What are the implications of using plug yields?
The most obvious impact of this FSA provision allowing plug yields to be used is that farmers with yields below the county average in some years can simply elect to use the plug yields instead. The farm “trigger” revenue for 2009 will be based on the average of the middle three out of these five yields (2004-2008), multiplied by the average marketing year price for the 2007 and 2008 crops. This means these farmers’ “actual” farm revenue in future years will be more likely to fall below the trigger level than if they had used their actual farm yields. It should be remembered, though, that falling below the farm level trigger is only one of the conditions required to receive an ACRE payment. The state level revenue must also be below the state trigger, and the size of the payments is based on the state level revenue shortfalls. Once the state level payment per acre is determined, it is adjusted by multiplying by the farm level historic yield as a percent of the state level historic yield
