U.S. Baseline Briefing Book

Projections for Agricultural and Biofuel Markets

March 2015

FAPRI‐MU Report #01‐15

Prepared by the Integrated Policy Group, Division of Applied Social Sciences

www.fapri.missouri.edu

amap.missouri.edu

Agricultural 

Markets 

and Policy
Published by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri

(MU), 101 Park DeVille Drive, Suite E; Columbia, MO 65203. FAPRI–MU is part of the Division of

Applied Social Sciences (DASS) in the College of Agriculture, Food and Natural Resources (CAFNR).

www.fapri.missouri.edu   

This material is based upon work supported by the U.S. Department of Agriculture, under Agreement Nos.

58‐0111‐13‐002 and 58‐0111‐14‐001.  

Any opinion, findings, conclusions, or recommendations expressed in this publication are those of the

authors and do not necessarily reflect the view of the U.S. Department of Agriculture nor the University of

Missouri.

The crop, biofuel, government cost and farm income projections in this report were prepared by the

team at FAPRI‐MU, including  Pat Westhoff (westhoffp@missouri.edu), Scott Gerlt

(gerlts@missouri.edu), Jarrett Whistance (whistancejl@missouri.edu), Julian Binfield

(binfieldj@missouri.edu), Wyatt Thompson (thompsonw@missouri.edu), Sera Chiuchiarelli

(chiuchiarellis@missouri.edu) and Deepayan Debnath (debnathd@missouri.edu).   

The livestock, poultry, dairy and consumer price projections were prepared by the MU Agricultural

Markets and Policy (AMAP) team, including Scott Brown (brownsc@missouri.edu) and Daniel

Madison (madisondc@missouri.edu).   

FAPRI‐MU and AMAP are both part of the Integrated Policy Group in the MU Division of Applied

Social Sciences.

U.S. crop trade figures reported here were prepared with the help of Mike Helmar

(mhelmar@cabnr.unr.edu) at the University of Nevada, Reno, Eric Wailes (ewailes@uark.edu) and

Eddie C. Chavez (echavez@uark.edu) at the University of Arkansas and Darren Hudson

(Darren.hudson@ttu.edu) at Texas Tech University.

The Agricultural and Food Policy Center at Texas A&M University will prepare a companion set of

estimates of the farm‐level impacts of these projections (www.afpc.tamu.edu).

The authors would like to thank participants in a workshop reviewing a preliminary version of these

estimates in Washington in December 2014. Any remaining errors are those of the authors.

Permission is granted to reproduce this information with appropriate attribution to the authors and

FAPRI–MU.

The University of Missouri does not discriminate on the basis of race, color, religion, national origin, sex, sexual

orientation, gender identity, age, genetics information, disability or status as a protected veteran. For more

information, call Human Resource Services at 573‐882‐4256 or the US Department of Education, Office of Civil Rights.
Table of contents 

Summary ...................................................................................................................................... 1 

Crop production, prices and farm income .................................................................................... 3

New farm bill provisions and effects ............................................................................................. 4 

Livestock and dairy outlook highlights ......................................................................................... 5 

Other highlights: Biofuels, exports and food prices ...................................................................... 6 

Policy assumptions under the new farm bill ................................................................................. 7

Crop program participation under the new farm bill ..................................................................... 9 

Macroeconomic assumptions and farm prices paid .................................................................... 11 

Corn ........................................................................................................................................... 13 

Soybeans .................................................................................................................................. 15 

Wheat ........................................................................................................................................ 17 

Upland cotton ............................................................................................................................. 19 

Sorghum and barley ................................................................................................................... 21 

Oats and hay ............................................................................................................................. 23 

Rice and sugar ........................................................................................................................... 25 

Peanuts and sunflower seed ...................................................................................................... 27 

Land use .................................................................................................................................... 29 

Soybean products ...................................................................................................................... 31 

Corn products ........................................................................................................................... 33 

Ethanol and biofuel policies ...................................................................................................... 35 

Biomass-based diesel and biofuel plant returns ....................................................................... 37 

Cattle and hogs ......................................................................................................................... 39 

Meat .......................................................................................................................................... 41 

Dairy .......................................................................................................................................... 43 

Food prices and expenditures ................................................................................................... 45 

Government costs ..................................................................................................................... 47 

Payments and crop insurance .................................................................................................. 49 

Farm receipts and expenses ..................................................................................................... 51 

Farm income ............................................................................................................................. 53 

Ranges from the 500 alternative futures ................................................................................... 55
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 1

Summary

Lower prices have resulted in a large decline in crop producer income and could result in significant federal spending 

under new programs established by the 2014 farm bill. After reaching record levels in 2014, most livestock sector 

prices are also expected to decline in 2015. As a result, net farm income is projected to fall sharply.

These baseline projections for agricultural and biofuel markets were prepared using market information available in 

January 2015. Macroeconomic assumptions are based on forecasts by IHS Global Insight which suggest moderate 

growth in the U.S. and global economies. After declining sharply in late 2014, forecasted oil prices increase steadily.

The baseline incorporates the Agricultural Act of 2014 (the new farm bill). The analysis requires important 

assumptions about how people will respond to new program options. As more information becomes available, these 

assumptions and estimates will need to be revisited.

The figures reported here represent the average of 500 alternative outcomes based on different assumptions about 

the weather, oil prices and other factors. In some of the 500 outcomes, prices, quantities and values are much higher 

or much lower than the reported averages. 

Some key results:

• Record production of corn and soybeans in 2014 has pushed down prices of all major grains and oilseeds. 

• In response to lower expected prices, U.S. producers are projected to reduce corn, wheat and cotton acreage in 

2015, while slightly increasing soybean area. The total area devoted to major crops declines in 2015, but remains 

above the average that prevailed over the 2008-13 life of the previous farm bill.

• Average projected corn prices recover to $3.89 per bushel for the 2015/16 marketing year in response to reduced 

U.S. production. Wheat and soybean prices both fall in 2015/16, to $5.17 per bushel and $9.29 per bushel, 

respectively, given continued large global supplies.

• Between 2016/17 and 2024/25, corn prices average $4.06 per bushel and soybeans $10.09 per bushel, similar to 

projections made last year. Wheat prices average $5.57 per bushel, and cotton prices average 63 cents per pound. 

• Milk, hog and poultry prices are all projected to decline in 2015 as producers respond to lower feed costs and the 

record output prices of 2014 by significantly increasing production. Cattle and beef supplies remain tight in 2015, but 

prices begin to fall in 2016 as beef production starts to expand again.

• Lower prices translate into reduced farm income, as both crop and livestock cash receipts decline in 2015. Lower 

feed and fuel costs result in a modest reduction in total farm production expenses. Net farm income falls to $79 

billion, a 27 percent decline from 2014.

• Payments under 2014 farm bill programs increase when crop prices fall. A projected $3.9 billion in Agriculture Risk 

Coverage (ARC) and Price Loss Coverage (PLC) payments for the 2014 crop will be made after fiscal year (FY) 

2016 begins on October 1, 2015.

• Projected average ARC and PLC payments peak with the 2015 crop at about $6.5 billion, but decline to $3.4 billion 

for the 2018 crop. Actual ARC and PLC spending in any given year is likely to differ greatly from these projected 

averages, given price and yield volatility.

• Crop insurance net outlays are projected to average more than $8 billion per year over the next ten years. 

• Projected food price inflation drops to 1.6 percent in 2015, and averages 2 percent per year from 2016-2024.
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 2

Key results

2008/09Ȭ2013/14 2016/17Ȭ2024/25

Marketing year average 2014/15 2015/16 average

Crop prices

ȱȱȱCorn farm price, dollars per bushel 5.06 3.63 3.89 4.06

ȱȱȱS oybean farm price, dollars per bushel 11.79 10.02 9.29 10.09

ȱȱȱWheat farm price, dollars per bushel 6.54 6.13 5.17 5.57

ȱȱȱUpland co tton farm price, cents per pound 71.8 61.8 60.0 63.1

Crop area planted, million acres

ȱȱȱCorn 90.9 90.6 87.9 90.9

ȱȱȱS oybeans 76.6 83.7 84.2 83.4

ȱȱȱWheat 56.8 56.8 55.1 54.8

ȱȱȱUpland co tton 11.0 10.8 9.5 9.5

ȱȱȱ12 major c rops* 256.6 262.7 258.3 260.0

2008Ȭ2013 2016Ȭ2024

Calendar year except as noted average 2014 2015 average

Livestock sector prices

ȱȱȱFed steers, 5Ȭarea direc t, dollars per cwt 105.81 154.56 156.07 129.23

ȱȱȱBarrows and gilts, 51Ȭ52% lean, dollars per cwt 55.86 76.03 62.11 56.07

ȱȱȱNational wholesale broiler, cents per pound 84.32 104.87 94.53 95.55

ȱȱȱAll milk, dollars per cwt 17.78 23.97 17.59 18.68

Biofuel production, billion gallons

ȱȱȱEthanol 12.4 14.3 14.2 15.2

ȱȱȱȱȱȱCorn starchȬbased ethanol 12.1 14.2 14.0 14.9

ȱȱȱBiomassȬbased diesel 0.9 1.6 1.3 1.8

Government outlays, billion dollars, fiscal year

ȱȱȱCommodity Credit Corporation net outlays 9.4 12.2 7.7 8.0

ȱȱȱȱȱȱMajor commodity programs 5.9 5.1 1.6 5.0

ȱȱȱȱȱȱCRP, disaster and all o ther CCC net outlays 3.5 7.1 6.0 3.0

ȱȱȱCrop insurance net outlays 7.0 8.3 7.0 8.6

Net farm income, billion dollars 92.7 108.0 79.3 71.9

Annual consumer food price inflation 2.6% 2.4% 1.6% 2.0%

*Includes corn, soybeans, wheat, upland co tton, sorghum, barley, oats, rice, peanuts, sunflowers, sugarc ane and sugar

beets.

