result across both processes within the schematic.

Figure 4

See box, “ACRE Definitions,” in appendix A.

State-level process

Corn ACRE payments

NOT made to any

producers in State

Corn ACRE payment made to producer(s) [lesser

of: (SAG-actual State revenue) or (0.25 * SAG)] x

0.833 (0.85 for 2012) x farm productivity ratio
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Rice, cotton, and peanuts with high-valued base acres are typically produced 

in these regions.

Marketing loan rates are reduced by 30 percent for ACRE participants. This 

reduction virtually eliminates any expected marketing-loan gains or loandefi ciency payments for any crop. However, the loan program will continue 

to assist ACRE participants who need funds for cash fl ow or tax management 

reasons, but want to delay selling their commodity. 

Market prices for the major crops (corn, wheat, soybeans, rice, and upland 

cotton) were relatively high over the last several years and are projected to 

remain at these levels over the next 10 years (USDA, Offi ce of the Chief 

Economist, 2009). High market prices in 2007/08 and 2008/09 mean that the 

2009/10 ACRE guarantee price is well above target prices and marketing loan 

rates for many major ACRE-eligible commodities (table 1). With effective 

target prices of $2.35 for corn, $5.56 for soybeans, $3.65 for wheat,8 and $8.15 

for rice, prices would need to decline signifi cantly from these projected 

2009/10 levels to trigger counter-cyclical payments (CCPs) for corn, soybeans, 

wheat, and rice (fi g. 7). Producers with upland cotton and peanut base acres 

would expect to receive counter-cyclical payments and possibly marketing loan 

benefi ts, which would reduce their incentive to enroll in ACRE.

8The effective target price for wheat 

is $3.40 per bushel in 2009.

Figure 5

Value per base acre of direct and counter-cyclical payments, 

2008 Farm Act1

1Assumes national average payment yields for direct and counter-cyclical payments. 

Maximum counter-cyclical payments assume 2009 target prices.

Source: USDA, Economic Research Service analysis using data from USDA, Farm Service Agency.

Maximum counter-cyclical payment

Direct payment

Dollars per base acre

0 20 40 60 80 100 120 140 160 180 200

Oats

Canola

Sunflower

Barley

Soybeans

Sorghum

Wheat

Corn

Upland cotton

Rice

Peanuts
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Table 1

Preliminary ACRE guarantee prices compared with projected prices and other program support prices

2009/10 Acre guarantee Effective 2009 2009 marketing

projected price price estimate target price1 loan rate

Corn (bu) $3.50 $4.13 $2.35 $1.95

Grain sorghum (bu) $3.00 $3.64 $2.22 $1.95

Barley (feed) (bu) $2.80 $4.09 $2.00 $1.85

Soybeans (bu) $9.40 $10.05 $5.36 $5.00

Wheat (bu) $5.20 $6.63 $3.40 $2.75

Long-grain rice (cwt) $12.50 $13.70 $8.15 $6.50

Medium- and short-grain rice (cw.) $20.00 $19.15 $8.15 $6.50

Upland cotton (lb) $0.54 $0.54 $0.65 $0.52

Peanuts (lb) $0.21 $0.22 $0.23 $0.18

Note: Bu = bushel; cwt = hundredweight; lb = pound.

1Target price minus direct payment rate.

Sources: USDA, Farm Service Agency, Preliminary and Final Average Crop Revenue Election (ACRE) Guarantee Prices for 2009 Compared 

With 2009/10 Price Forecasts, August 31, 2009 update (http://www.fsa.usda.gov/Internet/FSA_File/acre_prices_values_update.xls). Accessed 

September 10, 2009. 
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Other important costs and benefi ts that will be considered in the net expected 

ACRE benefi t calculations include learning and negotiation costs and benefi ts 

from reduced revenue risk exposure. The ACRE program is new, and learning 

costs will be incurred when developing a sound understanding of program 

details and State and farm yield dynamics. Farmers may not have an appreciation of how their farm revenues are related to State-level revenues. 

All landowners and operators on the farm must agree to elect ACRE. 

Negotiation costs will increase as the percentage of rented land, the 

complexity of lease arrangements, and the value of base acreage increases. 

Direct payments have been found to increase land values, and some 

landowners with high-value base acreage may be reluctant to accept the 

20-percent reduction in direct payments.

An important benefi t that potentially offsets the learning and negotiation 

costs is the reduction in revenue risk resulting in ACRE enrollment. There is 

value associated with annual reduction in revenue risk, even if net expected 

ACRE payments are less than expected 2002 Farm Act payments. These 

costs and benefi ts are diffi cult to quantify and are not included in the analysis. However, they are likely to be signifi cant factors in a producer’s decision to elect to participate in ACRE or not, and the weight given to each will 

vary across producer risk preferences.

Figure 7

Historical and forecast average U.S. prices, selected crops, 1990-2018

Dollars/bushel, dollars/cwt (rice)

2009-18 forecast.

Source: USDA, National Agricultural Statistics Service, and USDA, Office of the 

Chief Economist (2009).

Dollars per pound (upland cotton)

1990 92 94 96 98 2000 02 04 06 08 10 12 14 16 18

0

2

4

6

8

10

12

14

16

18

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Wheat

Corn

Soybeans

Rice Upland cotton
9

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Complex Program Results in a Variety

of Payment Outcomes

ACRE is a complex support program that can result in a variety of payment 

outcomes depending on producer, State, and market characteristics. This 

section uses two scenarios with key price and yield expectations to illustrate 

ACRE payment outcomes and to expand upon the associated monetary-based 

opportunity costs of enrollment for two selected commodities (corn and 

upland cotton) at the farm level.9

Each scenario estimates the net monetary benefi t from participating in 

ACRE. Net benefi ts include estimated 2002 Farm Act program payment 

tradeoffs. The ACRE program is a counter-cyclical payment substitute; therefore, CCPs are forfeited. The CCP tradeoff value is based on 100 percent of 

the effective target price since the decision not to enroll in ACRE preserves 

2002 Farm Act program benefi ts. ACRE participants will continue to receive 

80 percent of direct payments. ACRE participants’ eligibility for marketingloan benefi ts also continues; however, the loan repayment rates10 must be less 

than 70 percent of the marketing loan rate for marketing loan benefi ts 

(MLBs) to trigger. Marketing loan gains and loan deficiency payments for a 

producer enrolled in ACRE would equal the margin between the loan repayment rates and the reduced marketing loan rates. The marketing loan program 

would continue to benefi t ACRE participants with some short-term credit at 

favorable interest rates. Non-ACRE producers will continue to receive MLBs 

when market prices are less than the marketing loan rate. 

Scenario A: Given the nature of agricultural production and the positive 

correlation in yields across farmers in a region, it is common that a State 

may experience yield shocks with substantial differences between actual and 

expected yield. For example, in 1998, corn yield per planted acre in Georgia 

was 37 percent below the national yield. In 2001, it was 57 percent greater 

than the national average yield per planted acre. Depending on the State’s 

position within the national and global supply, State-level yield shocks may or 

may not have large impacts on national market prices. 

In this scenario, we assume the State-level weather-related yield shocks do 

not impact national (global) market prices for the various respective crops. 

For corn, this assumption is unlikely to be the case for the Corn Belt States, 

Iowa and Illinois in particular, but is certainly possible for States in peripheral corn-producing regions (Cooper, 2009a). For U.S. cotton-growing 

regions, the relatively low price-yield relationships suggest that State-level 

cotton yield shocks will have a relatively low impact on prices. With stable 

commodity prices, ACRE payments are likely to be triggered by low yields if 

both State and farm revenues fall below guarantee levels. 

Positive correlation between farm and State average yields is critical to ACRE 

payment outcomes. Coble estimates that, nationally, corn farm-level revenue 

has a correlation coeffi cient of almost 0.5 with State-level revenue (Coble, 

2009). The correlation coeffi cients for wheat and soybeans are around 0.4, 

whereas the cotton correlation coeffi cient is 0.34.11 As correlation decreases, 

the likelihood that the State and farm will both trigger ACRE payments in a 

particular year is lower.

9These scenarios are discrete, nonstochastic, and are used solely to illustrate 

ACRE payment outcomes with certain 

agricultural expectations. They do not 

take into consideration guarantees 

calculated separately for irrigated and 

nonirrigated land.

10Rate at which farmers are allowed 

to repay their loans when market prices 

are below the commodity loan rate. 

This lower repayment rate is based on 

the posted county prices (PCPs) for 

wheat, feed grains, or oilseeds; on the 

adjusted world price for rice or upland 

cotton; and on the national posted price 

for peanuts. Any accrued interest on the 

loan is waived.

11The fi gures are inferred from 

revenue simulations based on Stateand farm-level yield and price variability in 1980-2009.
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A State-level yield shock scenario for both corn and upland cotton production within the State for 2009-12 with the yield shock occurring in 2010 and 

2011 is illustrated in table 2 (see appendix B for full 2009-12 details). In this 

scenario, both crops trigger ACRE payments at the State level in 2010 and 

2011 when yield shocks are incurred. The SAG in 2012 declines because the 

2010 and 2011 yield declines are incorporated into the SAG calculation. The 

resulting decline in the SAG, however, is limited by the 10-percent constraint 

on the change in the SAG in any year. The 2012 corn and upland cotton SAGs 

are $701 ($696 unconstrained) and $447 ($437 unconstrained), respectively.

Farmer A receives corn ACRE payments in 2011 and upland cotton payments 

in 2010-11. In 2010, Farmer A’s corn yields are not as low as State yields. The 

farm-level payment criterion is not triggered, and Farmer A does not receive 

an ACRE corn payment for 2010. In 2012, Farmer A’s actual corn revenue 

and cotton revenue are both below the farm ACRE benchmark revenue level; 

however, ACRE payments are not triggered at the State level. 

