Impact of voluntary changes may not be significant
As alerted, USDA will allow Conservation Reserve Program (CRP) participants who are in the final year of their CRP contract to request voluntary termination of their CRP contract following the end of the primary nesting season for fiscal year 2022. Participants approved for this one-time, voluntary termination will not have to repay rental payments, a flexibility implemented this year to help mitigate the global food supply challenges caused by the Russian invasion of Ukraine and other factors, USDA said. Link for details.
Today, USDA also announced additional flexibilities for the Environmental Quality Incentives Program (EQIP) and Conservation Stewardship Program (CSP).
But how many producers will take USDA up on these changes?
The maximum is less than 2 million acres, as the charts below signal.
If approved for voluntary termination, preparations can occur after the conclusion of the primary nesting season. Producers will then be able to hay, graze, begin land preparation activities and plant a fall-seeded crop before October 1, 2022. For land in colder climates, this flexibility may allow for better establishment of a winter wheat crop or better prepare the land for spring planting.
Comments: The USDA move is a major flip-flop by USDA Secretary Tom Vilsack, who earlier wanted additional acres in the CRP. This shows the push by White House officials, reportedly led by the National Economic Council (NEC), to get more plantings for the 2023 season. It looks like a growing number of White House officials fret that the food supply/price situation could linger into the 2023 season and thus have a sustained inflation impact. Said one source: “This announcement comes from a Biden administration that until now did everything they could to boost conservation amid their all-of-government approach to carbon mitigation.”