U.S.D.A.: No penalty-free release of C.R.P. acres

by Jay Sjerven
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WASHINGTON — Chuck Conner, acting secretary of agriculture, on Sept. 30 announced the U.S. Department of Agriculture will not offer penalty-free releases from Conservation Reserve Program contracts.

Many in the grain industry urged the U.S.D.A. to allow penalty-free releases and to announce them before winter wheat planting is concluded. But the U.S.D.A. indicated farmers will respond to market prices and plant more wheat without such measures being implemented. Also, C.R.P. contracts on 2 million acres expired on Sept. 30. Some of those acres may return to production. The U.S.D.A. indicated there likely will be no general sign-ups for the C.R.P. with grains stocks so tight.

The text of Mr. Conner’s statement follows:

"While this year’s global wheat market remains very tight, corn production is expected to be record high, and today’s grain stocks report indicated higher-than-expected stocks for corn and soybeans at the start of the 2007-08 crop year. In addition, more than 2 million C.R.P. acres expire under existing contracts this weekend, on Sept. 30, 2007.

"Wheat, soybean and corn markets are providing strong incentives to plant more acreage this fall and next spring. Throughout this year, the market focused on attracting corn acres and, to a lesser extent, wheat acres. Producers responded strongly, with corn acres increasing to their highest level since 1944. Wheat market prices are indicating an expected significant increase in planted area this fall and next spring in the U.S. and around the world. The potential exists for increased double-cropping and the planting of fallow ground. Overall, I expect that market signals will continue to provide adequate acres, recognizing that strong competition among crop is likely.

"I would not anticipate offering a general sign-up while grain stock levels remain historically low and prices continue at unprecedented levels. Acres under continuous C.R.P. sign-up, such as filter strips and riparian buffers, are not affected by general sign-up decisions. Enrollment of acres that qualify for continuous sign-up is ongoing.

"I will continue to closely monitor the acreage response and market conditions. I will not hesitate in the future to make adjustments to U.S.D.A. programs if needed to achieve balance in the agricultural sector."

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