A new report shows little difference from the U.S. Department of Agriculture’s (USDA) annual Prospective Plantings information. The report from the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI-MU) is also consistent with what FAPRI-MU released in March.
· For the current 2014/15 marketing year, projected corn, soybean and wheat prices are almost the same as in the March update. The marketing year average price is projected to be $3.71 per bushel for corn, $10.11 for soybeans and $6.06 for wheat.
· The 2014/15 sorghum price is now projected at $3.99 per bushel, up from previous estimates. Strong export sales to China have allowed sorghum to sell at a premium to corn.
· The 2014/15 rice price projection is reduced to $14.00 per hundredweight this month, primarily because USDA reported a sharp drop in the monthly rice price for February.
· USDA’s report indicates farmers intend to plant slightly more corn and soybeans than FAPRI-MU projected last month. Assuming final plantings match these intentions, projected 2015/16 prices average $3.86 per bushel for corn and $9.17 per bushel for soybeans, both down slightly from the March estimates.
· Longer term price prospects are little changed from last month. For most crops, projections for 2016/17 and beyond are very close to those reported in March.
Producers had to pick whether they would use the Agriculture Risk Coverage (ARC) or the Price Loss Coverage (PLC) program for the life of the 2014 farm bill. Payments under each of the program options are very sensitive to crop prices. Different expectations about future crop prices will lead to different expectations about future payments under the programs.