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USDA Releases "Season-Average Price Forecasts" Outlook Report

Farmers and policymakers are interested in season-average forecasts of prices received by farmers for corn, soybeans, and wheat. These forecasts are also needed to compute Price Loss Coverage (PLC) payment rates and Agricultural Risk Coverage (ARC) payments that began in 2014/15 under the 2014 Farm Act.  For more information on the new PLC and ARC programs, see Agricultural Act of 2014: Highlights and Implications and USDA's Farm Service Agency (FSA).
 
This data product provides three Excel spreadsheet models that use futures prices to forecast the U.S. season-average price received by farmers for corn, soybeans, and wheat. The models also compute the PLC payment rates for marketing years 2014/15 and beyond.  The models do not compute ARC program payments for marketing years 2014/15 and beyond because those calculations require State-, county-, or farm-level data. Users can view the model forecasts or create their own forecast by inserting different values for futures prices, basis values, or marketing weights. A brief description of the forecast model components, procedures, and data is provided “by clicking on the documentation tab within each of the below spreadsheets; corn, soybeans, and wheat.”    
Previous season-average price forecasts for corn, soybeans, and wheat were also used to compute Counter-Cyclical Payment (CCP) rates for marketing years 2003/04 through 2013/14 (see historical forecasts for these computations). Official USDA CCP rates are available from USDA, FSA. The models did not compute Average Crop Revenue Election (ACRE) program payments for marketing year 2013/14 or earlier because those calculations required State-, county-, or farm-level data.
 
Using Futures Prices to Forecast the Season-Average Price of Upland Cotton
 
The upland cotton’s SAP is a key parameter in determining the U.S. cotton sector’s financial health and had been used in determining commodity program payments. However, under the Agricultural Act of 2014, Title 1’s Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) programs for upland cotton requiring a SAP were replaced by a  stacked income protection plan (STAX), which depended, instead, on selected futures prices (Effland et al., 2014; USDA, Risk Management Agency, 2016).[1] On February 9, 2018, a new seed cotton program was added to Title 1 of the farm bill (National Cotton Council, 2018). This new program combines lint and cottonseed into one program and provides cotton producers the choice between a PLC or ARC program for the 2018 crop. Thus, a SAP is again needed in calculating payments for the PLC or ARC programs.
 
The attached Excel file for upland cotton focuses ONLY on forecasting the lint cotton SAP, the same SAP that WASDE currently reports, not the seed cotton SAP from the new seed cotton program, which began with the 2018/19 marketing year. 
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Moving Ag Research Forward Through Collaboration

Video: Moving Ag Research Forward Through Collaboration



BY: Ashley Robinson

It may seem that public and private researchers have different goals when it comes to agricultural research. However, their different strategies can work in tandem to drive agricultural research forward. Public research may focus more on high-risk and applied research with federal or outside funding, while private sector researchers focus more on research application.

“For me, the sweet spot for public private sector research is when we identify problems and collaborate and can use that diverse perspective to address the different aspects of the challenge. Public sector researchers can work on basic science high risk solutions as tools and technologies are developed. They then can work with their private sector partners who prototype solutions,” Mitch Tuinstra, professor of plant breeding and genetics in Purdue University’s Department of Agronomy, said during the Jan. 10 episode of Seed Speaks.

Public researchers they have the flexibility to be more curiosity driven in their work and do discovery research. This is complimentary to private research, which focuses on delivering a product, explained Jed Christianson, canola product design lead for Bayer CropScience, explained during the episode.

“As a seed developer, we worry about things like new crop diseases emerging. Having strong public sector research where people can look into how a disease lifecycle cycle works, how widespread is it and what damage it causes really helps inform our product development strategies,” he added.

It’s not always easy though to develop these partnerships. For Christianson, it’s simple to call up a colleague at Bayer and start working on a research project. Working with someone outside of his company requires approvals from more people and potential contracts.

“Partnerships take time, and you always need to be careful when you're establishing those contracts. For discoveries made within the agreement, there need to be clear mechanisms for sharing credits and guidelines for anything brought into the research to be used in ways that both parties are comfortable with,” Christianson said.

Kamil Witek, group leader of 2Blades, a non-profit that works with public and private ag researchers, pointed out there can be limitations and challenges to these partnerships. While private researchers are driven by being able to make profits and stay ahead of competitors, public researchers may be focused on information sharing and making it accessible to all.

“The way we deal with this, we work in this unique dual market model. Where on one hand we work with business collaborators, with companies to deliver value to perform projects for them. And at the same time, we return the rights to our discoveries to the IP to use for the public good in developing countries,” Witek said during the episode.

At the end of the day, the focus for all researchers is to drive agricultural research forward through combining the knowledge, skills and specializations of the whole innovation chain, Witek added.

“If there's a win in it for me, and there's a win in it for my private sector colleagues in my case, because I'm on the public side, it’s very likely to succeed, because there's something in it for all of us and everyone's motivated to move forward,” Tuinstra said.