ACRE payments triggered at the State level, but not at the farm level, are not 

expected to be common. The SAG is 90 percent of the ACRE guarantee price 

multiplied by the ACRE benchmark State yield. By contrast, the farm-level 

Table 2

Scenario A: State-level yield shocks in 2010 and 20111

Yield shocks Corn Upland cotton

2010 2011 2012 2010 2011 2012

State assumptions

ACRE price $5.35 $5.40 $5.23 $0.60 $0.59 $0.58

Actual yield/planted acre 105 98 172 500 600 964

Actual State revenue $561.75 $529.20 $899.56 $300.00 $354.00 $559.12

ACRE guarantee price $5.28 $5.33 $5.38 $0.59 $0.61 $0.60

Benchmark State yield/planted acre 163 163 144 920 904 817

State ACRE Guarantee (SAG)2 $772.26 $779.58 $701.10 $490.59 $496.30 $446.67

ACRE payment rate $193.07 $194.90 $.00 $122.65 $124.07 $.00

Farm assumptions

Planted acreage 100 100 100 100 100 100

Actual farm yield/planted acre 171 150 172 850 950 960

ACRE price $5.35 $5.40 $5.23 $0.60 $0.59 $0.58

Actual farm revenue/planted acre $914.85 $810.00 $899.56 $510.00 $560.50 $556.80

ACRE guarantee price $5.28 $5.33 $5.38 $0.59 $0.61 $0.60

Benchmark farm yield/ planted acre 162 165 165 929 913 946

Crop insurance premium/acre 30 30 30 24 24 24

Farm ACRE benchmark $886.35 $908.64 $916.89 $574.31 $580.91 $586.77

 revenue/planted acre

Does this producer receive 

 an ACRE payment? No Yes No Yes Yes No

Total farm ACRE payment $.00 $16,467.90 $.00 $10,314.26 $10,437.80 $.00

ACRE participation tradeoffs

Direct payment tradeoff $604.76 $604.76 $617.10 $722.29 $722.29 $737.04

Counter-cyclical payment tradeoff $.00 $.00 $.00 $3,211.73 $3,912.98 $4,614.23

Net ACRE participation monetary benefi t3 $(604.76) $15,863.14 $(617.10) $6,380.24 $5,802.53 $(5,351.27)

1Calculated values may differ from those shown in the table due to rounding error.

2SAG is limited to 90 percent of the prior year’s SAG. 3Potential marketing loan benefi ts are not incorporated into net ACRE benefi ts.

Source: USDA, Economic Research Service calculations.
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benchmark revenue is 100 percent of the ACRE guarantee price multiplied 

by the farm benchmark yield. Moreover, the farmer-paid premium for crop 

insurance is added into the farm’s benchmark revenue. The differences in the 

calculation of the farm and State revenue targets imply the State-level ACRE 

payment trigger is more diffi cult to meet than the farm-level trigger. Farmlevel loss could be greater than the State-level loss, illustrating the need for 

the producer to consider crop insurance.

The ACRE enrollment tradeoff is net positive from 2009-12 for both crops, 

assuming there are no LDPs for the price-yield value in scenario A. Here lies 

an interesting nuance. Building on the 90- versus 100-percent discussion 

above, when corn and upland cotton ACRE payments are triggered in 2010 

and again in 2011 for upland cotton, the farm-level revenue loss is smaller 

than State-level revenue loss. Nonetheless, the ACRE payment rate is based 

on the State-level revenue loss adjusted for the farm productivity ratio.12

Therefore, Farmer A’s 2010 corn ACRE payment is substantial relative to 

Farmer A’s revenue loss because the farm’s reported yield loss was not as 

severe as the State’s yield loss. The relative size of the upland cotton ACRE 

payments compared to revenue loss in 2010 and 2011 is similar. However, 

the loss of upland cotton CCPs that would have been paid during 2009-12 

must be subtracted from the ACRE payment to evaluate the net benefi t. 

Scenario B: This scenario illustrates the impacts on ACRE payments 

if national average market prices decrease in the event that agricultural 

production exceeds global demand. As market prices decrease, the likelihood of receiving commodity counter-cyclical and loan defi ciency payments 

increases. These program payments are based on differences between fi xed 

support prices and market prices. As in scenario A, farmers would need to 

consider tradeoffs when participating in ACRE rather than in 2002 Farm Act 

income-support programs. Expected tradeoffs would vary across commodities. For example, the difference between current market prices and countercyclical payment target prices is much larger for corn than for cotton. 

A State-level scenario where national prices are falling for both corn and 

upland cotton for 2009-12 is shown in table 3 (see appendix C for full 

2009-12 details). In this example, ACRE payments for corn are triggered 

in 2011-12 as the corn price decreases and actual State revenue falls below 

the State ACRE Guarantee for those years. Upland cotton producers in this 

scenario are also eligible for ACRE payments in 2011 and 2012. 

Farmer B in this example planted 100 acres of both corn and upland cotton. 

Farmer B generally has a corn yield per planted acre similar to the State 

average and an upland cotton yield per planted acre above the State average. 

In the case of corn, both State- and farm-level triggers are met and ACRE 

payments are made to Farmer B in 2011-12. The corn ACRE payments 

exceed the direct and counter-cyclical payment tradeoff in 2011 only, 

resulting in a negative net benefi t from the ACRE program.13

For upland cotton, Farmer B’s actual farm revenue is less than benchmark 

revenue in 2011-12. When the upland cotton price is assumed to drop 

$0.06/lb from 2010 to 2011, Farmer B receives a cotton ACRE payment, 

12ACRE payment rate is capped at 25 

percent of the SAG.

13Counter-cyclical payments would 

be zero in this instance.
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as both the State- and farm-level triggers are activated in 2011. Farmer B 

receives a cotton ACRE payment again in 2012. 

As the upland cotton market price decreases, Farmer B begins to trade off 

actual cotton CCPs for potential benefi ts from ACRE enrollment. The 2011 

upland cotton ACRE participation tradeoff is negative for 2009-12, even with 

a positive ACRE payment. The CCP becomes signifi cantly larger as the 

national average upland cotton price falls from $0.62 to $0.47, all other 

factors being equal.14 Any time the upland cotton market price is below 

$0.52, the reduced marketing-loan benefi ts also enter the tradeoff calculation.

Together, scenarios A and B provide ACRE payment applications incorporating varying market price and yield issues that infl uence both ACRE 

enrollment and budgetary outcomes. Scenario A illustrates both that (1) 

it is possible for ACRE payments to be triggered at the State-level, but an 

individual farmer may not receive ACRE payments when other farmers in 

the State are receiving ACRE payments; and (2) it is possible for ACRE 

payments to be triggered at the farm level, without ACRE payments being 

made to the farmer. Scenario B with “falling prices” introduces an interesting 

14The maximum CCP rate for upland 

cotton is $0.1258 per pound.

Table 3

Scenario B: Falling market price scenario1

Falling prices Corn Upland cotton

2010 2011 2012 2010 2011 2012

State assumptions

ACRE price $4.50 $4.00 $3.75 $0.58 $0.52 $0.47

Actual State yield/planted acre 168 172 170 964 975 982

Actual State revenue $756.00 $688.00 $637.50 $559.12 $507.00 $461.54

ACRE guarantee price $5.15 $4.78 $4.25 $0.59 $0.60 $0.54

Benchmark State yield/ planted acre 163 165 167 943 962 970

State ACRE guarantee (SAG)2 $753.96 $709.09 $640.05 $503.73 $519.48 $471.26

ACRE payment rate $.00 $21.09 $2.55 $.00 $12.48 $9.72 

Farm assumptions

Planted acreage 100 100 100 100 100 100

Actual farm yield/planted acre 164 170 169 1,000 1,020 1,010

ACRE price $4.50 $4.00 $3.75 $0.58 $0.48 $0.47

Actual farm revenue/planted acre $738.00 $680.00 $633.75 $580.00 $489.60 $474.70

ACRE guarantee price $5.15 $4.78 $4.25 $0.59 $0.58 $0.51

Benchmark farm yield/ planted acre 164 165 168 938 968 987

Crop insurance premium/acre 30 30 30 24 24 24

Farm ACRE benchmark

 revenue/planted acre $872.91 $816.82 $742.10 $579.49 $585.18 $527.23

Does this producer receive 

 an ACRE payment? No Yes Yes No Yes Yes

Total farm ACRE payment $.00 $1,754.24 $217.04 $.00 $1,045.59 $840.57

ACRE participation tradeoffs

Direct payment tradeoff $604.76 $604.76 $617.10 $722.29 $722.29 $737.04

CCP tradeoff $.00 $.00 $.00 $7,419.23 $8,821.73 $8,821.73

Net ACRE participation monetary benefi t3 $604.76 $1,149.48 ($400.06) $(8,141.52) $(8,498.43) $(8,718.20)

1Calculated values may differ from those shown in the table due to rounding error. 

2SAG is limited to 90 percent of the prior year’s SAG. 3Potential marketing loan benefi ts are not incorporated into net ACRE benefi ts.

Source: USDA, Economic Research Service calculations.
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tradeoff dynamic in the enrollment decision when market prices are less than 

the effective target price. At this price point, relatively large CCPs are likely 

diffi cult to offset with expected ACRE payments.

In general, farms with yields that are positively correlated with State yields 

are more likely to receive ACRE payments, all other factors being equal. The 

dynamic nature of the State ACRE Guarantee means that, in the long run, 

the revenue guarantee will follow both high and low prices. The 10-percent 

restriction on the year-to-year revenue guarantee variation ensures that the 

revenue guarantee adjustment is moderated relative to large price changes. 
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A Historical Perspective

ACRE payments are highly related to market prices and current production. 

As it is diffi cult to predict the future, it is diffi cult to predict ACRE payment 

outcomes. To gain perspective regarding potential ACRE payment outcomes, 

it is useful to look at historical production and price patterns and hypothetical 

ACRE outcomes (all other factors remaining the same).

Using 1996 as the starting year, fi gure 8 provides maximum hypothetical 

ACRE payments for fi ve major program crops, assuming State-level historical 

production and U.S. price patterns.15 From this perspective, ACRE payments 

generally would have trended upward following an immediate price or yield 

shock, but then leveled. These maximum-payment outcomes assume all 

planted acres across the country were enrolled and all enrolled acres received 

an ACRE payment when payments were triggered at the State level. Hence, 

this analysis likely provides an upper bound on ACRE payments over the 

time span. Payments would have exceeded $5 billion a year in crop years 

1998 and 1999 when commodity prices declined, with corn and soybeans 

accounting for over half of the payments. Producers would also have received 

80 percent of the decoupled production fl exibility contract payments 

(replaced by direct payments) each year. ACRE would have paid over $1 

billion for upland cotton in crop years 1999 and 2001. 

