The Effects of Changing Commodity Prices On the CRP

How might increases in commodity prices, along with the acreage reduction mandated in the 2008 Farm Act, impact the Conservation Reserve Program (CRP)? Modeling Strategy The Likely To Bid (LTB) model “restarts” the CRP from scratch. Uses National Resources Inventory data to find parcels “likely” to offer acreage to the CRP Policy scenarios We consider several scenarios, both with and without increases in CRP rental rates. Continuation of current prices, which are well above prices prevalent when most CRP contracts were enrolled Predicted prices due to an increase in biofuels production to 15 billion gallons Expectation that summer 2008 prices will be the norm Findings Continuation of current, relatively high commodity prices would have noticeable impacts on the costs and environmental benefits of the CRP Additional impacts due to increasing ethanol production (from 6.5 to 15 billion gallons) would be relatively minor Additional impacts of a recurrence of summer 2008 prices would be substantia