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
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). 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. Click here to see more...