# CRP Question



## always_outdoors (Dec 17, 2002)

I got my Wildlife Federation newsletter the other day and it showed a table of the CRP acres in ND. It appears as though almost all but a few acres can be renewed with many acres being renewed from 5-15 years.

Here are my questions.

1. Am I reading this correctly?

2. Won't a renewal mean increased payment in some instances?

3. Is there any projections from FSA as to how many acres will try to be renewed or a percentage that will choose not to renew?


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## g/o (Jul 13, 2004)

Live? I hope I get the right one. It appears as though almost all but a few acres can be renewed with many acres being renewed from 5-15 years.

Important thing to point out here, can be renewed that doesn't mean they will be.

Won't a renewal mean increased payment in some instances?

No only the top 20% in the county are offered increases the rest get nothing but a chance to extend the misery.

Is there any projections from FSA as to how many acres will try to be renewed or a percentage that will choose not to renew?

In my opinion this is what they are doing now. A new farm bill will becoming out as long as a new administration. They are what we refer to in grain trading as fighting for acres in my opinion. By offering these contracts they will go into the next farm bill and say we got X amount of acres. If they feel they have enough that will be the end if they feel they need more they then will offer contracts again. Of course this is my personal opinion and many will disagree I'm sure. I feel the days of us having are whole farms into CRP is over. I also feel this is the way it should be. However what does not get brought up is that if you have a quarter of land (160 acres) and there is like on many of mine an area that is non productive. They will square off that corner and allow you to keep it in CRP. Now there are no pay raises for this. But as an example if in my area you are getting $ 45 an acre. New contacts are offered 52.50 still under cash rent but not bad. So if you actively went after some of these acres and talked land owners into leaving 40 acres or so. By putting this into the working lands program with the state and have local communities kick in extra you now can be up to 52.00 an acre. So your totally confused right I don't blame you. Just an idea.


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## always_outdoors (Dec 17, 2002)

I appreciate the response g/o. I used to work pretty close with farmers in my previous job, but unfortunately haven't done so in many years. The ones I talk to say they are digging it up.

I wonder what our retired land owners living off of CRP payments will do. At an older age, would you want a landowner to rent it out for more money which could end up being a hassle (depending on landowner I guess) or take a renewal for less money.


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## Bert (Sep 11, 2003)

One of my CRP contracts is up in 07, another in 08. 
I just got a letter stating that I can re-up for 4 years on the 07 piece. Same contract and a $60.00 "come and look at it" fee. The next day, I got the same letter about my 08 land, same deal, same $60.00 fee. (of course once they are there, one would think that they could look at both pieces since they are adjacent to one another but...whatever.
Here is somthing to think about...
Given the current tax status of my property (farm) the CRP payment doesnt even cover my taxes so basically, I am paying out of pocket to the government for a program that they came up with and my only consolation is what it does for wildlife. 
I have no problem with that but I think that there are a lot of people out there who only look at the big producer who turned it all into CRP and ends up making some money. For many small guys like myself, financially, it is a losing proposition.

The other thing to consider when looking at what some of these guys make off the program ($480.000.00 over 10 years or whatever) is what it costs them to operate over 10 years. 
Some big producers (especially in the Dakotas) who farm section after section, may gross hundreds of thousands a year but after overhead costs, taxes blah blah blah may net no more than you or I.


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## g/o (Jul 13, 2004)

Bert said: Given the current tax status of my property (farm) the CRP payment doesn't even cover my taxes so basically, I am paying out of pocket to the government for a program that they came up with and my only consolation is what it does for wildlife.

You're exactly right Bert, between taxes and maintenance you damn near go in the hole out here.. Bert you got by cheap, they wanted $99.00 from me to look at one piece. The rest I told them I wasn't interested in.


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## DJRooster (Nov 4, 2002)

Not sure I understand because our $46 cash rent more than pays for our taxes? Care to enlighten?[/i]


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## Powder (Sep 9, 2003)

I'm confused. Since I don't own any CRP please fill me in on some of the details to help me understand it.

From what I've been reading in this thread the guys that are in the program are receiving roughly $50 per acre. Now you're trying to tell me that your taxes and maintenance are more than $50 per acre????? Just what kind of maintenance are you doing? Are you including planting costs?

From what I can tell taxes are about $4-$7 per acre. Where does the rest of the money go?


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## always_outdoors (Dec 17, 2002)

Powder: Some CRP is so infested with leafy spurge, canadian thistle, or wormwood that some landowners will spend thousands spraying every year. They are required by law to do so.

That is just one added expense on top of making the payment on the land. Not everyone owns those acres. they may still have a note on it at the bank.


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## Bert (Sep 11, 2003)

I get $998.00 anually in payments. My taxes are $975.00.
Gas for keeping weeds down, replanting (as you have to have "x" number of plants per square foot to be legal...it all adds up.
Still a good deal for me because I get to hunt it and see all the benifits to wildlife some of which stay on my property and some of which run or fly away, but it isnt like a guy makes money at it.
There are a lot of ways to make money from land. Some is env friendly and some are not.


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## Powder (Sep 9, 2003)

Bert,
You said you received $998 in annual payments and your taxes were $975.

How many acres did you have in CRP?

How many acres was your property tax bill for?

Did this include your home?

What I'm getting at is that if your payments were for 20 acres but your farm is 140 acres you can't count all the taxes you owe and say the CRP payment barely covers it.

Also, payments to the bank can not be counted. You have that weather you are in CRP or not. Unless cash rent is so much higher, then I can see why it wouldn't be a good deal for you. What is cash rent/acre compared to price/acre the CRP contract is paying?

It's also worth noting that last Thursday's AgriNews in Minnesota reported that the average net farm income for ALL MN farmers in 2005 was up $11,000 to $84,198!

The farmers in the southeast part of the state averaged over $100,000.

It also said that the average farmer received 60% of his net farm income from the federal government.


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## Bert (Sep 11, 2003)

Land in question is paid for so there is nothing going to the bank.
Taxes on the "farm" includes about half tillable (crp) and half woods and swamp. Yes you are correct in that the taxes are for more acres than the CRP but that is the only income from that property.
The only income is CRP and the only outgo is taxes and what it takes to maintain the CRP.
Not a money making venture.

Also, numbers can be decieving in that stating that the family farm now averages 80+k net per year does not take into account how many "family" farms are supporting two, three...four "families". 
You know, Ma and Pa and the three boys and their wives and kids...That is pretty common.


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