The Food, Conservation and Energy Act (FCEA, the 2008 farm bill) modifies farm commodity and biofuel support policies and creates a new Average Crop Revenue Election (ACRE) program. This report provides preliminary analysis of impacts of selected FCEA provisions: • Increase in target prices and loan rates for several farm commodities • Reduction in the target price for cotton • Reduction in the share of base acreage eligible for direct payments • Delays in the timing of direct and countercyclical payments (CCPs) • Modification of the dairy price support and Milk Income Loss Contract (MILC) programs • Extension of the ethanol specific tariff and reduction in the ethanol tax credit • Creation of a program to make payments to domestic users of cotton • Creation of the ACRE program Other commodity provisions of the farm bill, such as changes in payment limitation rules, are not considered in this preliminary analysis, nor are measures not directly related to farm commodity or biofuel programs. The point of reference for the analysis is the stochastic baseline prepared by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri–Columbia (MU) in early 2008. Relative to a simple extension of previous law, most of the selected provisions of FCEA not related to ACRE would have only modest impacts on commodity markets, farm program expenditures and consumer food prices. • For most commodities, the changes in target prices and loan rates are likely to have little market impact, as projected prices are generally far above levels that would trigger payments. • The one exception is upland cotton. Lower cotton target prices translate into slightly lower CCPs to cotton producers. • Changing the timing of payments affects estimates of the fiscal year taxpayer cost of farm programs, but does not affect the amounts that eventually will be paid to producers. • Basing the price triggering MILC payments on feed costs is likely to generate a higher payment trigger, but milk prices are expected to be high enough that few payments result. • Extending the $0.54 per gallon specific tariff on ethanol imports for two more years results in lower ethanol imports and slightly higher prices for ethanol and corn. • In contrast, reducing the ethanol tax credit to $0.45 per gallon from the current $0.51 per gallon would tend to reduce ethanol and corn producer prices. The tariff effect is slightly larger than the tax credit effect, so average corn and ethanol prices increase slightly. • The cotton user program slightly increases domestic cotton mill use and cotton prices. The ACRE program could have significant effects on producer income and taxpayer costs. On a crop year basis, the program increases net farm program payments by an average of more than $1 billion per year and the potential expenditures are much larger. Given program rules and estimated payments, the ACRE program appears much more likely to appeal to producers of feed grains, wheat and soybeans than to producers of cotton, rice and peanuts. Thus, the program is more likely to be attractive to producers in northern states than in southern states.