USDA won't release CRP acres penalty free

Web exclusive posted August 1, 2008 at 10:50 a.m. CST

Corn and soybean markets for 2009 contracts gained some support July 29 when the USDA announced it won't allow land to be released penalty-free from the Conservation Reserve Program to increase the acres available for seeding the 2009 crop.

Pointing to the drop in corn and soybean prices after record highs set last month and good growing weather, U.S. Secretary of Agriculture Ed Schafer said, "even with the damage and delays in planting caused by the floods, this year's corn crop is on track to be the second largest on record with an anticipated harvest of almost 79 million acres."

Another factor considered by the USDA is that a pending drop in acres already is built into the new Farm Bill and existing contracts. Schafer said the 2008 Farm Bill lowered the cap on total number of acres allowed in the CRP program from 39.2 million acres to 32 million acres. "As a result, the 34.7 million acres now enrolled in the program will have to shrink," he said. "And looking out over the next few years, we have 1.1 million CRP acres scheduled to expire on Sept. 30 of this year, and that number jumps to 3.8 million acres on Sept. 30, 2009, and then 4.4 million acres on Sept. 30, 2010. So large blocks of land will be available for other uses, if land owners choose to pursue them."

DTN agriculture reporter Chris Clayton commented in a recent webinar that the USDA's decision on doing an early-out program for CRP acres would be less likely after a court decision in Seattle regarding USDA's proposed haying and grazing program. "The judge was critical of USDA," he said. "They didn't do an environmental impact statement on the haying and grazing changes."

Clayton highlighted other changes in conservation programs in the 2008 Farm Bill. Understanding that acres will be coming out of CRP, Congress retooled an existing program, the Conservation Security Program, and renamed it as the Conservation Stewardship Program. The working lands program is authorized to enroll 13 million to 80 million acres per year. "It will effectively overtake CRP as the biggest conservation program at USDA," Clayton said. Farmers will receive payments for environmental practices such as leaving buffer strips to protect wetlands and rivers, erosion control practices and tillage practices. Unlike CRP, the CSP program will allow continuous signups. Rules for CSP are not likely to be out until late this winter, Clayton predicted.