No te: The estimates are based on market information available in January 2015 and incorporate provisions o f the

Agricultural Act o f 2014, the new farm bill.ȱȱProjec tions are averages ac ross 500 outcomes.
U.S. producers harvested record corn 

and soybean crops in 2014.

Both crops saw record yields, and 

soybean area was also at an all-time high.

World production of both crops also 

increased in 2014, breaking records set in 

2013.

These large crops are the primary reason 

grain and oilseed prices have declined 

sharply from records set during the 

2012/13 marketing year.

Corn prices declined from $6.89 per 

bushel in 2012/13 to about half that level 

at harvest time last fall. 

If yields return to more normal levels in 

2015, corn prices may recover, but 

average projected prices remain below 

$4.00 per bushel until 2017/18.

Soybean and wheat prices have also 

declined since 2012/13, and both could 

drop again in 2015/16 in the face of 

continued large global supplies.

Nominal net farm income reached record 

highs in 2013. Net farm income declined in 

2014 because of lower crop prices.

In 2015, lower prices lead to a projected 

decline in both crop and livestock receipts.

Even though lower feed and fuel costs 

reduce production expenses, the sharp 

drop in receipts results in a 27 percent 

decline in net farm income in 2015.

Net farm income declines further from 

2016-2018, to levels not seen since 2009.

Crop production, prices and farm income

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 3

2014 corn and soybean crops set records

4.0

2.8

0.2

8.5

18.1

10.9

0 5 10 15 20 25

U.S. corn yield

U.S. corn production

World corn production

U.S. soybean yield

U.S. soybean production

World soybean production

Percent increase from previous record

Large crops result in lower prices

0

2

4

6

8

10

12

14

16

 06/07 08/09 10/11 12/13 14/15 16/17 18/19

Marketing year

Dollars per bushel

Soybeans Wheat Corn

Net farm income declines from 2013 record 

79

108

129

0

20

40

60

80

100

120

140

2006 2008 2010 2012 2014 2016 2018

Calendar year

Billion dollars
The baseline incorporates provisions of 

the Agricultural Act of 2014, the new farm 

bill. 

For crop producers, this includes the 

elimination of direct and countercyclical 

(DCP) payments and the average crop 

revenue election (ACRE) program.

It also includes the creation of two new 

options, price loss coverage (PLC) and 

agriculture risk coverage (ARC), as well as 

new crop insurance policies and more.

The new PLC and ARC programs cost 

little when crop prices and revenues are 

high, but could make large payments 

when prices or revenues are low.

Given all of the assumptions of the 

baseline, average PLC and ARC 

payments for the 2014-2018 crops are just 

under $5 billion per year.

ARC spending is greatest in 2015/16 but 

declines in later years as the moving 

averages that determine benchmark 

revenues adjust.

Crop insurance net outlays peaked in FY 

2013 because of 2012 drought losses. 

Projected crop insurance costs average $8 

billion per year from FY 2015-FY 2020.

Net Commodity Credit Corporation (CCC) 

outlays (covering commodity and disaster 

programs, the conservation reserve and 

more) reached $12 billion in FY 2014.

Projected net CCC outlays exceed $10 

billion again in FY 2017, when ARC and 

PLC payments associated with the 2015 

crop will be made.

New farm bill provisions and effects

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 4

Baseline incorporates 2014 farm bill provisions

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

 08/09 10/11 12/13 14/15 16/17 18/19

Marketing year

Dollars per bushel

Corn target/reference Corn loan Corn direct payment 

New crop payments replace DCP and ACRE

0

1

2

3

4

5

6

7

 08/09 10/11 12/13 14/15 16/17 18/19

Marketing year

Billion dollars

DCP and ACRE PLC ARC

Crop insurance costs can exceed other programs

0

2

4

6

8

10

12

14

16

2008 2010 2012 2014 2016 2018 2020

Fiscal year

Billion dollars

CCC net outlays Crop insurance net outlays
The combination of tight supply and 

strong domestic meat demand resulted in 

record prices for many livestock products 

in 2014.

The record output prices coincided with 

sharply lower feed costs, allowing for 

record high profitability for many producers 

in 2014.

Recent profitability levels follow what was 

a very difficult set of years financially for 

many producers for all or most of 2008-

2013.

Record levels of profitability will result in 

more meat production in coming years.

Pork and poultry production will increase 

in 2015 and 2016, as larger breeding 

herds and improved productivity combine 

for sharp increases in output.

It will take longer for beef production to 

increase due to the time required to raise 

a new animal to market weight once a 

decision has been made to expand output.

International dairy product prices 

decreased for most of 2014, as demand 

weakened and milk supplies recovered in 

many exporting nations.

U.S. product prices remained well above 

international levels for much of 2014, 

allowing for a record high all milk price 

near $24 per hundredweight.

U.S. prices have begun to decline in 

recent months, as markets catch up to the 

international supply and demand situation 

and domestic milk supplies increase.

Livestock and dairy outlook highlights

Weak international dairy markets affect milk price 

6

8

10

12

14

16

18

20

22

24

26

2002 2004 2006 2008 2010 2012 2014 2016

Dollars per hundredweight

U.S. all milk International dairy products (avg.)

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 5

Record high prices for cattle and hogs in 2014

0

40

80

120

160

200

240

280

2002 2004 2006 2008 2010 2012 2014 2016

Dollars per hundredweight

Fed steer Feeder steer Barrow and gilt

Meat production will grow, but at varying rates

-8

-6

-4

-2

0

2

4

6

2001-08 2009-13 2014 2015 2016 2017-24

Percent change vs. prior year

Beef Pork Chicken
Exports account for a much larger share 

of production for cotton, soybeans, wheat 

and rice than for corn, beef, pork or 

chicken.

Continued growth is expected in the 

share of beef, pork and chicken which is 

exported.

For corn and soybeans, the share 

exported would be larger if one considered 

exports of feeds, biofuels, vegetable oils, 

and other products derived from corn and 

soybeans.

Meat price inflation was much greater in 

2014 than inflation for other food items.

CPIs for beef (up 12.1 percent), pork 

(9.1) and eggs (8.4) far outpaced price 

increases for fruits and vegetables (1.5), 

cereal and bakery items (0.2) and sugar 

and sweets (-0.8). 

Although beef prices increase more than 

other food prices in 2015, the difference is 

much smaller than in 2014.

Other highlights: Biofuels, exports and food prices

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 6

Share of production exported varies

0%

10%

20%

30%

40%

50%

60%

70%

80%

Corn

Soybeans

Wheat

Rice

Cotton

Beef

Pork

Chicken

Exports/production 

2003-2004 2013-2014 2023-2024 

Ethanol production dips slightly in 2015 

due to tighter margins but resumes a path 

of modest growth in the years that follow.

In the near term, lower oil prices result in 

an increase in motor fuel use, so more 

ethanol can be used in 10 percent blends.

U.S. exports (right axis) are projected to 

grow steadily as U.S. ethanol prices 

remain competitive globally.

Results are sensitive to assumptions 

about implementation of the Renewable 

Fuel Standard (RFS).

Ethanol production and use grow slowly

0

2

4

6

8

10

12

14

16

18

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion gallons

0.0

0.3

0.6

0.9

1.2

1.5

1.8

2.1

2.4

2.7

Billion gallons

Production Domestic use Exports (right axis) 

Meat prices outpace other inflation one more year

-4

-2

0

2

4

6

8

2001-08 2009-13 2014 2015 2016 2017-24

Calendar year

Percent change vs. prior year

CPI for meat CPI for food General CPI
ARC is the other new option for grain and 

oilseed producers. Payments occur when 

county or farm-level revenues per acre fall 

below 86 percent of a benchmark.

The benchmark depends on moving fiveyear Olympic averages of national prices 

and county or farm yields.

