NOPA Calls for Return to Production for CRP Acreage

Tight demand for soybeans, land constraints spur interest in CRP acreage reduction.

Published on: Jun 19, 2012

The National Oilseed Processors Association called on Congress June 15 to return productive U.S. Conservation Reserve Program acres to soybean production in response to  tight U.S. and world supply /demand conditions for soybeans.

On June 12, the U.S. Department of Agriculture's World Supply and Demand Estimates report projected U.S. soybean beginning and ending stocks for 2012-2013 (May) to decline 35 million and 5 million bushels, respectively.

The WASDE report also estimated a world production decline of 28.3 million metric tons between 2010-2011 and 2011-2012. David Hovermale, NOPA Executive Vice President, Government Relations, said these figures represent the largest year-on-year decline in global soybean production, a reduction of about 11%.

Tight demand for soybeans, land constraints spur interest in CRP acreage reduction.
Tight demand for soybeans, land constraints spur interest in CRP acreage reduction.

With exports projected to increase by 20 million bushels, soybean production is headed in the opposite direction, decreasing by 1.1 million acres. There are also worries that the hot, dry weather could further shrink yields this fall.

According to Hovermale, these factors present no margin for error. "The global soybean supply/demand situation is shaping up to be the tightest in modern history," he said.

NOPA asked congress to "Reduce the current CRP cap to 15 million acres; limit expenditures to $1 billion; establish a penalty-free early out; and permit no new acres into the program until supply and demand estimates and stocks–to-use ratios do not show near record shortages.

Hovermale said without additional land available for planting, the U.S. will capture very little of future growth in demand for soybeans.

While the Senate Farm Bill gradually reduces the current CRP cap of 32 million acres to 25 million acres by the end of FY2017, NOPA believes that the reductions are too little and too late. NOPA also cited several other reasons why they believe CRP acres should be returned to production, including a growing population, low production in other countries, limited federal funding for additional CRP acres, and existing land constraints.

The American Soybean Association also supports reducing the acreage cap.

"As CRP contracts expire, we believe the CRP should be targeted to the most environmentally sensitive land and to meet water quality goals. Lands that can be returned to production in an environmentally friendly manner should be returned to productive agricultural use," ASA said.