FAPRI Finds Some Crop Price Improvement

February 17, 2000

The Food and Agricultural Policy Research Institute has published a preview of its January 2000 baseline that shows crop prices generally should exceed the loan rates in 2002-05.

For wheat, FAPRI expects the average farm price this year will be $2.81 per bushel against a loan rate of $2.58; an average farm price of $3.06 in 2001 with a $2.58 loan rate and an average of $3.24 per bushel with a $2.49 loan rate.

Wheat production should increase steadily from 2.2 billion bushels this year to 2.25 billion in 2001 and an average of 2.4 billion bushels in 2002-05. Export expectations bare budge: 1.13 billion bushels this year, 1.2 billion in 2001 and 1.2 billion for 2002-05.

Corn prices, too, should average higher than the loan rate: $2.07 per bushel this year with a loan rate of $1.89; $2.16 in 2001 with the same loan rate and an average of $2.24 per bushel in 2002-05 with a loan rate of $1.79.

Production should total 9.4 billion bushels this year, according to FAPRI, 9.65 billion in 2001 and average 10.2 billion bushels in 2002-05. Exports improve little: 2.04 billion bushels this year, 2.07 billion in 2001 with an average of 2.3 billion bushels in 2002-05.

Soybean prices don. t make it beyond the loan rate for several years, according to FAPRI. This year, the average farm price should be $4.24 per bushel with a loan rate of $5.26; $4.49 in 2001 with the same loan rate, and $5.08 per bushel on average in 2002-05 with a loan rate of $4.92.

Exports also improve little for soybeans: 989 million bushels this year followed by 1.05 billion in 2001 and slightly more than 1 billion bushels in 2002-05. Production is almost static: 2.9 billion bushels this year, 2.9 billion in 2001 and 2.97 billion on average for 2002-05.

The FAPRI preliminary baseline can be accessed on the Internet at

http://www.fapri.iastate.edu/baseline2000/baseline%20preview.pdf