Assuming ACRE payments as illustrated in fi gure 8, would producers have 

been better off with ACRE or with the mix of programs in place during 1996-

2008? To answer this question we compare estimated ACRE costs, including 

80 percent of production fl exibility contract payments and direct payments, 

with actual program expenditures (fi g. 9).16 Total 1996 and 2002 Farm Act 

program payments exceeded estimated total ACRE program payments in 

15This analysis assumes that annual 

production levels under ACRE would 

have been the same as under the 

1996 and 2002 Farm Act commodity 

programs and incorporates the SAG 

10-percent change limits.

16The ACRE program cost estimates do not include any marketing 

loan benefi ts. With ACRE, marketing 

loan rates are reduced by 30 percent. 

Marketing loan benefi ts would have 

been triggered for upland cotton in 

2001, for example, when market prices 

fell below $0.30 per pound.

Figure 8

Hypothetical ACRE payments assuming historical production 

and price patterns1 

Billion dollars

1Based on actual commodity prices and State-level yields, 1991-2008

Source: USDA, Economic Research Service analysis using data from USDA, National 

Agricultural Statistics Service.

1996 97 98 99 2000 01 02 03 04 05 06 07 08

0

0.5

1.0

1.5

2.0

2.5

Soybeans

Rice

Upland cotton

Wheat

Corn

 
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every year except for 1996 and 1997. While some individual producers may 

have received higher payments with ACRE in this time period, most would 

not have, due to relatively high price-based marketing-loan benefi ts and 

counter-cyclical payments. 

The starting year for the SAG can have a large impact on payment outcomes 

with ACRE. Therefore, starting years either at the top or the bottom of a 

price trend are likely to yield different payout results. Figure 10 illustrates 

that using 1996 as the starting year results in different payment outcomes for 

years 1996 through 2000 than would have occurred had the program begun 

to operate earlier (e.g., 1985). This difference is due to restrictions within the 

ACRE program that limit changes in the ACRE guarantee to no more than 

10 percent from year to year. In Iowa, for example, if ACRE had begun in 

1996, the State ACRE Guarantee would have been $312 per acre. However, 

if the program had begun operating in 1985, the Iowa corn revenue guarantee 

in 1996/97 would have been $292 due to the 10-percent cap on the increase 

from the 1995/96 Iowa corn guarantee of $265/planted acre.

The 10-percent cap would have continued to limit the State ACRE Guarantee 

through 2000/01. Thus, if the price decline that started in 1996 repeats itself 

beginning in 2009, the high starting price that results from the high prices in 

2007 and 2008 will increase expected ACRE payments for some time into the 

future. ACRE program costs would have been $1.3 billion (over 25 percent) 

higher had the program begun in 1996 compared to beginning in 1985. 

Figure 9

Actual program costs compared with estimated ACRE costs, 

1996-20081

Billion dollars

1Crops analyzed were: corn, wheat, soybeans, rice, and upland cotton.

2Includes direct and counter-cyclical payments, market loss assistance payments, 

and marketing loan benefits. 

3Assumes 100-percent participation in ACRE and 80 percent of direct payments.

Source: USDA, Economic Research Service analysis using data from USDA, Farm Service Agency.

Estimated ACRE program costs3 Actual program costs2

0

5

10

15

20

1996 97 98 99 2000 01 02 03 04 05 06 07 08

Crop year
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Figure 10

Estimated ACRE payouts: For corn, “starting year” matters1

Billion dollars

1Based on actual corn prices and State-level yields, 1991-2008.

Source: USDA, Economic Research Service calculations.

Start in 1996 Start in 1985

Crop year

0

0.5

1.0

1.5

2.0

2.5

1996 97 98 99 2000 01 02 03 04 05 06 07 08
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The Enrollment Decision in 2009 

and Beyond

With the introduction of the ACRE program, farmers must now choose 

between continued enrollment in the 2002 Farm Act farm income-support 

programs or enrolling in the ACRE program. Either choice has its own set of 

benefi ts and tradeoffs. As the previous scenarios and discussion illustrate, the 

decision to elect to participate in ACRE depends on a wide range of factors, 

including market expectations and producer risk preferences, and varies with 

commodity mix in production.

The ACRE program is revenue-based—payments are equally based on prices 

and yields. However, given recent historical price trends, the price component 

of the program will likely have a large infl uence on enrollment decisions. 

Prices for most program commodities were at or near historical highs in 2008 

and 2009 (see fig. 7, p. 8). While prices are projected to decline somewhat for 

the next several years, they are projected to remain at historically high levels. 

The ACRE guarantee price for the 2009/10 crop will be calculated using the 

2007/08 and 2008/09 prices. 

Table 1 presents a comparison of the ACRE guarantee price with projected 

prices for 2009-10, as well as the marketing loan rate and effective countercyclical target price. The price projections indicate that prices for all of the 

commodities will be lower than the average for the 2 prior years. If we assume 

that 2009 yields per planted acre are similar to the 2004-08 Olympic (5-year) 

average, the price relationships indicate that many producers will strongly 

consider election of ACRE. Price projections for corn, grain sorghum, barley, 

oats, and wheat are over 10 percent lower than the ACRE price guarantee, 

creating a high probability of ACRE payments in 2009/10. Price projections 

for soybeans and upland cotton are almost 10 percent lower than the 2-year 

average. Upland cotton producers will fi nd ACRE less attractive due to the 

low price projection for upland cotton ($0.54/lb.), which is near the marketing 

loan rate and below the effective counter-cyclical target price. Upland cotton 

producers will likely receive higher payments from 2002 Farm Act programs. 

The Farm-Level Decision

There is a high probability of ACRE payments in 2009/10 based on the 

USDA price projections (Cooper, 2009b). We illustrate some factors that will 

infl uence participation by producers of various commodities in four regions:

1. A Corn Belt corn/soybean farm (Iowa)

2. A Northern Plains wheat farm (South Dakota)

3. A Southeastern cotton/corn farm (Georgia)

4. A Delta rice/soybean farm (Mississippi)

For these examples, we base our typical farms on representative-crop acreage 

and base-acreage data for the selected regions, using the Agricultural Resource 

Management Survey, conducted by the Economic Research Service and the 

National Agricultural Statistics Service, USDA. To estimate ACRE payments, 

we assume that individual Farm ACRE Benchmark Revenue per planted acre is 

equal to the State ACRE Guarantee per planted acre for the respective States. 
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The case for a typical Iowa farm is illustrated in table 4. We assume that 

the farm has 585 base acres, but plants 710 acres total. If the farmer elects 

to participate in ACRE, he or she must forgo $2,478 in direct payments 

each year. A farmer electing ACRE in 2009 would need $9,900 of ACRE 

payments over 4 years to offset the forgone direct payments. 

We assume that the farm and State face across-the-board crop revenue shortfalls ranging from 0 to 20 percent for each commodity and have the same 

level of revenue (i.e., the same yield and price). With a 5-percent revenue 

reduction, the farm will receive $755 ($10.07/acre on planted wheat acres) in 

wheat ACRE payments. 

If revenue declines by 10 percent, ACRE payments would also be available 

for planted corn and soybean acres. However, ACRE payment acres cannot 

exceed the farm’s historical base acres. When planted acres equal historical 

base acres, the ACRE payment acres equal 83.3 percent of the planted acres 

(85 percent in 2012). In this example, base acres are less than 83.3 percent of 

the planted acres (710 planted acres x 0.833 = 591.4 > 585 base acres).17

Based on these considerations, the Iowa producer would likely choose to designate all planted soybean acres as potential payment acres and designate the 

17Farmers would need to designate 

acreage for ACRE payments by September 

30 of each year of participation.

Table 4

ACRE 2009/10 payouts for a typical Iowa corn/soybean farm

 Corn Soybeans Wheat 2009 payments1

Acres planted 350 285 75 

2009 expected yield per planted acre 173 51 44 

2009 price expectation $3.50 $9.40 $5.20 

Olympic average yield per planted acre 166 50 41 

ACRE 2-year price guarantee $4.13 $10.05 $6.63 

ACRE revenue guarantee (per acre) $616 $455 $242 

ACRE revenue guarantee (total farm) $194,127 $129,665 $18,125 

Expected market revenue (per acre) $606 $479 $229 

Expected market revenue: 

0-percent revenue shortfall $211,925 $136,629 $18,125 $0

 ACRE payment per planted acre $0.00 $0.00 $0.00 

5-percent revenue shortfall $201,329 $129,798 $17,219 $755

 ACRE payment per planted acre $0.00 $0.00 $10.07 

10-percent revenue shortfall $190,733 $122,966 $16,312 $9,865

 ACRE payment per planted acre $8.08 $19.58 $20.13 

15-percent revenue shortfall $180,136 $116,135 $15,406 $24,995

 ACRE payment per planted acre $33.30 $39.55 $30.20 

20-percentrevenue shortfall $169,540 $109,303 $14,500 $40,202

 ACRE payment per planted acre $58.52 $59.51 $40.26 

Base acres 335 240 10 585

Direct and counter-cyclical payment yield 116 36 36 

Traditional program benefi ts: 

 Direct payments $9,064 $3,167 $158 $12,388

 Expected counter-cyclical payments $0 $0 $0 $0

 Expected marketing loan benefi ts $0 $0 $0 $0

Note: ACRE payments can only be received on 585 base acres.

1Farm would also be eligible to receive 80 percent of direct payments with ACRE.

Source: USDA, Economic Research Service calculations based on Agricultural Resource Management Survey (ARMS) data. 

ARMS is produced by USDA’s National Agricultural Statistics Service and ERS.
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remaining base acres as potential corn or wheat payment acres. In this example, 

the farmer has 285 planted acres of soybeans and will receive ACRE payments 

on 237.4 acres (285 planted acres x 0.833) of soybeans. The 237.4 payment 

acres are subtracted from the total base acres within the farm unit to determine 

remaining corn or wheat ACRE payment acres (485 base acres – 237.4 soybean 

payment acres = 247.6 acres remaining). At lower levels of revenue reductions (5 

percent), the producer would maximize payments by giving up payments on 6.4 

acres of corn plantings. If a 10-percent revenue shortfall occurred, the producer 

would receive ACRE payments of $9,865, offsetting almost the entire 4 years of 

forgone direct payments.

