What is the Estimate on the 2014 MYA Price

Published on: 23:01PM May 27, 2015

There are two key data points that go into the ARC-CO calculations for the 2014 crop year.  First, we have a fairly good estimate of the actual 2014 yield for most of the major crops from NASS.  Although these are not final yields (only FSA posted yields will count for ARC-CO calculations), they give us a feel for what the actual yield for your county should be.  A conservative approach is to take the NASS harvested yield and use that in your calculations.  However, several counties may end up with yields substantially higher than this yield, but it is likely that more than 95% of the counties in the NASS survey will not exceed these yields.

Second, we need to have the final MYA price for each of the crops.  Currently, there are three crops that have marketing years that end on May 31 (which is this Sunday).  They are Wheat, Barley and Oats.  Professor Art Barnaby of Kansas State University updates a monthly report with his estimate of the MYA price for Wheat, Corn, Soybeans and Sorghum.  Generally, the USDA provides monthly price information around the 10th of each month (although there certain months when this is posted at the end of the month, etc.).

In his latest report (dated May 1), he projects the final MYA price for wheat at $6.00 which is 50 cents higher than the $5.50 reference price.  Since there is only three months of actual price data left between the last updated USDA price and May 31, 2015, there is little chance of the final MYA price coming in much lower than his estimates.  Over 82% of the wheat crop has already been sold for the current marketing year and he is forecasting prices for April and May in the $5.40 range.  Barley and Oats are at least 35 cents above there reference price so the only payments on these two crops will be ARC-CO payments.

Corn MYA price is forecasted at $3.74.  This is only 4 cents higher than the $3.70 reference price and with the price trends that we are seeing this month, there is a chance that the final MYA price may dip below $3.70 and create a small PLC payment.  If this price remains at about this level, most of the corn growers in Minnesota, Northern Iowa, Nebraska, etc. that were looking at maximum ARC-CO payments should receive them.  Those counties that were on the border-line may start to see a larger payment materialize if the MYA prices continues a downward trend.  Professor Barnaby is predicting prices will be in the $3.81-3.93 range during April to August.  I am not sure if they can quite keep up that pace.

Soybean MYA price is  forecasted at $10.06 which is substantially higher than the $8.40 reference price.  Only producers that elected ARC-CO with reduced 2014 county yields will get any payment.

Sorghum MYA price is forecasted at $3.94 which is only one penny under the $3.95 reference price.  Strong demand from China is keeping sorghum prices well above corn prices and if this trend goes through the August 31, 2015 marketing year, only minor Sorghum PLC payments will be made and ARC-CO will only make a payment with if 2014 yields are down compared to the Olympic average yield.