Production Flexibility Contract Payments: Fiscal Year 1996

Using data from the United States Department of Agriculture on the Production Flexibility Contract (PFC) acres enrolled for fiscal year 1996, the authors calculated the payment rates by bushel, acre, and state. The total payments by state under the 1996 FAIR Act were also calculated. Figures given in this paper provide a comparison by state and commodity

The EU Export Tax: Impact on U.S. Markets

ln response to high world grain prices, the European Union (EU) introduced wheat export taxes in November 1995 for the first time in more than a decade. Normally, the EU offers export subsidies to make up the difference between their high internal grain prices and world market prices. However, EU internal support prices have been reduced over the last three years as a result of policy reforms. Recent high world grain prices have exceeded the EU support prices since early in the 1995/96 crop year. Rather than let internal prices follow world market prices upward, the EU decided to protect its domestic grain users and levy an export tax to prevent internal prices [rom rising to world levels (Figure 1). The major impacts of this tax were to reduce EU wheat production and exports from what they would have been without the tax, reduce internal grain prices, and increase wheat feed use. These changes directly impact the U.S. and world wheat markets and indirectly influence feed grain markets

The Look of the New Conservation Reserve Program

In recent years some prognosticators envisioned that the amount of acreage enrolled in the Conservation Reserve Program (CRP) would shift from west to east. This expectation is based on a perceived increase in the social valuation for water quality versus other CRP benefits. Some west-to-east shifts did occur after CRP rules were revised under the 1990 Farm Bill. However. the latest sign-up results reveal the opposite- an east-to-west movement

How Iowa Stacks Up Under the 1996 Freedom to Farm Payments

Production Flexibility Contract (PFC) acres enrolled for fiscal year (FY) 1996 were released by USDA on August 19, 1996. From these data, and what we know about the payment stream, we calculated the payment rates by bushel, acre, and state. Total payments by state under the 1996 FALR Act were also calculated. These figures provide a comparison by state and commodity

Weather Shocks, Iowa Agriculture, and Agricultural Policy

Volatility in Iowa agriculture, especially in yields and prices of corn and soybeans, has been increasing over time and indications are that increases in volatility are likely to continue in the future. Two primaTy reasons u nderlie probable increases in this volatility: (1) Increasing yields through plant development implies that regional weather shocks have an increasing effect on production supply, and (2) Levels of buller stocks are so low that there are limited price stabilization effects due to changes in stockholdings. Figure l shows historical yields for Iowa corn and illustrates that yield deviations have been steadily increasing over time. Stocks-to-use ratios presented in Table 1 show declines in projected values

Stocks-to-Use Ratios and Grain Price Volatility

Speculation in the agriculture community early this year focused not only on a new farm bill but also on the abnormal world grain market conditions. Much of the market speculation centered on the fact that we currently have high prices driven by strong demand and low supply. This has caused stock holdings of grain to be drawn down. An indicator of the stock situation relative to consumption can be found in the stocks-to-use ratio. This indicator is useful for evaluating grain price movements and potential movements. This article briefly explores the market relationships that underlie this ratio. It also serves as an introduction for a new addition to the indicator section of this publication

Farm Bill Options and Iowa Agriculture

The 1995 Farm Bill debate is heating up. The conclusion of the policy discussions will impact the future of the agricultural community as well as those businesses that have a stake in the agricultural and rural economy

Grains and Oilseed Cropland: A Global Perspective

Current tight grain markets have led some commentators to argue that the world is entering a phase of rising food scarcity. The present situation js related to the rise in world consumption, which has tended to outpace production during the 1990s. While most supply shortages were due to weather shocks, the global area planted to grains has decreased from 1,784 million acres in l 980to 1,718 million acres in 1996 (USDA). The question remains, Are there enough land resources available globally to meetfutwe production needs? The combined grains and oilseeds area has, however, increased tWer that same period