To illustrate, consider a county where 

corn yields match the national average. At 

our average projected prices, the 2014-

2016 crops would earn ARC payments, 

but the 2017 and 2018 crops would not.

The 2014 farm bill reauthorizes and 

consolidates conservation programs.

The Conservation Reserve Program is 

operated by the Farm Service Agency and 

funded by the CCC.

The Environmental Quality Incentives 

Program and the Conservation 

Stewardship Program are operated by the 

Natural Resources Conservation Service.

Total projected spending on these 

programs is around $5 billion per year.

Policy assumptions under the new farm bill

Reference prices exceed old target prices

0

1

2

3

4

5

6

7

8

9

 08/09 10/11 12/13 14/15 16/17 18/19

Marketing year

Dollars per bushel

Soybeans Wheat Corn

The 2014 farm bill eliminates the DCP 

and ACRE programs and creates several 

new programs.

PLC is one new option for grain and 

oilseed producers. Participating producers 

receive a payment when national seasonaverage farm prices fall below fixed 

reference prices.

The new reference prices are higher than 

the target prices that were used in 

calculating countercyclical payments 

under the previous farm bill.

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 7

ARC benchmarks depend on moving averages

400

500

600

700

800

900

1,000

 08/09 10/11 12/13 14/15 16/17 18/19

Marketing year

Dollars per acre

Corn revenue 86% of benchmark 

Conservation programs total $5 billion per year

0

1

2

3

4

5

6

2008 2010 2012 2014 2016 2018

Fiscal year

Billion dollars

NRCS programs Conservation reserve 
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 8

Selected policy assumptions, 2014Ȭ2024

P olicy Description

Direc t, countercyclic al and No t available for 2014 and subsequent c rop years

ȱȱȱACRE payments

Price loss coverage Makes payments when marketing year average price falls below fixed reference prices:

ȱȱȱ(PLC) Corn $3.70/bu.

Soybeans $8.40/bu.

Wheat $5.50/bu.

Rice $14.00/cwt ($16.10/cwt for Japonic a)

Sorghum $3.95/bu.

Barley $4.95/bu.

Oats $2.40/bu.

Peanuts $535/ton

Sunflowers 20.15 cents/lb.

Co tton no t available

Paid on 85% o f base ac reage and program yields

Agriculture Risk Coverage Makes payments when county or farm perȬac re revenues fall below 86% o f a benchmark

ȱȱȱ(ARC) County option benchmark: 5Ȭyear Olympic average price multiplied by 5Ȭyear Olympic average yield

Farm option benchmark: 5Ȭyear Olympic average o f weighted farm revenue per ac re

Maximum payment is 10% o f benchmark value

Paid on 85% (county option) or 65% (farm option) o f base ac reage

Alternative to price loss coverage

Available for program c rops (no t upland co tton)

Sequestration Assumed to apply to PLC and ARC payments and certain conservation payments

Rate: 7.0% for 2015 c rop payments, declining to 5.8% for 2018Ȭ24 c rop payments

Marketing loan program Continues 2008 farm bill provisions for c rops o ther than upland co tton

Supplemental coverage option Available for program c rops no t enrolled in ARC beginning in 2015

Area c rop insurance available as a supplement to conventional insurance

Covers range between 86% and individual coverage level

65% o f premium subsidized

Upland co tton S tacked income pro tec tion program (STAX)

Area c rop insurance availabe in addition to conventional insurance

80% o f premium subsidized

Transition payment in 2014 (STAX no t available until 2015)

Loan rate varies in range dependng on recent world co tton prices

No co tton PLC or ARC programs

Former co tton base (nowȱȈgeneric baseȈ) eligible for PLC or ARC if planted to o ther c rops

Sugar Continues 2008 farm bill provisions

Incorporates stylized version o f agreement with Mexico

Conservation reserve Caps conservation reserve ac reage at 24 million ac res by 2017

Dairy Margin insurance program established

MILC no longer available

Dairy produc t price support program no t available for 2014 and subsequent years
For soybeans, expected average ARC 

payments exceed PLC payments for all 

five years of the 2014 farm bill.

Producers would also need to consider 

possible SCO benefits, which are only 

available to PLC participants.

Producers can enroll in the county-based 

ARC program, which pays on 85 percent 

of base area, or in the farm-based ARC, 

which considers all program crops on a 

farm and pays on 65 percent of base area.

Price expectations, yield histories and 

risk attitudes will affect producer 

enrollment choices.

Based in part on projected average 

payments, the baseline assumes most 

producers of wheat, sorghum, rice and 

peanuts will enroll in PLC.

Most soybean and corn producers are 

assumed to elect ARC. Of those enrolled 

in ARC, 90 percent are assumed to 

choose the county-based option.

Crop program participation under the new farm bill

Paths differ for projected average corn payments

0

5

10

15

20

25

30

35

40

45

 14/15 15/16 16/17 17/18 18/19

Marketing year

Dollars per acre

ARC PLC

Under the new farm bill, producers must 

make a one-time choice to participate in 

ARC or PLC for the 2014-2018 crops.

Projected national average ARC 

payments for corn producers exceed PLC 

payments for the first three years, but the 

opposite is true for the last two.

Expected payments may be very different 

in different counties. For example, high 

2014 yields may mean no 2014 crop ARC 

payments for corn in some counties. 

Greater PLC enrollment assumed for most crops

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Soybeans Corn Wheat Sorghum Rice Peanuts

PLC County ARC Farm ARC

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 9

Expected ARC payments exceed PLC for soybeans

0

5

10

15

20

25

30

 14/15 15/16 16/17 17/18 18/19

Marketing year

Dollars per acre

ARC PLC
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 10

ARC

PLC County Farm

Corn 40.0% 54.0% 6.0%

Soybeans 30.0% 63.0% 7.0%

Wheat 60.0% 36.0% 4.0%

Upland co tton n.a. n.a. n.a.

Sorghum 80.0% 18.0% 2.0%

Barley 75.0% 22.5% 2.5%

Oats 50.0% 45.0% 5.0%

Rice 90.0% 9.0% 1.0%

Peanuts 95.0% 4.5% 0.5%

ARC and PLC participation

(share of base acres)

ARC PLC

Corn $26.83 $19.92

S oybeans $16.91 $9.57

Wheat $11.16 $13.66

Upland co tton n.a. n.a.

S orghum $11.00 $20.82

Barley $10.09 $21.70

Oats $1.96 $1.38

Rice $4.19 $66.02

Peanuts $44.91 $138.38

Payments per participating

acre, 2014Ȭ2018 average
Oil prices declined sharply in the final 

months of 2014.

IHS Global Insight forecasts that oil 

prices will recover, exceeding $140 per 

barrel by 2024.

Futures markets in early March 2015 

suggested a much smaller increase.

Our stochastic simulations (see the end 

of this report) examine a range of energy 

prices around the IHS Global Insight 

figures.

Lower feed and fuel prices reduce farm 

production expenses in 2015.

Fertilizer prices are also expected to 

decline in 2015, offsetting cost increases 

for some other inputs.

Projected increases in fuel prices and 

general inflation in the economy contribute 

to an increase in overall farm input prices 

after 2017.

Macroeconomic assumptions and farm prices paid

Faster U.S. growth and low inflation expected in 2015

-4

-3

-2

-1

0

1

2

3

4

5

6

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Percent 

Real GDP growth 3-mo. Treasury bill CPI inflation 

IHS Global Insight forecasted in January 

that U.S. real GDP growth would 

accelerate in 2015 to 3.1 percent.

Growth averages 2.6 percent per year 

between 2016 and 2024.

Lower oil prices reduce inflation in 2015.

The unemployment rate continues to 

decline slowly.

Short-term interest rates increase to near 

pre-recession levels by 2017.

