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Using Futures Prices to Forecast the Season-Average Price and Counter-Cyclical
Payment Rate for Corn, Soybeans, and Wheat
Overview
Farmers and policymakers are interested in the level of counter-cyclical payments (CCPs)
provided by the 2002 Farm Act to producers of
selected commodities. CCPs are based on the season-average price received by farmers.
This data product provides three Excel (*.xls) spreadsheet models that use futures
prices to forecast the U.S. season-average price received and the implied CCP
for three major field crops (corn, soybeans, and wheat). Users can view the model
forecasts or create their own forecast by inserting different values for futures
prices, basis values, or marketing weights. Example computations and data are
provided.
Spreadsheet Models
For each of the three major U.S. field crops, the Excel spreadsheet
model (*.xls) computes a forecast for 1) the national-level season-average price
received by farmers and 2) the implied counter-cyclical payment rate.
Note: the model forecasts are not official USDA forecasts. See USDA's
World Agricultural Supply and Demand Estimates for official USDA season-average price forecasts. See USDA's
Farm Service Agency information for official USDA CCP rates.
Forecast Updates
The Excel files are updated monthly and will be posted on the
same day as the release of USDA's World
Agricultural Supply and Demand Estimates (WASDE). See the ERS outlook
reports page for the release calendar.
Source Report
Users are highly encouraged to read Forecasting
the Counter-Cyclical Payment Rate for U.S. Corn: An Application of the Futures
Price Forecasting Model. This report provides background information on the
futures forecast model for corn, its data requirements, the forecast procedure,
and forecast results for crop years 2003/04 and 2004/05.
Model Components
Each spreadsheet model (corn, soybeans, and wheat) contains seven separate worksheets.
The forecasts are provided on a marketing-year basis (September-August for corn
and soybeans and June-May for wheat).
- The Contents sheet provides an explanation of each spreadsheet in the file.
- The 2007/08 forecast worksheet provides:
- A weekly forecast of the season-average farm price received and implied counter-cyclical payment rate. Users may change the weekly forecast by going to the Change forecast worksheet.
- A chart of weekly forecasts for the entire marketing year.
- An explanation of the detailed computational steps for the weekly forecasts for the marketing year.
- The 2006/07 forecast worksheet provides:
- A weekly forecast of the season-average farm price received and implied counter-cyclical payment rate. Users may change the weekly forecast by going to the Change forecast worksheet.
- A chart of weekly forecasts for the entire marketing year.
- An explanation of the detailed computational steps for the weekly forecasts for the marketing year.
- On the Change forecast worksheet, users can change the model's forecasts by inserting their own numbers for futures prices, monthly basis values, and/or monthly marketing weights.
- The Definitions worksheet defines key terms associated with the futures forecast model.
- The Documentation worksheet provides a brief description of the forecast model, data sources, and forecast procedures.
- The Data worksheet provides current and historical data needed to produce the marketing-year forecasts:
- Weekly and monthly futures prices of the nearby contract by marketing year,
- Monthly and annual farm prices received by marketing year,
- Monthly basis values by marketing year,
- Monthly marketing weights by marketing year,
- Monthly season-average-price-received projections from WASDE, and
- Policy parameters (target prices, loan rates, and direct payment rates).
Historical Forecasts
Excel files that contain forecasts for previous marketing years:
Related Research
University of Illinois, Farmdoc Project,
Counter Cyclical Payment Tool provides an estimated CCP rate for eight commodities based on monthly WASDE projections of season-average price as well as projections for other parameters.
Kansas State University, Agmanager uses monthly WASDE releases to compute projected CCP rates for 10 commodities. The estimates are in a pdf document called Policy Minute, which can be
found under the Program Details section of the website. Policy Minute also has information on USDA CCP rates for the past and current marketing year.
Using Futures Prices to Forecast the Season-Average U.S. Corn Price (a paper presented at the NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management in St. Louis, MO, April 19-20, 2004) provides the theoretical background and forecast accuracy of the futures price model.
Related Briefing Rooms
Corn
Soybeans
Wheat
Farm and Commodity Policy
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