If the revenue shortfall increases to 15 percent, the producer would maximize 

payments by forgoing payments on wheat plantings, since ACRE payments 

per planted acre would be larger for corn. 

Our typical wheat farm can expect ACRE payments with average yields 

(no reduction in expected revenue) in 2009 (table 5). While wheat, corn, 

and sorghum prices are projected to be relatively high in 2009/10, they 

are more than 10 percent lower than the 2007/08-2008/09 average. This 

producer could expect ACRE payments with average yields. Expected ACRE 

payments would offset 4 years of forgone direct payments with no reduction 

in expected revenue in 1 of 4 years. ACRE payments per acre of wheat and 

Table 5

ACRE payouts for a typical South Dakota wheat farm

 Corn Soybeans Wheat Sorghum Barley 2009 payments1

Acres planted 22 15 678 69 18 

2009 expected yield per planted acre 113 36 42 29 28 

2009 price expectation $3.50 $9.40 $5.20 $3.00 $2.80 

Olympic average yield per planted acre 110.2 34 40.5 29 28 

ACRE 2-year price guarantee $4.13 $10.05 $6.63 $3.64 $4.09 

ACRE revenue guarantee (per acre) $409 $308 $242 $95 $103 

ACRE revenue guarantee (total farm) $9,001 $4,613 $163,848 $6,555 $1,855 

Expected market revenue (per acre) $396 $338 $218 $87 $78 

Expected market revenue: 

0-percent revenue shortfall $8,701 $5,076 $148,075 $6,003 $1,411 $14,218

 ACRE payment per planted acre $11.34 $0.00 $19.38 $6.67 $20.55 

5-percent revenue shortfall $8,266 $4,822 $140,671 $5,703 $1,341 $21,057

 ACRE payment per planted acre $27.82 $0.00 $28.47 $10.29 $23.81 

10-percent revenue shortfall $7,831 $4,568 $133,268 $5,403 $1,270 $27,932

 ACRE payment per planted acre $44.29 $2.47 $37.57 $13.91 $27.08 

15-percent revenue shortfall $7,396 $4,315 $125,864 $5,103 $1,200 $34,982

 ACRE payment per planted acre $60.76 $16.57 $46.67 $17.54 $30.34 

20-percent revenue shortfall $6,961 $4,061 $118,460 $4,802 $1,129 $42,032

 ACRE payment per planted acre $77.23 $30.66 $55.76 $21.16 $33.61 

Base acres 22 29 628 65 60 804

Direct and counter-cyclical payment yield 63 28.6 24.4 42.2 32.7 

Traditional program benefi ts: 

 Direct payments $323 $304 $10,467 $800 $392 $12,286

 Expected counter-cyclical payments $0 $0 $0 $0 $0 $0

 Expected marketing loan benefi ts $0 $0 $0 $0 $0 $0

1Farm would also be eligible to receive 80 percent of direct payments with ACRE.

Source: USDA, Economic Research Service calculations based on Agricultural Resource Management Survey 

(ARMS) data. ARMS is produced by USDA’s National Agricultural Statistics Service and ERS.
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feed barley planted are greater than for the other commodities until revenue 

losses approach 10 percent. At 10-percent revenue losses for each planted 

commodity, corn ACRE payments per acre are higher. 

Our third farm is a Southeastern cotton/corn farm (table 6). Almost 85 percent 

of this farm’s base acres are cotton base. The farm has shifted the majority of 

its acreage to corn in recent years. With cotton prices projected to be $0.54 per 

pound, which is about the average for the 2 prior years, the farmer can expect to 

receive ACRE payments with a 15-percent revenue shortfall. However, cotton 

base has a high value per acre, given direct payment rates and potential countercyclical payments. A 1-year decline in cotton revenue of almost 15 percent 

would be required to offset 4 years of forgone direct payments for this farm. 

The potential counter-cyclical payment loss for cotton base and cotton 

marketing-loan benefi ts make it unlikely that this farm would elect to participate in the ACRE program. Electing to enroll cotton acres in the ACRE 

program would require giving up potential counter-cyclical payments of 

$46,688 per year. Thus, even though this farm could likely receive ACRE 

payments for corn on over half of its planted acreage, the ACRE payments are 

not likely to offset forgone cotton direct and counter-cyclical payments. This 

example points out that farms expecting to receive counter-cyclical payments or 

marketing-loan benefi ts during 2009-2012 (upland cotton and peanuts) are less 

likely to fi nd ACRE an attractive option.18

18Each producer’s mix of base acres and 

program yields, coupled with expectations 

of ACRE payments, will likely infl uence 

his or her ultimate decision.

Table 6

ACRE payouts for a typical Georgia cotton/corn farm

 Corn Soybeans Wheat Cotton 2009 payments1

Acres planted 490 25 13 380 

2009 expected yield per planted acre 111 29 31 812 

2009 price expectation $3.50 $9.40 $5.20 $0.54 

Olympic average yield per planted acre 108.9 27.7 25.8 802 

ACRE 2-year price guarantee $4.13 $10.05 $6.63 $0.54 

ACRE revenue guarantee (per acre) $404 $251 $154 $391 

ACRE revenue guarantee (total farm) $198,103 $6,264 $2,001 $148,662 

Expected market revenue (per acre) $389 $273 $161 $438 

Expected market revenue: 

0-percent revenue shortfall $190,365 $6,815 $2,096 $166,622 $6,446

 ACRE payment per planted acre $13.15 $0.00 $0.00 $0.00 

5-percent revenue shortfall $180,847 $6,474 $1,991 $158,291 $14,383

 ACRE payment per planted acre $29.34 $0.00 $0.67 $0.00 

10-percent revenue shortfall $171,329 $6,134 $1,886 $149,960 $22,507

 ACRE payment per planted acre $45.52 $4.34 $7.39 $0.00 

15-percent revenue shortfall $161,810 $5,793 $1,781 $141,629 $36,686

 ACRE payment per planted acre $61.70 $15.69 $14.10 $15.42 

20-percent revenue shortfall $152,292 $5,452 $1,676 $133,298 $51,905

 ACRE payment per planted acre $77.88 $27.04 $20.82 $33.68 

Base acres 0 0 138 770 908

Direct and counter-cyclical payment yield 62.5 15 35.2 688 

Traditional program benefi ts: 

 Direct payments $0 $0 $2,104 $29,434 $31,538

 Expected counter-cyclical payments $0 $0 $0 $46,688 $46,688

 Expected marketing loan benefi ts $0 $0 $0 $0 $0

1Farm would also be eligible to receive 80 percent of direct payments with ACRE.

Source: USDA, Economic Research Service calculations based on Agricultural Resource Management Survey (ARMS) data. 

ARMS is produced by USDA’s National Agricultural Statistics Service and ERS.
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Our fourth farm (table 7) is a rice/soybean farm in the Delta Region 

(Mississippi). Rice comprises about two-thirds of the farm’s base with the 

remainder as soybean and wheat base. Potential ACRE payments will need to 

be high for this farm to offset the forgone direct payments. Rice base acres 

have the highest direct payments per base acre (Young et al.). ACRE 

payments would need to exceed $44,000 to offset the forgone direct 

payments.19 However, as with other commodities, long-grain rice prices were 

high in 2007 and 2008, which resulted in a high ACRE guarantee price. 

Long-grain rice prices in 2009 are projected by USDA to be around 8 percent 

lower than the ACRE guarantee price. To offset total forgone direct payments 

over 4 years, this farm would need at least 1 year when some combination of 

commodity revenue is over 12 percent lower than expected revenue in 2009. 

Our wheat farm could expect ACRE payments to offset forgone direct 

payments over the 2009-12 crop years with no decline in expected revenue 

this year, whereas the corn/soybean and rice farms would require 1-year 

declines of 10 and 15 percent, respectively. ACRE payments (primarily from 

corn) for our cotton farm would likely offset forgone direct payments with 

a 10-percent decline in revenue in any one year, but these producers would 

fi nd ACRE less attractive (depending on the share of cotton base acres on the 

19This farm would have direct 

payments and potential ACRE 

payments that would exceed allowable 

payment limits if only one individual 

operator is involved with the farm operation. If multiple operators are involved 

in the farm operation, payment limits 

will be less of an issue.

Table 7

ACRE 2009/10 payouts for a typical Mississippi rice/soybean farm

 Rice Soybeans Wheat 2009 payments1

Acres planted 578 303 70 

2009 expected yield per planted acre 71 39 52 

2009 price expectation $12.50 $9.40 $5.20 

Olympic average yield per planted acre 69 37 49 

ACRE 2-year price guarantee $13.70 $10.05 $6.63 

ACRE revenue guarantee (per acre) $854 $338 $292 

ACRE revenue guarantee (total farm) $493,883 $102,500 $20,467 

Expected market revenue (per acre) $888 $367 $270 

Expected market revenue: 

0-percent revenue shortfall $512,975 $111,080 $18,928 $1,282

 ACRE payment per planted acre $0.00 $0.00 $18.31 

5-percent revenue shortfall $487,326 $105,526 $17,982 $7,532

 ACRE payment per planted acre $9.45 $0.00 $29.57 

10-percent revenue shortfall $461,678 $99,972 $17,035 $31,792

 ACRE payment per planted acre $46.41 $6.95 $40.84 

15-percent revenue shortfall $436,029 $94,418 $16,089 $58,572

 ACRE payment per planted acre $83.38 $22.22 $52.10 

20-percent revenue shortfall $410,380 $88,864 $15,142 $85,352

 ACRE payment per planted acre $120.34 $37.49 $63.36 

Base acres 627 208 94 930

Direct and counter-cyclical payment yield 42 20 34 

Traditional program benefi ts: 

 Direct payments $51,385 $1,517 $1,403 $54,304 

 Expected counter-cyclical payments $0 $0 $0 $0

 Expected marketing loan benefi ts $0 $0 $0 $0

1Farm would also be eligible to receive 80 percent of direct payments with ACRE.

Source: USDA, Economic Research Service calculations based on Agricultural Resource Management Survey (ARMS) data. 