Lower feed, fuel prices reduce 2015 production costs

50

60

70

80

90

100

110

120

130

140

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Index, 2011 = 100

All production items Feed Fuel

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 11

Oil prices recover after sharp decline

0

20

40

60

80

100

120

140

160

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Dollars per barrel

IHSGI W. Texas Intermediate June futures, 3/3/2015
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 12

Macroeconomic assumptions

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Real GDP growth (Percentage change from previous year)

ȱȱȱUnited S tates 2.4 3.1 2.7 2.7 2.4 2.8 2.8 2.6 2.4 2.4 2.4

ȱȱȱChina 7.3 6.5 6.7 6.8 7.1 7.3 7.3 6.9 6.7 6.2 6.0

ȱȱȱWorld 2.7 3.0 3.4 3.5 3.6 3.7 3.8 3.7 3.6 3.5 3.4

Population growth

ȱȱȱUnited S tates 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.7

ȱȱȱWorld 1.1 1.1 1.1 1.1 1.0 1.0 1.0 1.0 0.9 0.9 0.9

U.S. CPI, all urban consumers 1.6 0.1 2.3 2.4 2.5 2.4 2.5 2.4 2.2 2.3 2.2

(Percent)

U.S. unemployment rate 6.2 5.5 5.3 5.2 5.3 5.3 5.1 5.0 5.1 5.1 5.1

3Ȭmonth Treasury bill rate 0.0 0.4 1.6 3.2 3.5 3.5 3.5 3.5 3.5 3.5 3.5

Prime interest rate 3.3 3.5 4.6 6.3 6.8 6.8 6.8 6.8 6.8 6.8 6.8

Petroleum prices (Dollars per barrel)

ȱȱWest Texas intermediate 93.01 58.24 71.07 80.64 89.90 98.69 109.47 119.86 126.36 133.40 141.39

ȱȱRefinersȇȱacquisition cost 91.54 55.71 68.16 77.25 86.18 94.93 105.58 115.63 121.69 128.46 136.16

Natural gas price (Dollars per million BTU)

ȱȱHenry Hub 4.37 3.73 3.85 4.25 4.54 4.60 4.83 4.70 4.56 4.75 4.83

Exchange rates (Currency per dollar)

ȱȱȱEuro 0.75 0.83 0.81 0.77 0.76 0.75 0.74 0.74 0.74 0.73 0.73

ȱȱȱChinese yuan 6.16 6.23 6.27 6.25 6.20 6.12 6.05 6.02 6.03 6.05 6.08

Source: IHS Global Insight, Jan. 2015, except exchange rates and nonȬU.S. economic and population growth are from IHS Global Insight, Dec. 2014.

Indices of prices paid by farmers

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

P roduction items, interest, (2011=100)

taxes and wages 112 109 109 110 112 114 117 120 122 124 127

ȱȱProduc tion items 113 110 109 109 111 113 116 119 121 122 124

ȱȱȱȱFeed 113 102 102 103 103 105 105 105 104 103 101

ȱȱȱȱLivestock & poultry 154 158 141 126 117 115 116 120 123 126 130

ȱȱȱȱSeeds 114 113 114 115 118 121 125 128 131 134 136

ȱȱȱȱFertilizer 96 91 89 89 90 93 96 97 96 96 95

Mixed fertilizer 87 85 84 84 85 87 90 91 90 89 88

Nitrogen fertilizer 104 95 92 91 93 97 100 101 100 99 98

Po tash and phosph. 100 99 98 98 99 101 104 105 105 106 106

ȱȱȱȱAgricultural chemic als 110 109 110 113 117 121 126 130 133 136 139

ȱȱȱȱFuels 98 76 81 87 94 101 110 118 123 129 135

ȱȱȱȱSupplies & repairs 106 108 109 111 113 115 118 120 122 123 125

ȱȱȱȱAutos & trucks 104 105 108 110 112 115 117 118 120 122 123

ȱȱȱȱFarm machinery 111 110 112 113 117 121 125 128 131 134 136

ȱȱȱȱBuilding material 107 107 110 113 115 117 119 120 121 123 124

ȱȱȱȱFarm services 109 110 113 116 120 124 128 132 136 140 144

ȱȱInterest* 101 103 107 114 117 119 122 125 127 130 133

ȱȱTaxes** 105 105 107 109 112 115 120 123 127 131 135

ȱȱWage rates 108 110 113 117 121 125 129 134 138 143 147

ȱȱ*Interest per ac re on farm real estate debt and interest rate on farm nonȬreal estate debt.

**Farm real estate taxes payable per ac re.
2014 is the second year in a row of 

record U.S. corn production. Although 

area was the lowest it has been since 

2010, yields were at an all-time high.

Corn production topped 14.2 billion 

bushels in 2014. This is a 32% increase 

from two years ago.

The larger corn crops in 2013 and 2014 

after three years of drought are the 

primary cause of lower corn prices.

High prices caused by the drought 

resulted in reduced use of corn during the 

2012/13 marketing year.

Increased production for the 2013/14 

marketing year allowed use to recover, 

and use remains largely flat for the 

2014/15 marketing year.

Ending stocks in 2014/15 increase for the 

second year in a row, putting downward 

pressure on prices for the near-term. 

The main source of demand growth into 

the future comes from export markets.

After several years of record returns, 

market revenues fell in 2013/14 and again 

in 2014/15. Lower prices more than offset 

the yield increases.

Variable expenses (which exclude land 

costs) fall in the short term as fertilizer and 

fuel prices moderate.

Projected farm program payments rise in 

the short term with the new farm bill and 

decreasing prices, but remain small 

relative to revenues.

Corn

Corn returns decline for a second straight year

0

200

400

600

800

1,000

1,200

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Dollars per acre

Market Program payments

Ins. net indemnities Variable expenses

Corn production sets record again in 2014/15

10

11

12

13

14

15

16

08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Billion bushels

Production Total use

Corn stocks increase again, other use remains flat

0

1

2

3

4

5

6

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Billion bushels

Feed & residual Ethanol & coproducts

Exports Ending stocks

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 13
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 14

Corn supply and use

SeptemberȬAugust year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 90.6 87.9 90.3 90.7 91.1 91.2 91.1 91.1 91.1 90.9 90.7

ȱȱȱHarvested area 83.1 80.2 82.3 82.7 83.0 83.1 83.1 83.1 83.0 82.9 82.7

(Bushels per harvested ac re)

Yield 171.0 165.1 167.0 168.7 170.2 171.9 173.8 175.5 176.9 178.4 180.4

(Million bushels)

Supply 15,472 15,152 15,466 15,706 15,885 16,027 16,173 16,337 16,491 16,638 16,840

ȱȱȱBeginning stocks 1,232 1,890 1,691 1,729 1,723 1,707 1,703 1,725 1,776 1,830 1,886

ȱȱȱProduc tion 14,216 13,237 13,751 13,952 14,137 14,295 14,444 14,587 14,690 14,783 14,928

ȱȱȱImports 25 25 25 25 25 25 25 25 25 25 25

Domestic use 11,831 11,707 11,888 12,016 12,089 12,128 12,183 12,221 12,231 12,244 12,266

ȱȱȱFeed and residual 5,278 5,162 5,284 5,312 5,321 5,311 5,283 5,271 5,269 5,286 5,314

ȱȱȱEthanol and coproduc ts 5,152 5,146 5,196 5,284 5,341 5,382 5,457 5,499 5,503 5,491 5,476

ȱȱȱHFCS 491 488 492 497 499 501 503 504 505 505 505

ȱȱȱSeed 22 23 23 23 23 23 23 23 23 23 23

ȱȱȱFood and o ther 888 887 894 900 904 910 917 924 932 939 947

Exports 1,751 1,755 1,849 1,967 2,089 2,196 2,265 2,341 2,429 2,507 2,592

Total use 13,582 13,462 13,737 13,983 14,178 14,324 14,447 14,561 14,660 14,752 14,858

Ending stocks 1,890 1,691 1,729 1,723 1,707 1,703 1,725 1,776 1,830 1,886 1,982

ȱȱȱCCC inventory 0 0 0 0 0 0 0 0 0 0 0

ȱȱȱUnder loan 179 167 175 168 157 153 154 163 170 177 196

ȱȱȱOther stocks 1,711 1,524 1,554 1,555 1,550 1,551 1,572 1,612 1,661 1,709 1,786

P rices, program provisions (Dollars per bushel)

ȱȱȱFarm price 3.63 3.89 3.90 4.01 4.12 4.17 4.18 4.16 4.07 4.01 3.90

ȱȱȱLoan rate 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95

ȱȱȱReference price 3.70 3.70 3.70 3.70 3.70 3.70 3.70 3.70 3.70 3.70 3.70

(Million ac res)

ȱȱȱBase area + alloc ated generic 90.7 90.6 90.7 90.8 90.8 90.8 90.8 90.8 90.8 90.7 90.7

(Bushels per ac re)

ȱȱȱPLC program yield 125.0 125.1 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0

(Percent)

ȱȱȱPLC participation rate 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0

ȱȱȱARC participation rate 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0

Returns and payments (Dollars)

ȱȱȱGross market revenue/a. 621.32 635.36 644.48 668.87 693.46 709.00 719.44 721.45 712.77 708.25 697.57

ȱȱȱVariable expenses/a. 363.63 350.34 346.64 349.70 356.79 367.47 380.24 390.50 395.49 399.53 403.15

ȱȱȱMarket net return/a. 257.69 285.03 297.84 319.17 336.66 341.53 339.20 330.95 317.27 308.72 294.42

ȱȱȱMarketing loan benefits/a.* 0.00 0.22 0.12 0.12 0.15 0.05 0.04 0.08 0.01 0.04 0.18

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 9.96 23.82 24.91 22.13 18.80 16.50 17.18 20.24 20.58 21.82 28.00

ȱȱȱȱȱȱARC/base a.* 42.64 38.83 29.39 13.60 9.69 8.50 10.29 12.44 13.92 15.71 17.90

ȱȱȱInsurance net indemnities/a.* 24.47 23.47 23.56 24.81 26.80 27.77 29.11 28.88 29.50 29.89 29.13

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.
The 2014 soybean crop exceeded the 

previous record by over 18%. This was 

achieved by both a record yield and area.

