Spring 2006, Vol. 12 No. 2
In this issue...
CRP Acreage on the Horizon
Chad E. Hart
The Conservation Reserve Program (CRP) is a voluntary environmental program for agricultural producers aimed at protecting environmentally sensitive land, improving water quality, limiting soil erosion, and promoting wildlife habitat. The CRP has existed since 1985 and has protected at least 30 million acres nationwide each year since 1990, pulling some acreage out of crop production. Currently, roughly 35.9 million acres are enrolled in the CRP. Producers bid to participate in the CRP and bids are evaluated based on the environmental benefits and financial costs of the CRP contracts. Acreage bid into the CRP program is under contract for a set number of years and is planted to "resource-conserving vegetative covers," such as native grasses and trees.
Figure 1 shows when current CRP acres were last enrolled. The largest enrollment year for these CRP acres occurred in 1998, when nearly 18.5 million acres entered or re-entered the program. Many of these acres could possibly come back into crop production in the next few years. In 2006, less than 2 percent of all CRP acreage could come out of the program. But as Figure 2 shows, a majority of CRP acres enrolled in 1998, 16 million, could come out of the program in 2007. In Iowa, over 25 percent of all CRP land could be put into production. That amounts to over 500,000 acres.
The release of these acres from the CRP could have a tremendous impact on crop production and profitability. Figure 3 and Figure 4 show where current CRP acreage and where the acreage eligible to leave CRP in 2007 are located throughout the country. While the Great Plains has most of the CRP land, areas in the major producing regions of corn, soybeans, and cotton have also participated in the program. The acreage that could be released in 2007 is throughout the major wheat-producing regions, the western and southern Corn Belt, the Texas panhandle, Alabama, and Mississippi. Strong crop prices, especially for wheat, cotton, corn, and/or soybeans, could pull acreage out of the CRP and into production. Table 1 shows a breakdown of the U.S. acreage eligible to exit CRP in 2007 by the major crop produced in each county. Wheat is the major crop alternative for over half of the acreage, 9.3 million acres. If wheat prices are strong going into the fall of 2007, it is conceivable that many of the 9.3 million acres could come back into wheat production. Soybeans, corn, and cotton also have over 1 million acres currently in CRP that could emerge by the 2008 crop year.
Realizing this, USDA has begun notifying participating producers about their eligibility to extend their current CRP contracts for 2 or 5 years or to re-enroll in the CRP under a 10- to 15-year contract. Also, USDA has opened a general CRP sign-up this spring to maintain acreage in the program. So while USDA is working on maintaining acreage in the CRP, it remains to be seen how successful this initiative will be and how much acreage will return to crop production.