ARMS is produced by USDA’s National Agricultural Statistics Service and ERS.
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farm) due to the signifi cant counter-cyclical payments and marketing-loan 

benefi ts that they would forgo. 

A less quantifi able feature of ACRE is the potential for stabilizing effects on 

farm revenue even at higher market prices. Producers who value the revenuestabilizing features of ACRE will likely elect ACRE even if it is not clear that 

expected payments would offset potential losses in direct payments. Given 

the high probability of State-level ACRE payments being triggered, these 

farmers are likely to elect ACRE. Zulauf (2009) estimates that, when Statelevel revenue declines by 10 percent or more, a farm-level trigger will be met 

on more than 80 percent of farms in Illinois.

Based on our four typical farms, expected revenue decisions, and using the 

framework adopted here, it is likely that many farmers will view ACRE as an 

attractive alternative to 2002 Farm Act programs. High market prices in 2007 

and 2008 resulted in relatively high ACRE price guarantees used to calculate ACRE payouts. Many corn, wheat, and soybean producers can expect 

ACRE to offset most, if not all, of the forgone 20 percent of direct payments 

(Cooper, 2009b). In addition, it is unlikely that counter-cyclical payments or 

marketing-loan benefi ts will be triggered for these commodities during 2009-

12. Even if payments under the 2002 Farm Act price-based programs are triggered, the price declines would likely result in substantial ACRE payments. If 

we assume that prices decline suffi ciently to trigger the maximum reductions 

in the ACRE guarantee (10 percent) every year until 2012, the ACRE guarantee prices would remain well above effective target price levels for corn, 

soybeans, wheat, and rice. However, for farms that expect to receive countercyclical payments and marketing-loan benefi ts in 2009 (upland cotton and 

peanut producers), ACRE payments are unlikely to offset forgone payments 

for these programs. 

2009 Average Crop Revenue Election 

Program Enrollment

Producers had until August 14, 2009, to elect to participate in ACRE for 2009 

crops. USDA released initial ACRE enrollment data in October 2009 (USDA, 

FSA, 2009). These data indicate that 128,620 farms (or 7.7 percent of FSA 

farms with base acreage enrolled in either the direct and counter-cyclical 

payments program or the ACRE program) elected to participate in ACRE 

in 2009. Farms electing ACRE are larger than average and represent 32.5 

million base acres, or 12.8 percent of total enrolled base acreage. Enrollment 

is concentrated in regions that typically grow wheat, corn, and soybeans (fi g. 

11). On farms that elected to participate in ACRE, 40 percent of their base 

acres are corn, 23 percent are soybeans, and 28 percent are wheat. 

The highest shares of base acres enrolled are in the wheat-producing States of 

Washington (43 percent) and Oklahoma (33 percent). Lower wheat prices and 

below-average yields in 2009 will trigger high ACRE payments for wheat in 

those States. (ACRE payments in those two States are projected to be capped 

at 25 percent of the State ACRE Guarantee.) Farm enrollment is much lower 

in regions where upland cotton, rice, and peanuts are grown, due to relatively 

high direct payments per base acre and greater likelihood of counter-cyclical 

payments and marketing loan benefi ts. As a result, almost three-fourths of 

the upland cotton base acres and two-thirds of the rice base acres on farms 
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that elected ACRE are located in Oklahoma where wheat plantings predominated. Farmers in Oklahoma who elected ACRE planted only 2,300 acres of 

upland cotton in 2009 even though there are 19,600 upland cotton base acres 

on farms that elected to participate in ACRE in Oklahoma. The strong likelihood of wheat ACRE payments for crop year 2009 encouraged some farmers 

to forgo 20 percent of their direct payments and all of their counter-cyclical 

payments for upland cotton and rice in return for ACRE payments.

Crop plantings on enrolled acreage are predominantly corn, soybeans, and 

wheat, which is consistent with ACRE payment and tradeoff expectations (fi g. 

12).20 Barley and sunfl owers are the next largest plantings on ACRE farms. 

The majority of corn plantings (65 percent) and soybean plantings (69 percent) 

that were on farms enrolled in ACRE are in Illinois, Iowa, Nebraska, South 

Dakota, and North Dakota. Plantings of wheat enrolled in ACRE are concentrated in Oklahoma, Washington, South Dakota, Montana, and North Dakota, 

accounting for 74 percent, with the largest being Oklahoma (32 percent).

20Crop plantings are defi ned as 

planted and considered planted for 

payment purposes and refl ected in the 

data compiled by FSA.

Figure 11

ACRE participation begins, 2009-10

ACRE vs DCP1

by base acreage2

Percent of total base

acreage enrolled in ACRE

10 million

total acres

ACRE

DCP

< 1%

1 - 5%

5 - 15%

>15%

1DCP = direct and counter-cyclical payments.

2Excludes States with less than 2 million base acres. 

Source: USDA, Economic Research Service calculations based on data from USDA, Farm Service Agency, 

and USDA, National Agricultural Statistics Service.
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We estimate the maximum potential payouts for ACRE to provide a perspective on program costs. In order to approximate potential maximum ACRE 

payments, we combine State-level enrollment data with August 2009 National 

Agricultural Statistics Service estimates of State-level yields and USDA’s 

August 2009 projections of national prices for 2009 corn, soybeans, and 

wheat. For simplicity we assume that:

• all regions experience identical percentage revenue reductions

• when a State-level trigger is met, all farm-level plantings in the State 

are triggered

• no adjustment is made for farms that planted more land than they have base

• no adjustment in payout is made to refl ect payment differentials in States 

with irrigated and nonirrigated payments

• payment rates are not capped at 25 percent of the program guarantee

• most importantly, payout is not reduced to refl ect the 20-percent reduction in 

direct payments.

With this set of simplifying and conservative assumptions, we are overestimating likely ACRE payments. Under these assumptions, ACRE payments 

would be about $440 million (table 8). Wheat is estimated to receive almost 

70 percent of the total payments. However, for scenarios with further 

revenue reductions (through either lower prices or yields than currently 

forecast), corn payments would increase signifi cantly. 

Overall, actual enrollment is somewhat lower than might have been expected 

based on the preceding analysis of revenue-based benefi ts associated with 

ACRE participation (pp. 22-24). However, as noted previously there are a 

number of factors that could have limited farmer participation, including:

• ACRE is a new and complicated program. Some producers may lack a 

full understanding of the program details needed to assess the variables 

Source: USDA, Economic Research Service calculations using data from USDA, Farm Service Agency and 

USDA, National Agricultural Statistics Service.

Figure 12

Majority of crop plantings remain outside of ACRE program, 2009-10

ACRE

 participants—32.4

million acres

ACRE nonparticipants—223.9 million acres

Corn

14

Wheat

7.4

Soybeans

9.7

Other

1.3

30%

23%

43%

4%

13%

87%

All planted acreage, ACRE-eligible crops ACRE participants’ planted acreage

(Million acres)
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that cause both State- and farm-level triggers for a farm to be eligible for a 

payment (see box, “ACRE Defi nitions,” p. 29). 

• It takes time to learn how the new ACRE program will affect individual farm operations relative to State-level triggers. Many farmers are 

not accustomed to thinking about how their revenue per planted acre 

compares to State-level revenue per planted acre. They are more familiar 

with actual revenue and national-level prices and harvested yields.

• All landowners and operators must agree to participate. If one landowner 

or operator associated with a farm operation was unwilling to elect 

ACRE, the farm was not eligible.

• Detailed records are needed to verify production of all ACRE-eligible 

crops on the farm for the previous 5 years or an ACRE county yield may 

be used. The ACRE county yield is 95 percent of the county average 

yield, which may have been signifi cantly lower than the average yield for 

the farm.

• Electing to participate in ACRE is an irreversible decision. Once a farm is 

enrolled in ACRE, it must remain in the program through 2012.

• ACRE may be attractive for some crops, but not for all crops (see discussion of a representative Southeastern cotton/corn farm, table 6, p. 20). 

• Direct payments on ACRE farms are reduced 20 percent and the marketing 

assistance loan rates for crops produced on ACRE farms are reduced 30 

percent. They are no longer eligible for counter-cyclical payments, a fact 

that likely limited participation by upland cotton producers. 

• ACRE payments are not paid until the end of the marketing year. This 

timing of the receipt of payments could affect cash fl ow and producers’ 

ability to pay bills in the short run. 

• Producers may not have valued the risk management benefi ts of ACRE 

highly. 

• Finally, producers who have not yet enrolled in ACRE will have an option 

to elect ACRE in a subsequent year. Some may have decided to see how 

the program performs this year before committing. 

Table 8

Aggregate costs for ACRE program for three crops, 20091

Revenue reductions from base case

Base case 5-percent reduction 10-percent reduction

 Million dollars

Corn 67.0 239.1 530.9

Soybeans 41.3 113.5 217.5

Wheat 331.3 389.1 451.1

Total 439.6 741.7 1,199.5

1Assumes planted acreage enrolled in ACRE and that all regions experience identical

percentage-yield reductions. 

Source: USDA, Economic Research Service calculations using data from USDA, Farm Service 

Agency, and USDA, National Agricultural Statistics Service.
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Conclusion

The ACRE program interacts with many variables at both the State and farm 

levels. Thus, the farmer’s decision to enroll is a complicated one, and the 

overall budgetary implications of the program are diffi cult to predict.

Initial 2009 enrollment data indicate that about 8 percent of farms with almost 

13 percent of eligible base acres elected to participate in ACRE. This initial 

number is less than expected given price- and yield-based analysis indicating 

that other costs to producers, namely initial learning and negotiation costs, may 

be large relative to expected ACRE payments. 

The choice to enroll involves a farmer’s best estimate of the market and localized trends. The ACRE program will be most attractive to producers whose 

crop yields are strongly correlated with State yields and to producers of crops 

with market prices not likely to fall below the marketing-loan rate. Corn, wheat, 

soybeans, and rice are the most likely crops to match those specifi cations.

An important difference between the ACRE program and 2002 Farm Act 

commodity programs is that ACRE payments can occur at much higher 

market prices than counter-cyclical payments and marketing-loan benefi ts. 

The change in prices or yield from previous years, not the absolute level, is 

the relevant factor for determining ACRE payments.

