The USDA this week rejected a request made by the National Pork Producers Council and other agricultural organizations to release land from the Conservation Reserve Program. Earlier this year, limited haying and grazing were allowed on certain acres enrolled in the program.

"After carefully considering recent crop reports and weather conditions, the price trends we are seeing in grain markets and the likelihood of increasing land for crop production, we have decided not to allow the penalty-free release of CRP land at this time,” says USDA Secretary Ed Schafer. “Despite the damage and disruption caused by the very severe floods that hit the Midwest last month, the indications so far are that the impact on this year's corn and soybean crops will be less than was originally feared.

Cash prices for corn are down 25 percent from their record highs last month due to good growing weather experienced in recent weeks and encouraging reports on crop conditions. 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.

The recent easing in prices is helpful to the livestock industry and will allow current CRP contract holders to make informed decisions about whether they want to take an early exit from the program. Another factor considered by USDA is that under the provisions of the 2008 Farm Bill, and the terms of existing CRP contracts, total acreage in the program is going to drop without any action by USDA.
In the 2008 Farm Bill,

Congress lowered the cap on the 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.

Owners have the option of taking their acres out of the program early in exchange for returning all payments they have received plus interest and a penalty.

“The action we took in May to allow haying and foraging on up to 24 million CRP acres this year-after the primary nesting season ends-provided contract holders with another choice for managing their lands and feeding livestock,” says Schafer. “We believe the decision that we are announcing today strikes the best possible balance between supporting programs that protect our natural resources and meeting the nation's need for grain production.”

To listen to Schafer's comments, click here.

Source: National Pork Producers Council, USDA