Soybean area is expected to set a new 

record in 2015 and remain high given 

strong global demand.

Even with increased use in 2014/15, the 

consumption of soybeans cannot match 

the record production. 

If yields decline to more normal levels in 

2015, production and use of soybeans 

may be in closer balance.

Increasing demand from China is the 

primary cause of increases in U.S. 

soybean exports.

Domestic soybean crush also increases 

in response to rising demand for U.S. 

soybean meal and soybean oil.

Ending stocks jump sharply in 2014/15 

after a very low carry-out in 2013/14. 

Prices have fallen sharply in 2014/15, 

and a smaller decline is expected in 

2015/16.

In 2014/15, the decrease in the soybean 

price is more than enough to offset the 

increased yield. This results in lower 

market returns.

Total and net returns decline again in 

2015/16, as prices decline and yields are 

assumed to return to the long-term trend.

Program payments with the new farm bill 

could increase in 2015/16, but continue to 

be small relative to soybean market 

returns.

Soybeans

Soybean ending stocks increase sharply

0.0

0.5

1.0

1.5

2.0

2.5

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Billion bushels

Crush Exports Ending stocks

Soybean returns dip in 2014/15

0

100

200

300

400

500

600

700

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Dollars per acre

Market Program payments

Ins. net indemnities Variable expenses

Soybean production sets record in 2014

2.0

2.5

3.0

3.5

4.0

4.5

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year 

Billion bushels

Production Total use

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 15
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 16

Soybean supply and use

SeptemberȬAugust year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 83.7 84.2 82.6 82.8 83.1 83.5 83.7 83.7 83.8 83.7 83.7

ȱȱȱHarvested area 83.1 83.4 81.8 82.0 82.3 82.7 82.9 82.9 83.0 82.9 82.9

(Bushels per harvested ac re)

Yield 47.8 44.5 45.0 45.4 45.8 46.2 46.6 47.0 47.4 47.7 48.1

(Million bushels)

Supply 4,076 4,121 4,105 4,124 4,141 4,184 4,224 4,256 4,294 4,329 4,371

ȱȱȱBeginning stocks 92 398 411 387 360 349 345 347 350 359 365

ȱȱȱProduc tion 3,969 3,708 3,679 3,722 3,766 3,820 3,865 3,893 3,930 3,955 3,991

ȱȱȱImports 15 15 15 15 15 15 15 15 15 15 15

Domestic use 1,905 1,949 1,955 1,962 1,963 1,969 1,993 2,005 2,023 2,052 2,077

ȱȱȱCrush 1,790 1,837 1,843 1,849 1,850 1,855 1,877 1,888 1,903 1,931 1,954

ȱȱȱSeed and residual 115 112 112 113 113 114 116 117 120 121 123

Exports 1,772 1,760 1,763 1,803 1,829 1,870 1,884 1,901 1,913 1,911 1,926

Total use 3,678 3,709 3,718 3,765 3,792 3,839 3,877 3,906 3,936 3,964 4,003

Ending stocks 398 411 387 360 349 345 347 350 359 365 368

ȱȱȱCCC inventory 0 0 0 0 0 0 0 0 0 0 0

ȱȱȱUnder loan 14 24 24 22 20 20 21 22 24 26 28

ȱȱȱOther stocks 384 387 363 338 328 324 327 328 334 339 340

P rices, program provisions (Dollars per bushel)

ȱȱȱFarm price 10.02 9.29 9.44 9.79 10.26 10.45 10.36 10.45 10.18 9.99 9.87

ȱȱȱIllinois processor price 10.35 9.75 9.90 10.24 10.69 10.88 10.79 10.87 10.61 10.44 10.32

ȱȱȱLoan rate 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00

ȱȱȱReference price 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40 8.40

(Million ac res)

ȱȱȱBase area + alloc ated generic 62.0 62.2 62.2 62.2 62.2 62.2 62.2 62.3 62.3 62.3 62.3

(Bushels per ac re)

ȱȱȱPLC program yield 37.4 37.4 37.4 37.4 37.4 37.4 37.4 37.4 37.4 37.4 37.4

(Percent)

ȱȱȱPLC participation rate 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0

ȱȱȱARC participation rate 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0

Returns and payments (Dollars)

ȱȱȱGross market revenue/a. 478.92 409.19 420.69 440.66 465.17 477.75 479.51 485.90 477.43 472.52 470.64

ȱȱȱVariable expenses/a. 185.14 180.74 182.23 185.20 188.89 193.15 198.61 203.43 206.63 209.75 212.61

ȱȱȱMarket net return/a. 293.77 228.46 238.46 255.47 276.28 284.61 280.90 282.47 270.81 262.77 258.03

ȱȱȱMarketing loan benefits/a.* 0.00 0.30 0.12 0.06 0.22 0.15 0.18 0.29 0.04 0.37 0.10

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 0.00 15.04 14.30 10.16 8.33 7.93 6.81 8.51 9.21 11.47 11.20

ȱȱȱȱȱȱARC/base a.* 8.46 26.88 23.10 16.24 9.85 6.82 6.52 8.16 9.84 11.10 11.29

ȱȱȱInsurance net indemnities/a.* 4.03 15.39 14.05 15.00 16.03 17.09 17.41 17.81 18.07 17.97 18.05

(Dollars per bushel)

Crush margin 1.99 1.82 1.76 1.75 1.70 1.66 1.78 1.72 1.71 1.80 1.77

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.
Unlike corn and soybeans, U.S. wheat 

yields were down in 2014, resulting in a 

second straight year of declining 

production. 

Even though projected planted wheat 

acreage is down in 2015, more typical 

weather might allow more of the crop to be 

harvested and yields to increase.

Imports, primarily from Canada, explain 

the continuing difference between 

production and total use.

The weakening of the corn price has led 

to less wheat being used for feed in 

2013/14 and 2014/15.

Exports declined sharply in 2014/15 

because of strong competition from other 

exporters and cheaper U.S. corn.

Exports slowly rebuild beginning in 

2015/16, but competing exporters will 

continue to capture most of the world 

wheat market.

Food use of wheat increases with 

population.

Although U.S. wheat production was 

down in 2014/15, abundant domestic 

supplies of other crops and plentiful 

foreign production suppressed the price.

Lower prices and yields result in reduced 

receipts in 2014/15. Projected prices and 

returns fall further in 2015/16.

Net returns to U.S. wheat producers 

remain well above pre-2007 levels.

Wheat

Wheat non-food use declines in 2014/15

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

June-May marketing year

Billion bushels

Exports Food use Feed & residual

Wheat net returns drop for three straight years

0

50

100

150

200

250

300

350

400

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

June-May marketing year

Dollars per acre

Market Program payments

Ins. net indemnities Variable expenses

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 17

Wheat production falls in 2014/15

1.6

1.8

2.0

2.2

2.4

2.6

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

June-May marketing year

Billion bushels

Production Total use
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 18

Wheat supply and use

JuneȬMay year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 56.8 55.1 54.1 54.5 54.7 54.7 54.9 55.0 54.8 55.0 55.1

ȱȱȱHarvested area 46.4 46.6 45.8 46.1 46.2 46.2 46.4 46.4 46.3 46.4 46.5

(Bushels per harvested ac re)

Yield 43.7 45.4 45.8 46.2 46.5 46.9 47.2 47.5 47.8 48.1 48.4

(Million bushels)

Supply 2,796 2,971 2,998 3,034 3,041 3,050 3,070 3,083 3,096 3,121 3,154

ȱȱȱBeginning stocks 590 683 727 728 715 705 699 698 704 713 727

ȱȱȱProduc tion 2,026 2,118 2,100 2,133 2,152 2,169 2,195 2,209 2,217 2,234 2,254

ȱȱȱImports 180 169 171 173 175 176 176 175 175 174 174

Domestic use 1,190 1,246 1,249 1,246 1,250 1,257 1,264 1,277 1,290 1,301 1,310

ȱȱȱFeed and residual 157 201 196 186 182 182 181 186 189 191 192

ȱȱȱSeed 73 72 73 74 74 74 74 75 75 75 75

ȱȱȱFood and o ther 960 972 980 986 994 1,001 1,008 1,017 1,026 1,034 1,043

Exports 923 998 1,021 1,073 1,087 1,094 1,107 1,101 1,094 1,093 1,104

Total use 2,113 2,243 2,270 2,319 2,336 2,351 2,371 2,378 2,384 2,394 2,414

Ending stocks 683 727 728 715 705 699 698 704 713 727 741

ȱȱȱCCC inventory 0 0 0 0 0 0 0 0 0 0 0

ȱȱȱUnder loan 23 40 40 36 34 33 33 34 36 39 41

ȱȱȱOther stocks 660 687 688 679 671 666 666 670 676 688 699

P rices, program provisions (Dollars per bushel)

