COMMODITY PROBLEMS AND PROGRAM CHOICES: WHEAT, FEED GRAINS, AND SOYBEANS

Agricultural and Food Policy,

Price Determination for Corn and Wheat: The Role of Market Factors and Government Programs

Annual models for U.S. farm prices for corn and wheat are developed based on market factors as well as government agricultural commodity programs. The pricing relationships utilize a stocks-to-use modeling framework to capture the effects of market supply and demand factors on price determination. This formulation is augmented by factors that represent the changing role of agricultural policies, particularly government price support and stockholding programs. For wheat, international market effects as well as wheat feed use and related crosscommodity pricing considerations also are included. Model properties and model performance measures are presented. Additionally, recent price-forecasting applications of the models are discussed. The relatively simple structure of the estimated price models and their small data requirements lend themselves to use in price-forecasting applications in conjunction with market analysis of supply and demand conditions. In particular, the models have been implemented into USDAís short-term market analysis and long-term baseline projections. In these applications, the models provide an analytical framework to forecast prices and a vehicle for making consistency checks among the Departmentís supply, demand, and price forecasts.corn, wheat, farm price, price determination, stocks-to-use ratio, price supports, commodity programs, forecasts, Crop Production/Industries, Demand and Price Analysis,

Financial Conditions on U.S. Cotton Farms

For the last three years, U.S. cotton producers have been heavily dependent on ad hoc emergency disaster and market loss assistance to cash flow their operations. They have not been alone. Wheat, feed grains, oilseeds and rice producers have also been faced with low commodity prices, adverse weather and the need for substantial government assistance. Price support and direct payments by CCC for fiscal years 1998-2000 averaged $17.5 billion per year (USDA Ag Outlook). Has U.S. program crop agriculture turned the corner or will additional government payments likely be needed to sustain a vulnerable sector? This paper will focus on the outlook for the Agricultural and Food Policy Center’s (AFPC’s) representative cotton farms over the period 2001-2005. The results reported herein are drawn from AFPC Working Paper 00-4 which goes into greater depth on all 82 representative farms and ranches modeled by AFPC.Agribusiness, Agricultural and Food Policy, Crop Production/Industries,

EFFECTS OF ALTERNATIVE FARM POLICIES ON FARM AND NONFARM SECTORS OF RURAL AMERICA

Agricultural and Food Policy,

GRAINS AND OILSEEDS OUTLOOK FOR 2010

Crop Production/Industries,

GRAINS AND OILSEEDS OUTLOOK FOR 2009

Livestock Production/Industries,

Agricultural policy reform in the United States: an unfinished agenda

The 1996 Federal Agriculture Improvement and Reform Act (FAIR) contained important breaks with a tradition of crop-by-crop subsidies dating back to the Agricultural Adjustment Act of 1933. Farmers with recorded base acres were given the opportunity (which nearly all accepted) to sign a seven-year `contract' with the US Department of Agriculture (USDA), under which payments will be continued on the merged base acres on a declining schedule until the year 2002. FAIR is an unfinished agenda. First, the coverage of `freedom to farm' is only partial, with numerous commodities left out of the decoupling programme. Second, the largest producers will augment their already significant receipts with generous lump sum transfers from USDA. This will further reinforce the concentration of roughly 90 per cent of receipts and payments in the hands of the 100 000 to 200 000 largest producers of field crops. An alternative would be to make payments in times of low marketing receipts which recede when prices are high.Agricultural and Food Policy,

U.S. FARM POLICY: CAN FAIR BE FIXED?

In the scheme of things, the 1996 Federal Agricultural Improvement and Reform Act (FAIR) contained important breaks with a tradition of crop-by-crop subsidies dating back to the Agricultural Adjustment Act of 1933. It freed many producers of "program commodities" (maize, grain sorghum, wheat, barley, oats, cotton and rice) from a system of crop-specific base acre accounting, merged these accounts into a single "whole farm base," and allowed production of any but a few crops on these lands. Overall, the freedom to produce in direct response to market forces, rather than on the basis of crop-by-crop subsidies, as well as the budget discipline of predetermined payments, were important steps in the direction of decoupled lump-sum compensation. Yet from the point of view of advocates of policy reform, FAIR represents an unfinished agenda. A variety of problems and issues remain. First, the coverage of "freedom to farm" is only partial, with numerous commodities left out of the decoupling program. Second, those critical of the distributive impacts of the commodity programs find little to cheer about in the new contracts, and consider the acronym FAIR ironic. Supply responses induced by price levels in the first two years of FAIR have led to substantially lower prices and marketing receipts in 1998. A call has now gone up to resuscitate some form of safety net, such as a return to deficiency payments or an extension and increase in contract payments under the 1996 Act. It is appropriate to move now to finish the unfinished agenda of the 1996 Act by implementing a long term safety net based on some form of revenue assurance (á la Cochrane and Runge, 1992).Agricultural and Food Policy,

Impacts of Three Provisions in the Administration's 2007 Farm Bill Proposal

This report explains the impacts that three of the provisions from the Administration's 2007 farm bill may have.Agricultural and Food Policy,