The Agricultural Act of 2014 (the 2014 Farm Bill) requires owners and/or tenants to elect either the new Agricultural Risk Coverage (ARC-CO or ARC-IC) or Price Loss Coverage (PLC) programs for each covered commodity on their farms. The MSU 2014 Farm Bill Analyzer provides farm management information on the yield update, base reallocation, and ARC versus PLC decisions based on assumptions about farm yields, county yields, and Five Year Forecasts of National Market Prices. Given the inputted variables listed above, the MSU 2014 Farm Bill Analyzer will calculate the consequences for the farm manager’s alternative decisions regarding yield updates, base reallocation and the election of ARC-CO, ARC-IC, or PLC programs.
The MSU Farm Information Resource Management team will be collecting, listing, and updating several Five Year Forecasts of National Market Prices which can be used in the Farm Bill Analyzer. By the first of the year, the price forecasts will be available on the FIRM Team website at both the Market Outlook & Probabilistic Price Forecasts for Grain & Livestock, and the Farm Bill sections of the FIRM website.
The five year price forecasts provided for corn, wheat, and soybeans, will include the updated monthly Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri five year forecasts the first five years of the soon to be released USDA 10 year forecasts, Jim Hilker’s five year forecasts thoughts, what the futures markets indicate, and a composite forecast of the first four.
While these long term price forecasts will provide good starting points, we all know that weather, world conditions and other factors will change these forecasts continually over the next five years, but the farm bill elections need to be made by the end of the signup period. Strongly consider going to one of the many MSU Farm Bill informational meetings being held throughout Michigan to learn how to manipulate these forecasts to help introduce price risk when using the MSU 2014 Farm Bill analyzer to make your decisions.