ȱȱȱFarm price 6.13 5.17 5.28 5.48 5.66 5.77 5.81 5.70 5.59 5.46 5.36

ȱȱȱLoan rate 2.94 2.94 2.94 2.94 2.94 2.94 2.94 2.94 2.94 2.94 2.94

ȱȱȱReference price 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50 5.50

(Million ac res)

ȱȱȱBase area + alloc ated generic 73.8 73.8 73.7 73.7 73.7 73.7 73.7 73.8 73.8 73.8 73.8

(Bushels per ac re)

ȱȱȱPLC program yield 37.3 37.3 37.3 37.3 37.4 37.4 37.4 37.4 37.3 37.3 37.3

(Percent)

ȱȱȱPLC participation rate 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0

ȱȱȱARC participation rate 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0

Returns and payments (Dollars)

ȱȱȱGross market revenue/a. 267.76 233.97 241.26 252.97 262.89 269.94 273.74 270.54 267.05 262.51 259.14

ȱȱȱVariable expenses/a. 131.17 124.98 126.34 128.43 131.59 135.58 140.19 143.71 145.47 147.19 148.79

ȱȱȱMarket net return/a. 136.59 108.99 114.92 124.54 131.30 134.36 133.55 126.84 121.57 115.32 110.35

ȱȱȱMarketing loan benefits/a.* 0.00 0.27 0.46 0.25 0.51 0.53 0.44 0.38 0.40 0.77 1.26

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 0.00 19.14 19.97 15.35 13.86 13.33 12.53 13.41 15.40 17.32 18.85

ȱȱȱȱȱȱARC/base a.* 8.79 14.89 14.34 10.40 7.37 6.07 6.08 7.00 7.94 8.59 8.90

ȱȱȱInsurance net indemnities/a.* 21.02 18.04 11.36 12.02 12.65 13.10 13.34 13.44 13.33 13.07 13.27

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.
Upland cotton acreage is likely to fall 

sharply in 2015, given low cotton returns in 

absolute terms and relative to competing 

crops.

Large international stocks limit export and 

price prospects. Domestic mill use is 

relatively flat and accounts for a small 

share of total use of U.S. cotton. 

U.S. cotton competes well on quality 

terms, supporting export sales.

China continues to be the main source of 

uncertainty in world cotton markets.

China’s end-of-year cotton stocks are 

now almost twice as large as the amount 

of cotton China produces or uses each 

year.

Recent policy changes in China should 

end stock accumulation, but it is not clear 

when and how existing stocks will be 

reduced.

Cotton revenues per acre harvested fall 

in 2014/15, as both prices and yields 

decline.

Cotton returns stay below 2013/14 levels 

through the baseline.

Cotton prices sometimes drop enough to 

trigger marketing loan benefits.

Transition payments provide support in 

2014, and a new crop insurance program, 

STAX, is available in 2015.

Upland cotton

Cotton acreage, production fall in 2015

0

5

10

15

20

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

August-July marketing year

Million bales

Production Use Ending stocks

China's cotton stocks remain a source of uncertainty

0

10

20

30

40

50

60

70

 08/09 10/11 12/13 14/15

August-July marketing year

Million bales

Production Domestic use Ending stocks Imports

Cotton profit margins remain tight

0

200

400

600

800

1,000

1,200

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

August-July marketing year

Dollars per acre

Market Program payments

Ins. net indemnities Variable expenses

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 19
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 20

Upland cotton supply and use

AugustȬJuly year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 10.85 9.54 9.64 9.83 9.65 9.46 9.37 9.37 9.48 9.50 9.53

ȱȱȱHarvested area 9.52 7.92 7.97 8.14 7.98 7.84 7.76 7.75 7.84 7.88 7.90

(Pounds per harvested ac re)

Yield 781 799 806 816 826 833 841 850 859 867 876

(Million bales)

Supply 17.83 17.75 18.14 18.65 18.67 18.48 18.45 18.59 18.92 19.04 19.34

ȱȱȱBeginning stocks 2.33 4.53 4.71 4.77 4.90 4.83 4.81 4.82 4.84 4.76 4.88

ȱȱȱProduc tion 15.50 13.21 13.42 13.88 13.76 13.65 13.64 13.77 14.07 14.28 14.46

ȱȱȱImports 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

Domestic mill use 3.76 3.88 3.95 3.98 3.97 3.93 3.89 3.85 3.80 3.76 3.71

Exports 9.54 9.16 9.42 9.77 9.87 9.74 9.74 9.90 10.36 10.41 10.73

Total use 13.30 13.04 13.37 13.76 13.84 13.67 13.63 13.75 14.16 14.16 14.44

Ending stocks 4.53 4.71 4.77 4.90 4.83 4.81 4.82 4.84 4.76 4.88 4.90

ȱȱȱCCC inventory 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

ȱȱȱOther stocks 4.53 4.71 4.77 4.90 4.83 4.81 4.82 4.84 4.76 4.88 4.90

P rices, program provisions (Cents per pound)

ȱȱȱFarm price 61.8 60.0 60.3 60.3 62.0 62.8 63.2 63.8 65.2 64.7 65.2

ȱȱȱAdjusted world price 48.7 50.6 51.1 51.3 53.9 54.4 54.8 55.5 58.0 57.2 58.1

ȱȱȱLoan rate 52.0 52.0 49.0 49.1 49.2 49.3 49.9 49.9 49.9 50.3 50.4

(Dollars per ton)

ȱȱȱCo ttonseed price 199.69 191.66 188.50 192.36 200.06 203.98 204.83 203.64 198.88 195.86 192.40

(Million ac res)

ȱȱȱBase area n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Returns and payments (Dollars)

ȱȱȱGross market revenue/a. 594.30 586.57 592.84 603.32 630.06 644.27 655.52 665.07 681.78 681.43 690.35

ȱȱȱVariable expenses/a. 523.10 503.88 509.17 521.12 536.12 552.26 572.40 587.68 597.29 608.65 618.68

ȱȱȱMarket net return/a. 71.20 82.69 83.67 82.20 93.94 92.01 83.12 77.39 84.49 72.78 71.67

ȱȱȱMarketing loan benefits/a.* 53.50 71.31 58.56 58.50 44.62 43.62 43.04 42.91 31.86 35.90 31.55

ȱȱȱTransition payments/base a.* 33.33 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

ȱȱȱInsurance net indemnities/a. 40.53 44.29 49.49 49.53 50.40 52.22 53.55 54.35 55.65 56.22 56.91

*Marketing loan benefits, transition payments and insurance net indemnities are averaged ac ross all ac res.

All projec tions are averages ac ross 500 stochastic outcomes.
U.S. sorghum production rebounded in 

2013 and 2014. Stronger export demand 

helps sustain the higher production levels.

China accounts for the big increase in 

sorghum exports. This has allowed 

sorghum to sell at a premium to corn in 

2014/15.

The baseline assumes China’s demand 

for sorghum imports will abate enough that 

sorghum prices will return to a more 

typical relationship to corn prices. There 

are no guarantees this will occur.

As with several other crops, sorghum 

returns have been declining since 

2012/13. 

Projected average sorghum prices are 

near or below the levels that trigger PLC 

payments.

Higher PLC participation rates for 

sorghum allow more acres to be eligible 

for SCO, thereby increasing crop 

insurance net indemnities.

Unlike other crops, barley returns have 

remained strong, dipping only slightly in 

2014/15.

Like sorghum, average barley projected 

prices are near or below levels that trigger 

PLC payments.

High expected PLC payments discourage 

ARC participation and encourage SCO 

enrollment.