The ACRE program has potential for substantial payments in years of a large 

revenue decline. Unlike programs with legislated rates, the ACRE revenue 

target is not fi xed, but rather is based on a moving average of national prices 

and State- and farm-level yields. These moving averages adjust ACRE 

payments with current market prices and yields, which both provides some 

insulation from persistent large payments due to declines in revenue in subsequent years and refl ects changes in farm productivity.
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References

Coble, Keith. Farm-level and State-level revenue correlations, personal 

communication, March 19, 2009. 

Cooper, J. 2009a. Economic Aspects of Revenue-Based Commodity Support, 

U.S. Department of Agriculture, Economic Research Service, ERR-72, 

April 2009. Available at: www.ers.usda.gov/publications/err72/.

Cooper, J. 2009b. Payments Under the Average Crop Revenue Election 

Program—Implications for Government Costs and Producer Preferences, 

selected paper, 2009 AAEA & ACCI Joint Annual Meeting, Milwaukee, 

WI, July 26-28, 2009.

U.S. Department of Agriculture, Farm Service Agency, USDA Enrolls 255 

Million Base Acres in DCP & ACRE on 1.7 Million Farms, News Release 

No. 0519.09, October 20, 2009. Available at: http://www.fsa.usda.gov/

FSA/newsReleases?area=newsroom&subject=landing&topic=ner&newst

ype=newsrel&type=detail&item=nr_20091020_rel_0519.html/.

U.S. Department of Agriculture, Farm Service Agency, Preliminary and 

Final Average Crop Revenue Election (ACRE) Guarantee Prices for 

2009 Compared With 2009/10 Price Forecasts, August 31, 2009 update. 

Available at: http://www.fsa.usda.gov/Internet/FSA_File/acre_prices_

values_update.xls/. Accessed September 2009.

U.S. Department of Agriculture, farm bill forum producers and stakeholder 

comments. Available at: http://www.usda.gov/wps/portal/usdafarmbill?co

ntentidonly=true&contentid=2006/03/0106.xml/. Accessed January 2009.

U.S. Department of Agriculture, Offi ce of the Chief Economist. USDA 

Agricultural Baseline Projections to 2018, Staff Report OCE-2009-1, 

February 2009.

U.S. Department of Agriculture, USDA 2007 Farm Bill Proposals, January 

2007.

Young, Edwin, David Skully, Paul Westcott, and Linwood Hoffman. Economic 

Analysis of Base Acre and Payment Yield Designations Under the 2002 

U.S. Farm Act, U.S. Department of Agriculture, Economic Research 

Service, ERR-12, September 2005. Available at: www.ers.usda.gov/

publications/err12/. 

Zulauf, Carl R., Michael R. Dicks, and Jeffrey D. Vitale. “ACRE (Average 

Crop Revenue Election) Farm Program: Provisions, Policy Background, 

and Farm Decision Analysis,” Choices, Vol. 23, No. 3 (3rd Quarter 2008): 

29-35. 

Zulauf, Carl. Farm-level and State-level ACRE triggers, personal communication, 

April 2, 2009. 
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Appendix A—Program Details

Participants in the ACRE program are eligible for State-based revenue coverage 

that refl ects recent yields and recent national prices for designated program 

crops. ACRE payments can be triggered by a decrease in national prices 

or reported State yields (see fi g. 4). Enrolled producers will receive ACRE 

payments when both State-level and farm-level payment triggers are met (see 

box, “ACRE Defi nitions,” p. 29). 

Payment Calculations

Appendix table 1 provides a 1-year/1-crop hypothetical ACRE payment 

calculation. We assume the producer planted 100 acres of corn and has a 0.96 

farm productivity ratio. On this hypothetical farm, planted acres = total tillable acres = base acres and the corn actual State revenue is below the corn 

State ACRE Guarantee. The ACRE guarantee price and benchmark State 

and farm yields are assumptions used to illustrate program operation. Due 

to relatively low prices and yields, the corn producer’s actual farm revenue 

is also less than the farm ACRE benchmark revenue. The combined State 

and farm revenue outcomes trigger a corn ACRE payment for the producer. 

In this example, the 2010 corn ACRE payment is $2,879 ($28.79 per planted 

acre). (For a more comprehensive discussion using a multi-crop, multi-year 

ACRE scenario analysis that explores different price and yield outcomes, see 

“Opportunity Costs and Payment Scenarios” chapter, pp. 5-13.) 

The 1-year/1-crop example illustrates the intersection between the ACRE 

program and crop insurance. Producer-paid crop insurance premiums are a 

Appendix table 1

Hypothetical ACRE payment calculation for 2010 corn1

State calculations Farm calculations

State ACRE Guarantee (SAG) Farm benchmark revenue

ACRE guarantee price $5.18 ACRE guarantee price $5.18 

Benchmark State yield/planted acre 166 Benchmark farm yield/planted acre 159

 Crop insurance premium/acre $30 

State ACRE guarantee $774 Farm ACRE benchmark revenue $854 

State actual revenue Farm actual revenue

ACRE price $4.50 ACRE price $4.50 

Actual State yield/planted acre 164 Actual farm yield/planted acre 150

Actual State revenue $738 Actual farm revenue $675 

1. Is actual State revenue < State ACRE guarantee? Yes 2. Is actual farm revenue < farm ACRE benchmark revenue? Yes

 Producer IS eligible for 2010 corn ACRE payments.

ACRE payment calculation

ACRE payment rate/acre ACRE payment

1: SAG minus actual $36 ACRE payment rate/acre $36

2: 25 percent SAG $193 Payment acreage (100 x 0.833) 83.3

Rate = lesser of 1 or 2 $36 Farm productivity ratio 0.96

 Total ACRE payment to producer $2,879

1Calculated values may differ from those shown in the table due to rounding error. 

Source: USDA, Economic Research Service calculations.
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ACRE payments are made to producers if a producer meets specifi c criteria at the State and farm level. Payment 

criteria and payment amounts are determined and calculated for each eligible commodity. Yield references within the 

ACRE program are per planted acre as reported, rather than per harvested acre. Calculations include:

State-level payment criterion

The Actual State Revenue must fall below the State ACRE Guarantee (SAG). These components are calculated 

as follows:

Actual State revenue = State yield per planted acre x ACRE price 

State ACRE Guarantee = 90 percent x (benchmark State yield x ACRE guarantee price)

–The benchmark State yield equals the State Olympic average1 yield per planted acre for 

the 5 previous crop years.

–The ACRE guarantee price equals the average national price for the 2 previous crop 

years 

–The ACRE price is determined by USDA’s Farm Service Agency, using National 

Agricultural Statistics Service prices and equals greater of:

• the national average commodity market price received by producers during 

the 12-month marketing year; or

• the reduced marketing assistance commodity loan rate.

Farm-level payment criterion

The actual farm revenue must fall below the farm ACRE benchmark revenue. The components are calculated as 

follows:

Actual farm revenue equals the reported commodity farm yield x ACRE price

Farm ACRE benchmark revenue equals (the 5-year Olympic average farm yield x ACRE guarantee 

price) + crop insurance premium (for the current year)

When both the State- and farm-level payment criteria are met, ACRE payments are calculated as discussed in 

the beginning of this chapter. The ACRE payment rate equals the difference between the State ACRE Guarantee 

and actual State revenue or 25 percent of the State ACRE Guarantee, whichever is less. This number is then 

multiplied by 83.3 percent (or 85 percent for 2012 crop year) and the farm productivity ratio.

Farm productivity ratio = Farm 5-year Olympic average crop yield per planted acre divided by the 

ACRE benchmark State yield 

ACRE payment rate = [lesser of: (SAG-actual State revenue) or (0.25*SAG)] x 0.833 (0.85 for 

2012) x farm productivity ratio

ACRE Defi nitions

1“5-year Olympic average” refers to the average yield over the previous 5 years, omitting the highest and lowest yields.
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component of farm ACRE benchmark revenue. Inclusion of the crop insurance premium in the farm ACRE benchmark revenue calculation increases the 

likelihood of farm-level payments when the State-level criterion is met. This 

provision will have a greater impact in high-risk production areas (and for highrisk crops) because crop insurance premiums are larger for those locales and 

crops. High-risk production areas are geographic areas where crop yields vary 

more from year to year than in other parts of the United States, primarily due 

to unpredictable weather conditions such as in the Plains States.

Key Payment Details

Cap on State ACRE Guarantee fl uctuations: The State ACRE Guarantee 

(SAG) for a crop year cannot change by more than 10 percent from the 

previous crop year SAG. For example, the 2010 SAG in appendix table 1 

is $774. Given the 10-percent variation restriction, the 2011 SAG will fall 

between $851 and $697, regardless of a larger change in prices or yields. 

Since the ACRE program starts with the 2009 crop year, this provision fi rst 

applies for the 2010 crop year.

Irrigated land considerations: Separate SAGs will be calculated for irrigated and nonirrigated planted acreage within the State if each irrigated and 

nonirrigated planted acreage accounts for 25 percent or more of the State’s 

eligible planted crop acreage. For example, if there is a 60/40 split across 

irrigated and nonirrigated planted corn acreage in the State, separate irrigated 

and nonirrigated SAGs will be calculated for the State.

Payment acreage restrictions: ACRE payments are calculated using planted 

acres for each commodity. However, payment acreage is limited to a farm’s 

base acreage for all eligible commodities on the farm. Payments are limited 

to 83.3 percent of planted acres in 2009-11 and 85 percent of planted acres in 

2012. If 83.3 percent (85 percent in 2012) of total acres planted to all eligible 

commodities on a farm exceed the farm’s total base acreage, producers must 

designate which planted acres will be considered for payments in accordance 

with Farm Service Agency (FSA) reporting deadlines.

 For example, a corn producer has enrolled an FSA farm composed of 

150 total base acres (100 corn base acres and 50 oat base acres) in the 

ACRE program. USDA’s Farm Service Agency maintains farm records 

based on smaller administrative units (“FSA farms”) consisting of their 

respective owners and operators. (See box, “Enrolling a “Farm Service 

Agency (FSA) Farm” in ACRE.”) If the producer plants 180 acres or 

more to corn, up to 150 acres (180 x 0.833 = 150) on the farm can be 

designated for potential corn ACRE payments. 

