USDA's Glauber Downplays 10-Year Baseline Projections Released Thursday

February 14, 2014 12:06 AM

via a special arrangement with Informa Economics, Inc.

Says USDA likely underestimated corn prices due to assuming no new farm bill | Expects next week's USDA projections to shower fewer corn acres, but more soybean plantings vs baseline projections

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

USDA’s 10-year agricultural projections released Thursday likely underestimate corn prices because of changes made by the 2014 Farm Bill, according to the department's chief economist, Joe Glauber, in an interview with Congressional Quarterly (CQ) from Brussels where he has meetings with the European Commission.

The new farm programs will likely provide less encouragement to farmers to plant corn this year, Glauber said, but the forecast had to be prepared using policy assumptions of the old farm bill. The now-expired ACRE (Average Crop Revenue Election) program paid on planted acres and likely would have kept more 2014 acreage in corn than is likely under the new programs, Glauber said in the interview with CQ.

USDA will release updated acreage and supply and demand estimates for 2014/15 during next week's annual outlook forum. Glauber expects the updated forecast to lower corn acreage and raise soybean plantings.

The price expectations will be important to farmers as they choose between the new farm bill's two safety net farm programs -- the target/reference-priced-based Price Loss Coverage or the revenue-based Agriculture Risk Coverage program. Glauber said USDA officials are working long hours to finalize the rules but he did not provide signup details. "All I can tell you is that the secretary (Vilsack) is driving that process pretty hard. We’ve been meeting for the last six weeks in anticipation of getting these programs out as quickly as possible," he said.

Comments: Markets may well react today to this development as the baseline projections issued by USDA Thursday were cited by some as a market factor showing corn plantings at 93.5 million acres and soybean plantings of 78 million acres for the 2014/15 marketing year. Glauber typically delivers a broader-view look at the US agriculture situation for the coming crop year when he makes remarks on the first day of the Outlook Forum on Feb. 20. That will likely be the format for the release of "updated' acreage figures compared to those released Feb. 13 in the baseline projections. And, the more-detailed supply/demand look will come from USDA analysts Friday morning Feb. 21.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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