Sorghum and barley

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 21

Sorghum production and exports increase in 2013/14

0

100

200

300

400

500

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Million bushels

Production Domestic use Exports

Sorghum returns

0

100

200

300

400

500

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Dollars per acre

Market Program payments

Ins. net indemnities Variable expenses

Barley returns

0

100

200

300

400

500

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

June-May marketing year

Dollars per acre

Market Program payments

Ins. net indemnities Variable expenses
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 22

Sorghum supply and use

SeptemberȬAugust year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 7.14 7.56 7.60 7.57 7.56 7.55 7.53 7.53 7.53 7.56 7.58

ȱȱȱHarvested area 6.40 6.16 6.18 6.16 6.16 6.14 6.13 6.14 6.14 6.15 6.17

(Bushels per harvested ac re)

Yield 67.6 62.8 62.8 63.0 62.9 62.9 63.1 63.0 62.9 62.5 62.5

Supply and use (Million bushels)

ȱȱȱProduc tion 433 388 390 390 389 388 388 389 388 387 388

ȱȱȱImports 0 0 0 0 0 0 0 0 0 0 0

ȱȱȱDomestic use 167 166 171 173 172 172 171 170 167 164 159

ȱȱȱExports 269 225 218 218 217 215 217 217 220 222 227

ȱȱȱEnding stocks 31 27 28 27 27 27 28 29 30 31 33

P rices, returns and payments (Dollars)

ȱȱȱFarm price/bu. 3.80 3.62 3.67 3.76 3.86 3.89 3.88 3.86 3.80 3.76 3.71

ȱȱȱMarket net return/a. 107.74 81.80 84.93 89.11 90.91 87.78 83.47 76.99 71.19 66.33 60.50

ȱȱȱMarketing loan benefits/a.* 0.00 0.44 0.55 0.28 0.36 0.38 0.27 0.20 0.23 0.17 0.24

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 7.71 26.79 24.95 23.84 20.82 20.09 20.38 23.01 22.63 23.80 26.01

ȱȱȱȱȱȱARC/base a.* 11.26 17.81 11.94 7.23 6.76 6.76 6.76 7.45 8.18 8.64 9.22

ȱȱȱInsurance net indemnities/a.* 6.63 18.73 15.73 15.93 16.85 16.60 16.07 15.68 15.63 15.26 15.33

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.

Barley supply and use

JuneȬMay year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 2.98 3.33 3.43 3.39 3.33 3.29 3.27 3.21 3.17 3.06 2.99

ȱȱȱHarvested area 2.44 2.87 2.95 2.91 2.85 2.82 2.80 2.76 2.72 2.62 2.56

(Bushels per harvested ac re)

Yield 72.4 71.8 72.5 73.2 73.7 74.2 75.0 75.8 76.7 77.5 78.4

Supply and use (Million bushels)

ȱȱȱProduc tion 177 206 214 214 211 210 211 209 209 203 201

ȱȱȱImports 35 30 21 20 20 20 21 22 23 25 26

ȱȱȱDomestic use 202 216 213 212 211 209 211 210 212 210 209

ȱȱȱExports 10 14 19 21 21 21 20 19 18 17 16

ȱȱȱEnding stocks 83 90 93 93 92 92 93 95 96 96 98

P rices, returns and payments (Dollars)

ȱȱȱAll barley farm price/bu. 5.30 4.61 4.57 4.64 4.76 4.90 4.87 4.85 4.70 4.64 4.60

ȱȱȱFeed barley price/bu. 3.41 3.23 3.21 3.29 3.39 3.48 3.47 3.45 3.35 3.29 3.23

ȱȱȱMarket net return/a. 185.12 140.19 138.98 144.54 151.39 157.46 152.66 148.57 139.62 136.05 134.16

ȱȱȱMarketing loan benefits/a.* 0.00 0.58 1.13 1.18 0.92 0.60 0.59 0.90 0.98 0.73 1.60

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 0.00 25.14 29.68 29.06 24.61 22.60 23.66 25.94 27.55 28.13 31.37

ȱȱȱȱȱȱARC/base a.* 3.13 12.66 13.30 12.58 8.79 6.81 7.57 8.00 9.21 9.36 9.99

ȱȱȱInsurance net indemnities/a.* 11.13 12.08 10.57 11.30 12.11 12.16 12.58 12.62 12.75 12.08 11.85

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.
Reduced total supplies have helped keep 

oat prices from falling as much as prices 

for corn and sorghum since 2012/13.

Prices of all the major coarse grains 

move together in the baseline.

Projected prices for oats remain around 

$3.00 per bushel, and projected program 

payments are smaller than for other 

program crops.

Hay yields and production increased in 

2013 and 2014 after the drought-reduced 

hay crop of 2012.

Hay production is expected to increase 

as lower returns for other crops allow land 

to revert to hay and cattle numbers 

increase.

Increased production in 2013 and 2014 

allowed stocks to rebuild.

National average hay prices have 

declined in recent months to the lowest 

levels in four years.

If production and stocks rebuild as 

projected, national average hay prices 

could continue to drop to about $150 per 

ton.

Hay markets are particularly fragmented. 

National average prices might not reflect 

local conditions.

Oats and hay

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 23

Hay stocks stay high

0

20

40

60

80

100

120

140

160

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

May-April marketing year

Million tons

Production Disappearance Ending stocks

Hay prices decline with increased production

80

100

120

140

160

180

200

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

May-April marketing year

Dollars per ton

All hay price

Oat prices decline less than corn

0

1

2

3

4

5

6

7

8

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

Marketing year

Dollars per bushel

All barley Corn Sorghum Oats
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 24

Oats supply and use

JuneȬMay year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 2.72 2.60 2.61 2.60 2.59 2.56 2.55 2.57 2.59 2.62 2.64

ȱȱȱHarvested area 1.03 1.01 1.01 0.99 0.98 0.96 0.96 0.96 0.97 0.98 0.99

(Bushels per harvested ac re)

Yield 67.7 64.4 65.0 65.7 66.2 66.6 67.2 67.7 68.2 68.5 68.9

Supply and use (Million bushels)

ȱȱȱProduc tion 70 66 66 66 65 64 65 65 66 68 69

ȱȱȱImports 100 98 97 98 98 98 98 97 96 95 94

ȱȱȱDomestic use 162 160 160 161 161 161 160 160 160 160 159

ȱȱȱExports 2 2 2 2 2 2 2 2 2 2 2

ȱȱȱEnding stocks 31 32 33 33 33 33 33 34 35 36 37

P rices, returns and payments (Dollars)

ȱȱȱFarm price/bu. 3.25 2.92 2.92 2.97 3.03 3.06 3.08 3.07 3.03 2.98 2.95

ȱȱȱMarket net return/a. 104.65 79.04 81.75 85.06 87.28 86.86 85.83 82.61 80.07 76.54 73.43

ȱȱȱMarketing loan benefits/a.* 0.00 0.00 0.03 0.01 0.03 0.00 0.00 0.01 0.00 0.00 0.00

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 0.00 1.27 2.25 1.70 1.69 1.29 1.26 1.44 1.61 1.58 2.27

ȱȱȱȱȱȱARC/base a.* 0.15 2.54 2.50 2.58 2.02 1.77 1.58 1.66 1.80 1.89 1.96

ȱȱȱInsurance net indemnities/a.* 0.23 2.12 1.90 1.95 1.93 1.90 1.96 1.87 1.85 1.85 1.86

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.

Hay supply and use

MayȬApril year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

(Million ac res)

Harvested area 56.8 58.5 58.4 58.4 58.7 59.0 59.1 59.1 59.1 59.0 58.9

(Tons per ac re)

Yield 2.46 2.41 2.42 2.43 2.43 2.44 2.45 2.46 2.47 2.48 2.48

Supply and use (Million tons)

ȱȱȱProduc tion 139.8 141.0 141.2 141.8 142.8 144.0 145.0 145.6 145.8 146.0 146.2

ȱȱȱDisappearance 136.0 139.2 141.1 142.3 143.2 144.1 144.8 145.2 145.4 145.5 145.7

ȱȱȱEnding stocks 22.9 24.7 24.8 24.3 23.9 23.8 24.0 24.3 24.8 25.3 25.8

(Dollars per ton)

All hay farm price 174.92 152.95 149.02 154.69 161.76 165.31 165.98 164.45 161.99 159.76 156.96
Long grain rice area and production 

increased in 2014, and competitor rice 

prices remained below U.S. prices.

As a result, long grain rice prices drop 

below $13 per hundredweight in 2014/15. 

Projected prices are steady for 2015-2024.

Japonica rice, produced in California, 

commands a large premium to other 

classes of rice. 

Future production and prices of Japonica 

rice depend on water availability.

High prices and yields resulted in record 

levels of per-acre revenues for U.S. rice 

producers in 2013/14.

Declines in rice prices in 2014/15 and 

2015/16 reduce producer returns.

Projected average long grain rice prices 

drop below the levels that trigger PLC 

payments.

Despite a dip in 2015/16, sugar prices 

remain above the low prices experienced 

in 2012/13.

The U.S.-Mexico agreement on sugar 

trade is incorporated in this baseline, 

resulting in lower expected exports from 

Mexico to the U.S.

Average sugar prices remain above loan 

rates, but there are a few stochastic 

outcomes in which prices fall to support 

levels in years with big crops.

