Economic Research Report No. (ERR-101) 34 pp

September 2010

ACRE Program Payments and Risk Reduction: An Analysis Based on Simulations of Crop Revenue Variability

Crop revenue variability, which differs across crops and their growing regions and the geographic levels at which revenue is measured, is the focus of the Average Crop Revenue Election, an agricultural commodity program that was first available to producers in 2009. Using an empirically-based simulation model of an extensive set of representative farm acres of corn, soybeans, wheat and cotton, we analyze how ACRE payments would vary under different guarantee price and expected market price scenarios and how ACRE payments and risk reduction would be distributed across crops and regions.

Keywords: crop revenue variability, Average Crop Revenue Election, ACRE, farm risk management

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