Payment limitations: Enrolled producers are subject to ACRE-specifi c 

payment limitations consisting of an ACRE and direct-payment limitation that applies to total payments received by each enrolled person. ACRE 

payments are limited to $65,000 per person plus the 20-percent reduction in 

direct payments, which varies by base acreage. Direct payments are limited 

to $40,000 per person minus the 20-percent reduction in direct payments. 
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The ACRE program differs from other commodity programs in fi ve key areas 

(see box, “2002 Farm Act Commodity Programs Continue in 2009-12, p. 33, 

for details on those programs).

1) The ACRE program gives eligible farmers a choice of commodity 

programs, but producers who enroll will need to weigh costs and 

benefi ts across options. Enrolled producers are eligible for ACRE 

payments, direct payments, and marketing-loan benefi ts. As a condition for participation in ACRE, direct payments are reduced by 20 

percent and marketing loan rates for commodities eligible for ACRE 

payments are reduced by 30 percent. After electing ACRE, the farm is 

no longer eligible to receive counter-cyclical payments. Producers who 

elect not to participate in ACRE remain eligible for 2002 Farm Act 

commodity programs. The ACRE program will tend to complement 

producers’ crop insurance selections (Zulauf, Dicks, and Vitale, 2008). 

ACRE enrollment tradeoffs, particularly for marketing-loan benefi ts,

will vary greatly among commodities, assuming USDA long-term 

price projections. Important producer-specific ACRE election costs, 

including learning costs associated with a new program option and 

negotiation costs between landowners and operators, will also carry 

weight in the ACRE election decision and could limit participation.

Many agricultural producers farm combinations of owned and rented land. 

Together, the combinations comprise the total “farm operation.” Land is 

frequently rented from multiple landowners. If all ownership combinations were 

combined into a single unit, it would be diffi cult administratively to track program 

parameters such as base acres and program yields for the farm and for the 

landowner over time. Thus USDA’s Farm Service Agency maintains farm records 

based on smaller administrative units (farms) consisting of varying groups of 

owners and operators. Participation in USDA commodity programs applies to the 

unit of owners, operators, landlords, tenants, or sharecroppers.

A farmer may operate on a number of “FSA farms.” For example, Farmer Jones 

farms 380 acres of land on three FSA farms: 

• Farm A consists of 75 acres of land leased by Farmer Jones but owned by 

brothers Bill and Jim Smith.

• Farm B consists of 50 acres owned by Farmer Jones, 25 acres leased from Mrs. 

Applebee, and 30 acres leased from John Applebee, Mrs. Applebee’s son.

• Farm C consists of 200 acres of land owned by Farmer Jones.

Each farm must be enrolled separately with FSA. When electing and annually 

enrolling in the ACRE program, farm operators such as Farmer Jones may treat 

each farm separately, enrolling one farm but not necessarily the other farms. All 

owners, operators, landlords, tenants, and sharecroppers must agree in writing 

to elect to participate in ACRE. Thus, it is likely that some farmers will not 

enroll their entire farm operation in ACRE. Farmers who elect ACRE are able to 

diversify their farm program portfolio by enrolling only a portion of their FSA 

farms in ACRE.

Enrolling a “Farm Service Agency (FSA) 

 Farm” in ACRE
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2) ACRE enrollment is optional. The producer may enroll in ACRE in 

any year from 2009-12, but once a farmer elects to participate in the 

overall ACRE program, the farm remains in the program through 

2012, the ending year of the 2008 Farm Act. USDA extended the 

initial (2009) ACRE election and enrollment window from June 1 to 

August 14 to give producers more time to make an informed decision 

between remaining in the 2002 Farm Act programs or participating in 

ACRE for crop years 2009 through 2012.1 If land is rented, all landowners and operators must agree to elect ACRE. To be eligible for 

ACRE payments, producers elect ACRE once, then annually enroll the 

farm in the program (see box, “Enrolling a ‘Farm Service Agency 

(FSA) Farm’ in ACRE” for clarifi cation). 

3) ACRE payments are based on a moving average of market revenues (national prices and yields) instead of fi xed target prices.

State- and farm-level ACRE benchmark revenues for various commodities are moving averages based on national market prices and reported 

State and farm yields. Payments are made when benchmark revenues 

fall below actual revenues. If there is a signifi cant period of falling 

(rising) prices, the State ACRE Guarantee will adjust downward 

(upward). In addition, the likelihood of an ACRE payment will adjust 

accordingly.

4) ACRE has a dual-payment trigger—both State- and farm-level 

declines are required for an ACRE payment. ACRE payments 

are based on State- and farm-level benchmark revenues for each 

commodity. The ACRE program provides benefi ts only if BOTH the 

State and the producer experience a revenue loss where actual revenues 

fall below benchmark revenues, by commodity and by farm. ACRE 

payments are triggered at the State level when the actual State revenue 

has fallen below 90 percent of the moving yield and price average. 

When the State-level payment criterion is met, it is likely that the 

ACRE actual farm revenue for the commodity also will fall below the 

farm ACRE benchmark revenue, and thereby meet the farm-level criterion for revenue loss.

5) ACRE payments are based on planted, not base, acres. Payments 

from counter-cyclical and direct payment programs use historical 

base acres. ACRE payments are based on 83.3 percent (85 percent in 

2012) of planted acres of a commodity. Total ACRE payment acres 

cannot exceed total base acres on the farm. If ACRE payment acres 

exceed base acres, the farmer must designate the plantings eligible for 

payments each year by September 30.

1USDA released ACRE enrollment 

data for 2009 on October 20, 2009. See 

pp. 22-25for a discussion.
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Direct payments are made based on historical acreages (base acres) and 

yields (program yields). Direct payment rates, which vary from commodity to 

commodity, play a role in the calculation of other commodity program payments. 

Direct payments are similar to the production fl exibility contract (PFC) payments 

that were made available in 1996-2001 for wheat, feed grains, rice, and upland 

cotton. The 2002 Farm Act replaced PFC payments with direct payments and 

added oilseeds to the list of eligible crops. The 2008 Farm Act leaves direct 

payment rates unchanged, but reduces eligible direct payment acres from 85 

percent of base acres to 83.3 percent for crop years 2009-11.

The nonrecourse marketing assistance loan program provides commoditysecured loans to producers for a specifi ed period of time (typically 9 months), 

after which producers must either repay the loan and accrued interest (if market 

prices are above the loan rate) or transfer ownership of the commodity pledged 

as collateral to the Commodity Credit Corporation as full settlement of the loan, 

without penalty. Alternatively, at any time during the loan period, if the loan 

repayment rate (posted county price or prevailing world market price) is below 

the loan rate plus interest, the farmer may repay the loan at that lower rate, thus 

obtaining a marketing loan gain.

Instead of taking out a commodity loan, eligible farmers may choose to receive 

marketing loan benefi ts through loan defi ciency payments (LDP) when market 

prices are lower than commodity loan rates. The LDP option allows the producer 

to receive the benefi ts of the marketing loan program without having to take 

out and subsequently repay a commodity loan. The LDP rate is the amount by 

which the loan rate exceeds the loan repayment rate and, thus, is equivalent to the 

marketing loan gain that could be obtained for commodities under loan.

The 2008 Farm Act continues commodity loan programs for wheat, corn, grain 

sorghum, barley, oats, long- and medium-grain rice, soybeans, other oilseeds, 

upland cotton, extra-long staple cotton, peanuts, wool, mohair, honey, small and 

large chickpeas, lentils, and dry peas. The loan rates, specifi ed in the legislation, 

are unchanged for crop year 2008, but will increase for wheat, barley, oats, other 

oilseeds, and wool for crop years 2010-12. Loan rates for dry peas and lentils will 

be lowered for crop years 2009-12. 

Counter-cyclical payments (CCPs) were established under the 2002 Farm Act 

and were initially available for wheat, corn, grain sorghum, barley, oats, rice, 

upland cotton, soybeans, other oilseeds, and peanuts. The 2008 Act continues 

CCPs for these crops and adds dry peas, lentils, and chickpeas. The 2008 Act does 

not change the target prices through crop year 2009 for any commodity except 

upland cotton. For upland cotton, the target price is lowered to 71.25 cents per 

pound for crop years 2008-12. Target prices increase for wheat, grain sorghum, 

barley, oats, soybeans, and other oilseeds for crop years 2010-12. The amount of 

historical production to which the CCP rate is applied will remain at 85 percent 

for crop years 2008-12. 

For additional program details, see Farm and Commodity Policy Briefi ng Room, 

Program Provisions at:

www.ers.usda.gov/Briefi ng/FarmPolicy/ProgramProvisions.htm/.

2002 Farm Act Commodity Programs 

 Continue in 2009-12
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Appendix B

Scenario A: State-level yield shocks (national average market prices unaffected)1

State-level scenario A: 

State-level yield corn shocks

in 2010 and 2011

State-level scenario A: 

State-level yield cotton shocks

in 2010 and 2011

State assumptions Formula 2009 2010 2011 2012 2009 2010 2011 2012

Actual State revenue (per acre):

ACRE price

(actual avg. mkt price 

per bu/lb or loan rate, 

whichever is higher) $5.30 $5.35 $5.40 $5.23 $0.62 $0.60 $0.59 $0.58

Actual national average 

 price per bu/lb $5.30 $5.35 $5.40 $5.23 $0.62 $0.60 $0.59 $0.58

Reduced loan rate

(70 percent marketing 

assistance loan rate) $1.37 $1.37 $1.37 $1.37 $0.36 $0.36 $0.36 $0.36 

Actual yield/planted acre (bu/lb per planted acre) 165 105 98 172 900 500 600 964

Actual State revenue

(=price*yield/planted

(bu/lb per planted acre) $874.50 $561.75 $529.20 $899.56 $558.00 $300.00 $354.00 $559.12 

State ACRE guarantee (SAG) (per acre:

ACRE guarantee price (2-yr moving national 

average price-based

on the prior 2 years) $4.88 $5.28 $5.33 $5.38 $0.57 $0.59 $0.61 $0.60

Guarantee yield/acre (5-yr Olympic average) 164 163 163 144 947 920 904 817

State ACRE Guarantee2

(=price*yield/planted 

acre*.9) $719.55 $772.26 $779.58 $701.10 $483.68 $490.59 $496.30 $446.67

ACRE Payment Trigger #1: 

