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Agronomic Conservations to Address Supply Chain Disruptions

Given current global challenges, lawmakers have proposed allowing select land currently enrolled or soon-to-be enrolled in the Conservation Reserve Program (CRP) to be opened for crop production in the immediate future. In 2021, approximately 315,000 U.S. producers received CRP payments, accounting for roughly 22 million acres enrolled in the CRP program or 8.7% of U.S. cropland.

ASA, CSSA, and SSSA members and certified professionals drafted scientific and agronomic considerations that address a potential shift in land use out of conservation and into crop production. We recognize that these are not the only points to be considered and acknowledge the growing global food security challenges brought on by Russia’s invasion in Ukraine.

The following are the key takeaways from the report:

  • In most cases, converting CRP acres to crop production is resource intensive and may require more time and agronomic inputs than currently available prior to the 2022 growing season. Conversion may be more feasible for the 2022 winter growing season or 2023 spring growing season.
  • Crop yields tend to be below average the first year after CRP is converted to cropland. Combined with high input prices and low supply, producers may face economic challenges upon converting CRP to cropland at this time even though crop prices are also high.
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Iran War = “Trend is Your Friend” Short-Term BUT……

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Historically wars like the 2026 Iran war are bullish hard assets like grains, metals and energy! The funds are spooked and do not want to be short, but do they price in the news over time, similar to the Ukraine/Russian war that started on Feb. 24, 2022? A closure of the Strait of Hormuz is the key to the surge in crude oil, natural gas prices and fertilizer prices.  Grains are breaking out to new contract highs as a hedge against inflation.