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THE LAND — JUNE 24/JULY 1, 2022
The CRP program faces challenging dynamics The Conservation Reserve Program has er than 2021 rental rates in south cenmillion acres currently enrolled in CRP as of April, a long history of promoting conservation tral Minnesota. 2021 — mainly in the Upper Midwest and Plains practices and farmland stewardship in As a result of the 2018 Farm Bill, expir- regions. CRP acres enrolled in these states include the United States. The CRP program was ing CRP acres in 2022 could only receive Texas (2.3 million), Colorado (2 million), South established in December of 1985 as part Dakota (1.8 million), Kansas (1.7 million), Iowa (1.7 a maximum of 85 percent of the average of the 1985 Farm Bill. million), Nebraska (1.5 million), North Dakota (1.2 county cash rental rate, based on U.S. million), Washington (just over 1 million acres), and The initial goal of CRP was to reduce Department of Agriculture data, comMinnesota (just under 1 million acres). CRP acreage soil erosion on highly-erodible cropland pared to 100 percent of the average rate in many of these states has dropped considerably in and to help curb the over-production of when the land was originally enrolled FARM PROGRAMS recent years. farm commodities. Secondary objectives into the CRP program. In some cases, of CRP included improving water quality, that may result in landowners actually Expiring CRP acres and re-enrollment of CRP By Kent Thiesse fostering wildlife habitat, and progetting a lower CRP rental rate for acres viding income support to farmers. 2023 than they received under the Given the current challenge to get more acres More recently, the CRP program has current contract. At the same time, enrolled into the CRP program, one concern is the been identified as a valurather large number of able tool through the CRP contract acres Federal government as a expiring in the next coumethod to promote “carple of years. CRP conMinnesota Region 2021 Crop Returns Cash Rent Paid CRP Rental Rate bon sequestration” on tracts will expire on (FBM Regions) (FBM Average (2021 FBM (2021 USDA working farmland. nearly 4 million acres on Returns per Acre) Average Rent) Average Rate) Currently, getting farmSept. 30, plus an addi Corn Soybeans Corn Soybeans land enrolled into the tional 2 million acres in South Central $442 per acre $334 per acre $229 per acre $230 per acre $214 per acre CRP program is being 2023. A General CRPP Southwest $463 per acre $292 per acre $228 per acre $225 per acre $196 per acre challenged by very posisign-up was held earlier tive economic returns this year (CRP sign-up Southeast $401 per acre $269 per acre $220 per acre $225 per acre $202 per acre from crop production and number 58), in which West Central $374 per acre $219 per acre $186 per acre $184 per acre $169 per acre by tight grain supplies USDA accepted early State Average $395 per acre $237 per acre $202 per acre $184 per acre $146 per acre worldwide. 20,000 CRP contracts representing just shy of Economic challenges Notes: 2.1 million acres into the for the CRP program 1. The “Minnesota Regions” are the Minnesota State College and University Farm Business Management regions. CRP program starting The rising dilemma for Oct. 1. This represented 2. The “2021 Crop Returns” are the average “return over direct expenses” for corn and soybeans, before overhead expenses for the CRP program is that approximately 87 permachinery, etc., based on the 2021 FBM Annual Summary data. current farm economics cent of the CRP contend to counteract enroll3. The “Cash Rent Paid” is the average 2021 cash rent paid by farm operators for corn and soybeans, based on the 2021 FBM tracts and 90 percent of ment into the CRP proAnnual Summary data. the acreage offered by gram. Based on the 2021 landowners in the latest 4. The “CRP rental Rate” is the average 2021 rental rent received by landowners, based on USDA CRP county average rental South Central College CRP sign-up period. data, before direct and overhead expenses, including property taxes. Farm Business Management Summary Only about half of the for over 350 crop farms in south central Minnesota, average land rental rates for 2023 in the same CRP acres expiring in 2022 were re-enrolled into county may be 20-25 percent higher than rental the average return on cash rented farmland over the CRP program during the 2022 sign-up. The rates a few years ago. direct expenses for seed, fertilizer, chemicals, fuel, balance of those acres, over 1.7 million acres, will repairs, etc. — including land rent, land rent — was likely be returned to crop production in 2023. The Refer to the accompanying table for additional $442 per acre for corn and $334 per acre for soydata for the 2022 CRP sign-up period indicated CRP economic data and average rental rates. beans. The average return above all direct and overthat 75 to 100 percent of the expiring CRP acreage Current CRP enrollment head expenses, including annual machinery and was not offered for re-enrollment in 2022 in southAs of April 30, 2022, there were a total of just over ern and western Minnesota and Iowa, as well as in facility investments, was $335 per acre for corn and 22 million acres enrolled in the CRP program, $260 per acre for soybeans. eastern North and South Dakota and northeast which is about 3.5 million acres below the maxiNebraska. The percent CRP re-enrollment for 2022 By comparison, the 2021 average CRP rental mum level of 25.5 million acres for 2022 established was much higher in states such as Texas, Kansas, rate in the 13 counties in the 13 county south in the last Farm Bill. Of the total CRP acres, Colorado and other western states. central Minnesota Farm Business Management approximately 10.2 million acres are enrolled under region was $214 per acre. Based on the 2021 FBM a General CRP contract, 6.8 million acres in Summary summary, the average direct and overhead The future of the CRP program is likely to garner Continuous CRP, just under 3.9 million acres expenses — including property taxes — to mainenrolled in the grassland program, and the balance considerable discussion in the next couple of years tain CRP land was $92 per acre in 2021, resulting of the acres in CREP, wetlands and other special during the writing of the next Farm Bill. The CRP in a net return of $122 per acre. According to the program has a long and successful history of preCRP initiatives. Forty-three percent of the 2021 FBM summary, the average cash rental rate Continuous CRP and CREP acres are enrolled in venting soil erosion, improving water quality, non-farm landowners received from farm operaenhancing wildlife habitat, and aiding in carbon the Clean Lakes, Estuaries and Rivers (CLEAR) tors in 2021 was about $225 per acre, before prop- program. sequestration. While it may seem quite logical to erty taxes and overhead expenses. Cash rental There are nine states which have over or near 1 See THIESSE, pg. 17 rates for 2022 are likely to be 10-15 percent high-
MARKETING
CRP Economic Comparison for Minnesota
