Given the latest CRP conversation, this week’s post takes an updated look at CRP trends and walks through a simple thought experiment to provide insights on what a reduction in U.S. crop production acres might look like. Continue reading →
In May the USDA provided an update on the Conservation Reserve Program (CRP). Media headlines from this announcement were something along the lines of “USDA adds more than 800,000 acres” to program. After digging into the data a bit more, it seemed an alternative headline might be: “CRP Program Declines Continues; 900,000 fewer acres in 2017.”
While we have covered the CRP program trend towards fewer acres in earlier posts (here and here), we continue to find the program’s contraction a bit fascinating; especially given the current financial headwinds for production agriculture. Furthermore, it seems that most are unaware of this policy trend. This week we re-visiting the CRP program and evaluating why efforts to ‘Make CRP Great Again’ may soon be underway.
The biggest take-away from the USDA’s March projections of 2016 crop acres was, at a high-level, “too many” acres. While this was especially true for corn, it applies more broadly as well. Given slower growth in demand for agricultural commodities and several years of above-trend yields, the U.S. and global commodity markets are signaling that inventories are abundant. In fact, the market has pivoted from “too few” acres (especially after the drought of 2012) to “too many” acres. This week we take a big-picture look at U.S. crop acres. Continue reading →