Average Crop Revenue Election (ACRE) Decision Tool

Extension Lead(s)
(name, position, counties served, contact information)

William Edwards, Extension Economist (state specialist)
478  Heady Hall, Iowa State University, Ames, IA  50011
515-294-6161, wedwards@iastate.edu

Your Position

­­­­­_____Field
__X___Campus
_____Both

POW # and Team

 ­­­­­_____100 Corn and Soybean Production and Protection
­­­­­_____ 110 Dairy
­­­­­___X__ 120 Farm and Business Management
­­­­­_____ 130 Horticulture: Commercial and Consumer
­­­­­_____ 140 Iowa Beef Center
­­­­­_____ 150 Iowa Pork Industry Center
­­­­­_____ 160 Natural Resources and Stewardship
_____170 Pesticide Applicator Training
_____180 Other ANR Programs

ANR Priority (select all that apply)

­­­­­__X___Global Food Security and Hunger
­­­­­_____Regional Food Systems
­­­­­_____Natural Resources & Environmental Stewardship
­­­­­_____Food Safety
­­­­­_____Sustainable Energy – Biofuels & Biobased Products
­­­­­_____Climate Change
­­­­­_____Other

Title of Success Story

Average Crop Revenue Election (ACRE) Decision Tool

Continuing Story

___X__ No                _____  Yes (If continuing, what story?)

Knowledge Areas: (USDA categories)

Economics of Agricultural Production and Farm Management.

Desired Changes
Learning
Actions
Conditions

Iowa farmers will have a simple and convenient to use to analyze the potential results from enrolling or not enrolling in ACRE, over the next 4 years, on their own farms.

RELEVANCE
(Why is it important to address this issue with education?  What are the desired changes?)

A year ago Iowa farmers were faced with the decision of whether to continue with the traditional version of the Direct and Counter-cyclical commodity risk program (DCP) from the Farm Service Agency (FSA), or to enroll in a new option called the Average Crop Revenue Election (ACRE).   The new program offered a chance to put a floor under gross revenue instead of price, but also required producers to give up some of the benefits of the old program.

RESPONSE
(Outputs: activities, numbers reached, publications, products)

I developed a decision tool file (Excel spreadsheet) that showed the potential costs and returns to enrolling in the ACRE program over the next 4 years, under a random distribution of yield and price scenarios.  The tool allowed farmers to input values corresponding to each individual FSA farm unit under their management.  The decision tool was posted on the ISU Ag Decision Maker website so that it would be freely accessible to anyone.  It was available approximately 9 months before FSA made their analysis tool available to the public.

RESULTS (Outcomes:  specific changes that occurred in Learning, Actions, Conditions; how outcomes were measured)

Based on a follow-up random mail survey of 3,384 Iowa farmers (356 usable responses) who had enrolled in previous FSA commodity programs, 24% used an electronic spreadsheet to analyze their ACRE enrollment decision.  13% used the ISU Extension decision tool and 11%  used other electronic decision tools).   The producers who used the ISUE  tool enrolled an average of 40% of the FSA farm units they operated in 2009 into the ACRE program.  Producers who used a spreadsheet tool from another source enrolled 36% of their farms, and the producers who did not do a spreadsheet analysis enrolled only 15% of their farms in ACRE.  This indicates a significant behavior change related to the use of an analysis tool developed by ISU Extension.

Public Value (now or future)
(Impact:  Who benefits beyond participants and how?  What conditions changed?)

The long-term results from enrolling in the ACRE program will not be known until 2012, but farms that are enrolled have a relatively high safety net for their gross revenue, at a small annual cost.  In the event of a severe decline in crop yields and/or prices producers will be able to maintain their incomes and continue to support farm input suppliers, lending institutions and ag processors in their communities.

Major Partners or Collaborators

Farm Service Agency

Where story took place
(Region, campus, multi-regional)

Statewide

Fiscal Year

2010

Multi-state or Integrated (Ext + Research)

Extension + Research

Funding Source

Iowa Ag and Home Ec Experiment Station

Keywords

Farm Bill, Risk, ACRE, Financial,

 

Page last updated: July 5, 2011
Page maintained by Julie Honeick, jhoneick@iastate.edu