Is actual State revenue less than State ACRE guarantee? No Yes Yes No No Yes Yes No

Corn ACRE payment rate

1: SAG minus actual $0 $211 $250 $0 $0 $191 $142 $0

2: 25 percent SAG $179.89 $193.07 $194.90 $175.28 $120.92 $122.65 $124.07 $111.67

Rate= lesser of 1 or 2 (per acre rate) $0 $193.07 $194.90 $0 $0 $122.65 $124.07 $0

Farm-level scenario A:

State-level corn yield shocks

in 2010 and 2011

Farm-level scenario A: 

State-level upland cotton yield

shocks in 2010 and 2011

Farm assumptions Formula 2009 2010 2011 2012 2009 2010 2011 2012

Actual farm revenue (per acre):

Planted acreage 100 100 100 100 100 100 100 100

Actual FARM yield/planted acre 165 171 150 172 945 850 950 960

ACRE price $5.30 $5.35 $5.40 $5.23 $0.62 $0.60 $0.59 $0.58

Actual farm revenue 

 (per acre) $872.75 $914.85 $810.00 $899.56 $585.90 $510.00 $560.50 $556.80

Farm ACRE benchmark revenue (per acre):

ACRE guarantee price (2-yr moving national 

average price-based

on the prior 2 years) $4.88 $5.28 $5.33 $5.38 $0.57 $0.59 $0.61 $0.60

Benchmark farm yield/acre (5-yr Olympic average) 164 162 165 165 938 929 913 946

Crop insurance premium 30 30 30 30 24 24 24 24

Farm ACRE benchmark 

 revenue $827.90 $886.35 $908.64 $916.89 $556.05 $574.31 $580.91 $586.77 

ACRE Payment Trigger #2:

Is actual farm revenue less than farm ACRE benchmark 

revenue?: No No Yes Yes No Yes Yes Yes

Does this producer receive an ACRE payment? No No Yes No No Yes Yes No

—Continued
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Appendix B

Scenario A: State-level yield shocks (national average market prices unaffected)1—Continued

Farm-level scenario A: 

State-level corn yield shocks

in 2010 and 2011

Farm-level scenario A: 

State-level upland cotton yield

in 2010 and 2011

Farm assumptions Formula 2009 2010 2011 2012 2009 2010 2011 2012

Corn ACRE payment Cotton ACRE payment 

ACRE payment rate $0 $193.07 $194.90 $0 $0 $122.65 $124.07 $0

Payment acreage 83.3 83.3 83.3 85 83.3 83.3 83.3 85

Farm productivity ratio 0.998 0.998 1.014 1.146 0.990 1.010 1.010 1.157

Farm ACRE payment $0 $0 $16,467.90 $0 $0 $10,314.26 $10,437.80 $0

Corn ACRE participation tradeoffs Cotton ACRE participation tradeoffs

Direct payments (DPs)

Marginal DP rate $0.060 $0.060 $0.060 $0.060 $0.013 $0.013 $0.013 $0.013 

DP payment acres 83.3 83.3 83.3 85 83.3 83.3 83.3 85

DP yield 121 121 121 121 650 650 650 650

Marginal DP tradeoff $604.76 $604.76 $604.76 $617.10 $722.29 $722.29 $722.29 $737.04 

Counter-cyclical payments (CCPs)

CCP rate

(Target rate-DP 

rate-national avg. 

market price) $0 $0 $0 $0 $0.0258 $0.0458 $0.0558 $0.0658

CCP base acres X .85 85 85 85 85 85 85 85 85

CCP yields 156 156 156 156 825 825 825 825

Total CCPs $0 $0 $0 $0 1,809.23 $3,211.73 $3,912.98 $4,614.23

Marketing loan benefi ts (MLBs)

At the assumed price levels, it is unlikely that marketing loan benefi ts will be available for corn. The 

likelihood of marketing loan benefi ts for cotton is less clear. If marketing loan benefi ts are available 

for either crop, the maximum loan rate for enrolled producers is $1.37 for corn and $0.3634 for 

cotton.

Net ACRE monetary benefi t $(604.76) $(604.76) $15,863.14 $(617.10) $(2,531.52) $6,380.24 $5,802.53 $(5,361.27)

1Calculated values may differ from those shown in the table due to rounding error. 

2SAG is limited to 90 percent of the prior year’s SAG.

Source: USDA, Economic Research Service calculations.
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Appendix C

Scenario B: Falling market price scenario1

State-level scenario B: 

Expect falling corn prices

State-level scenario B: 

Expect falling cotton prices

State assumptions Formula 2009 2010 2011 2012 2009 2010 2011 2012

Actual State revenue (per acre):

ACRE price

(actual avg. mkt price 

per bu/lb or loan rate, 

whichever is higher) $5.05 $4.50 $4.00 $3.75 $0.62 $0.58 $0.52 $0.47

Actual national average 

 price per bu/lb $5.05 $4.50 $4.00 $3.75$0.62 $0.58 $0.52 $0.47

Reduced loan rate

(70 percent marketing 

assistance loan rate) $1.37 $1.37 $1.37 $1.37 $0.36 $0.36 $0.36 $0.36

Actual yield/planted acre (bu/lb per planted acre) 165 168 172 170 970 964 975 978

Actual State revenue

(=price*yield/planted

(bu/lb per planted acre) $833.25 $756.00 $688.00 $637.50 $601.40 $559.12 $507.00 $461.54

State ACRE guarantee (SAG) (per acre:

ACRE guarantee price (2-yr moving national 

average price-based

on the prior 2 years) $4.88 $5.15 $4.78 $4.25 $0.58 $0.59 $0.60 $0.54

Guarantee yield/acre (5-yr Olympic average) 164 163 165 167 947 943 962 970

State ACRE Guarantee2

(=price*yield/planted 

acre*.9) $719.55 $753.96 $709.09 $640.05 $493.48 $503.03 $519.48 $471.26

ACRE Payment Trigger #1: 

Is actual State revenue less than State ACRE guarantee? No No Yes Yes No No Yes Yes

Corn ACRE payment rate

1: SAG minus actual $0 $0 $21.09 $2.55 $0 $0 $12.48 $9.72

2: 25 percent SAG $179.89 $188.49 $177.27 $160.01 $123.37 $125.76 $129.87 $117.81

Rate= lesser of 1 or 2 (per acre rate) $0 $0 $21.09 $2.55 $0 $0 $12.48 $9.72

Farm-level scenario B:

Expect falling corn prices

Farm-level scenario B: 

Expect falling cotton prices

Farm assumptions Formula 2009 2010 2011 2012 2009 2010 2011 2012

Actual farm revenue (per acre):

Planted acreage 100 100 100 100 100 100 100 100

Actual FARM yield/planted acre 178 164 170 169 989 1,000 1,020 1,010

ACRE price $5.05 $4.50 $4.00 $3.75 $0.62 $0.58 $0.52 $0.47

Actual farm revenue 

 (per acre) $898.90 $738.00 $680.00 $633.75 $613.18 $580.00 $530.40 $474.70

Farm ACRE benchmark revenue (per acre):

ACRE guarantee price (2-yr moving national 

average price-based

on the prior 2 years) $4.88 $5.15 $4.78 $4.25 $0.58 $0.59 $0.58 $0.51

Benchmark farm yield/acre (5-yr Olympic average) 164 164 165 168 938 938 968 987

Crop insurance premium 30 30 30 30 24 24 24 24

Farm ACRE benchmark 

 revenue $827.90 $872.91 $816.82 $742.10 $566.83 $579.49 $585.18 $527.23

ACRE Payment Trigger #2:

Is actual farm revenue less than farm ACRE benchmark 

revenue?: No Yes Yes Yes No No Yes Yes

Does this producer receive an ACRE payment? No No Yes Yes No No Yes Yes

—Continued
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Appendix C

Scenario B: Falling market price scenario1—Continued

State-level scenario B:

Expect falling corn prices

State-level scenario B: 

Expect falling cotton prices

Farm assumptions Formula 2009 2010 2011 2012 2009 2010 2011 2012

Corn ACRE payment Cotton ACRE payment 

ACRE payment rate $0 $0 $21.09 $2.55 $0 $0 $12.48 $9.72

Payment acreage 83.3 83.3 83.3 85 83.3 83.3 83.3 85

Farm Productivity ratio 0.998 1.006 0.999 1.001 0.990 0.994 1.006 1.018

Farm ACRE payment $0 $0 $1,754.24 $217.04 $0 $0 $1,045.59 $840.57

Corn ACRE participation tradeoffs Cotton ACRE participation tradeoffs

Direct payments (DPs)

Marginal DP rate $0.060 $0.060 $0.060 $0.060 $0.013 $0.013 $0.013 $0.013

DP payment acres 83.3 83.3 83.3 85 83.3 83.3 83.3 85

DP yield 121 121 121 121 650 650 650 650

Marginal DP tradeoff $604.76 $604.76 $604.76 $617.10 $722.29 $722.29 $722.29 $737.04

Counter-cyclical payments (CCPs)

CCP rate

(Target rate-DP 

rate-national avg. 

market price) $0 $0 $0 $0 $0.0258 $0.1058 $0.1258 $0.1258

CCP base acres X .85 85 85 85 85 85 85 85 85

CCP yields 156 156 156 156 825 825 825 825

Total CCPs $0 $0 $0 $0$1,809.23 $7,419.23 $8,821.73 $8,821.73

Marketing loan benefi ts (MLBs)

At the assumed price levels, it is unlikely that marketing loan benefi ts will be available for corn. 

The likelihood of marketing loan benefi ts for cotton is less clear. If marketing loan benefi ts are 

available for either crop, the maximum loan rate for enrolled producers is $1.37 for corn and 

$0.3634 for cotton. 

Net ACRE monetary benefi t $(604.76) $(604.76) $1,149.48 $(400.06) $(2,531.52) $(8,141.52) $(8,498.43) $(8,718.20)

1Calculated values may differ from those shown in the table due to rounding error. 

2SAG is limited to 90 percent of the prior year’s SAG.

Source: USDA, Economic Research Service calculations.