WASHINGTON, SEPT. 18, 2014 – The
Food and Agricultural Policy Research Institute (FAPRI) has released a new snapshot
updating its five-year outlook for crop prices. The report incorporates USDA
data from mid-September that suggest bigger corn and soybean crops than
previously estimated – and lower projected prices for many crops.
FAPRI said the updated price
projections cover the expected five-year length of the 2014 Farm Bill and are
intended to provide additional information that producers can use in making choices
about crop insurance. The Institute noted that producers must make a one-time
election to participate in the Agriculture Risk Coverage (ARC) or the Price
Loss Coverage (PLC) program for the life of the 2014 Farm Bill. Expected
payments under each of the program options are very sensitive to expected crop
prices, given the formulas used to calculate ARC and PLC payments.
Here are some highlights of the updated
estimates:
-Larger corn and soybean crops
translate into lower projected 2014/15 prices for many grains and oilseeds.
Corn prices drop to $3.50 per bushel, soybeans to $9.92 per bushel and wheat to
$5.91. In all three cases, these projected prices are close to the
midpoint of the price ranges reported in the September USDA World Agricultural
Supply and Demand Estimates (WASDE)
-Larger crops in 2014/15 also result
in larger beginning stocks and total crop supplies in 2015/16. As a result,
corn and soybean prices for next year’s crop are lower than projected in
August. Corn prices average $3.80 per bushel in 2015/16, and soybean
prices drop to $9.04 per bushel.
-Prices recover as markets adjust. In
the 2016-18 period, corn prices average $4.10 per bushel, soybeans average
$10.21 per bushel, and wheat averages $5.78 per bushel.
-Upland cotton price projections for
2014/15 are largely unchanged from last month, as USDA estimates suggest
offsetting reductions in domestic supplies and global demand. The weaker global
demand is assumed to continue, slightly reducing price projections for 2015/16
and beyond relative to previous estimates.
Excel tables that show FAPRI’s
projected U.S. supply and use for corn, soybeans, wheat, upland cotton, rice
and sorghum are available at www.fapri.missouri.edu
. FAPRI said plans call for additional
updates each month through the end of the ARC-PLC election period.
Each year, FAPRI and collaborating
institutions produce a 10-year outlook for U.S. and world agricultural
commodity markets, generally released in early March. The five-year update to
the 2014 baseline outlook for U.S. commodity markets was released in August.
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