Rice and sugar

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 25

Long grain rice prices remain near 2014/15 level

0

5

10

15

20

25

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

August-July marketing year 

Dollars per hundredweight

Long grain Japonica Other medium/short

Rice returns peak in 2013/14, then decline

0

200

400

600

800

1,000

1,200

1,400

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

August-July marketing year

Dollars per acre

Market Program payments

Ins. net indemnities Variable expenses

Sugar prices remain above recent lows

0

10

20

30

40

50

60

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

October-September marketing year

Cents per pound

Refined beet sugar Raw cane sugar
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 26

Rice supply and use

AugustȬJuly year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 2.94 2.80 2.91 2.92 2.91 2.86 2.84 2.82 2.82 2.82 2.82

ȱȱȱHarvested area 2.92 2.78 2.89 2.90 2.89 2.84 2.81 2.80 2.79 2.80 2.80

(Pounds per harvested ac re)

Yield 7,572 7,523 7,618 7,694 7,760 7,816 7,873 7,939 8,005 8,067 8,130

Supply and use (Million hundredweight)

ȱȱȱProduc tion 221.0 209.3 220.1 223.2 224.2 222.2 221.6 222.2 223.6 225.7 227.8

ȱȱȱImports 22.1 23.2 23.6 24.2 24.8 25.3 25.9 26.3 26.7 27.1 27.4

ȱȱȱDomestic use 131.1 132.8 133.6 135.0 136.0 137.4 138.7 140.1 141.4 142.8 144.1

ȱȱȱExports 103.5 100.7 107.9 110.6 112.1 110.7 109.5 109.0 109.1 109.8 110.8

ȱȱȱEnding stocks 40.4 39.4 41.5 43.3 44.2 43.6 42.9 42.4 42.2 42.4 42.8

P rices, returns and payments (Dollars)

ȱȱȱFarm price/cwt. 13.87 13.86 13.72 13.71 13.74 13.82 13.90 13.91 13.85 13.84 13.88

ȱȱȱȱȱȱLong grain 12.22 12.31 12.43 12.38 12.50 12.54 12.57 12.55 12.51 12.46 12.50

ȱȱȱȱȱȱJaponic a 20.24 18.73 18.55 18.53 18.57 18.68 18.80 18.81 18.73 18.71 18.76

ȱȱȱȱȱȱOther medium/short 14.88 14.41 14.27 14.25 14.28 14.37 14.46 14.47 14.41 14.39 14.43

ȱȱȱMarket net return/a. 464.21 502.78 494.67 486.40 476.92 468.26 455.53 442.30 433.19 426.03 424.67

ȱȱȱMarketing loan benefits/a.* 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 66.40 67.12 65.29 67.49 63.79 62.69 60.69 62.80 64.50 65.04 64.33

ȱȱȱȱȱȱARC/base a.* 0.23 2.18 7.25 6.45 4.86 3.61 3.62 4.31 4.49 4.99 5.07

ȱȱȱInsurance net indemnities/a.* 43.38 19.37 19.73 19.50 19.10 18.63 18.38 18.27 18.19 18.39 18.25

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.

Sugar supply and use

Oc toberȬSeptember year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱSugar c ane harvested 0.829 0.864 0.841 0.831 0.824 0.814 0.804 0.796 0.789 0.783 0.777

ȱȱȱSugar beet planted 1.162 1.252 1.204 1.225 1.227 1.214 1.209 1.202 1.202 1.198 1.197

ȱȱȱSugar beet harvested 1.147 1.222 1.175 1.196 1.198 1.185 1.180 1.173 1.174 1.170 1.169

Supply and use (Thousand tons)

ȱȱȱProduc tion 8,609 9,207 9,005 9,161 9,263 9,279 9,325 9,354 9,429 9,478 9,569

ȱȱȱȱȱCane sugar 3,739 3,817 3,733 3,705 3,692 3,669 3,641 3,616 3,594 3,577 3,572

ȱȱȱȱȱBeet sugar 4,869 5,390 5,272 5,456 5,571 5,611 5,685 5,738 5,835 5,901 5,997

ȱȱȱImports 3,557 3,457 3,362 3,378 3,405 3,457 3,512 3,571 3,629 3,689 3,751

ȱȱȱDomestic use 12,127 12,202 12,217 12,282 12,396 12,478 12,572 12,659 12,781 12,899 13,044

ȱȱȱExports 250 250 251 250 250 249 249 249 249 249 249

ȱȱȱEnding stocks 1,584 1,796 1,696 1,703 1,725 1,734 1,750 1,766 1,794 1,813 1,840

P rices (Cents per pound)

ȱȱȱN.Y. spo t raw sugar 27.26 24.26 25.69 26.54 26.66 26.97 27.13 27.16 26.94 26.89 26.66

ȱȱȱRefined beet sugar 36.48 32.26 34.18 35.31 35.40 35.78 35.93 35.93 35.55 35.43 35.05
After the record crop of 2012, producers 

sharply reduced peanut area and 

production in 2013. 2014 production 

reverted to the long-term average.

Peanut yields were above the long-term 

trend for the third straight year in 2014. 

2015 area is expected to increase as 

prices for competing crops weaken. More 

typical yields would offset this effect on 

production.

Peanut returns have declined from the 

record levels of 2012/13.

With average projected market prices 

significantly below the reference price, 

PLC payments could be quite large for 

peanuts. 

PLC payments are tied to base acres. 

Only in the case of generic base (former 

cotton base acreage) do actual plantings 

affect PLC payments.

Sunflower seed prices declined in 

2013/14 in response to larger global 

oilseed supplies and lower vegetable oil 

prices.

In 2014/15, a further decline in sunflower 

seed prices was offset by a recovery in 

average yields, so returns are largely 

unchanged.

Projected average sunflower seed prices 

are below the reference price.

Peanuts and sunflower seed

Reduced production draws down peanut stocks

0

1

2

3

4

5

6

7

8

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

August-July marketing year

Billion pounds

Production Use Ending stocks

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 27

Peanut payments represent a higher share of income

0

200

400

600

800

1,000

1,200

1,400

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

August-July marketing year

Dollars per acre

Market Program payments Variable expenses

Sunflower returns also decline with lower prices

0

50

100

150

200

250

300

350

400

450

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

Septermber-August marketing year

Dollars per acre

Market Program payments Variable expenses
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 28

Peanut supply and use

AugustȬJuly year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 1.35 1.41 1.46 1.46 1.43 1.41 1.41 1.41 1.42 1.42 1.40

ȱȱȱHarvested area 1.33 1.37 1.42 1.42 1.40 1.38 1.37 1.38 1.38 1.39 1.37

(Pounds per harvested ac re)

Yield 3,932 3,771 3,827 3,882 3,936 3,991 4,045 4,100 4,151 4,202 4,253

Supply and use (Million pounds)

ȱȱȱProduc tion 5,210 5,178 5,443 5,525 5,494 5,502 5,562 5,650 5,749 5,829 5,829

ȱȱȱImports 65 65 65 65 65 65 65 65 65 65 65

ȱȱȱDomestic use 4,122 4,155 4,287 4,375 4,417 4,444 4,483 4,539 4,606 4,671 4,710

ȱȱȱExports 1,052 1,056 1,108 1,148 1,143 1,129 1,133 1,142 1,157 1,170 1,163

ȱȱȱEnding stocks 1,960 1,992 2,105 2,172 2,172 2,166 2,176 2,210 2,261 2,313 2,334

P rices, returns and payments (Dollars)

ȱȱȱFarm price/ton 428.08 437.75 413.50 398.59 407.30 416.41 421.41 417.94 407.56 396.52 397.43

ȱȱȱMarket net return/a. 278.69 275.02 232.67 205.22 220.78 233.68 233.75 223.41 203.91 183.55 188.63

ȱȱȱMarketing loan benefits/a.* 0.00 42.42 85.36 96.72 96.29 84.89 90.62 106.54 124.84 129.92 128.56

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 142.09 127.71 136.88 147.09 138.12 135.87 133.69 132.51 132.09 142.12 145.02

ȱȱȱȱȱȱARC/base a.* 29.62 45.18 54.70 52.85 42.21 39.19 37.51 38.22 39.09 42.45 45.20

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.

Sunflower seed supply and use

SeptemberȬAugust year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

Area (Million ac res)

ȱȱȱPlanted area 1.56 1.70 1.74 1.74 1.74 1.71 1.70 1.69 1.67 1.65 1.64

ȱȱȱHarvested area 1.51 1.57 1.61 1.61 1.61 1.59 1.57 1.56 1.54 1.53 1.52

(Pounds per harvested ac re)

Yield 1,469 1,551 1,558 1,570 1,574 1,580 1,589 1,596 1,598 1,605 1,615

Supply and use (Million pounds)

ȱȱȱProduc tion 2,215 2,447 2,512 2,531 2,535 2,512 2,506 2,499 2,467 2,455 2,452

ȱȱȱImports 130 130 130 130 130 130 130 130 130 130 130

ȱȱȱDomestic use 2,013 2,094 2,149 2,168 2,172 2,162 2,181 2,217 2,237 2,270 2,303

ȱȱȱExports 354 455 484 494 494 479 451 406 356 307 273

ȱȱȱEnding stocks 178 206 215 214 214 214 219 225 230 237 243

P rices, returns and payments (Dollars)

ȱȱȱFarm price/lb. 0.205 0.196 0.198 0.204 0.208 0.211 0.212 0.211 0.208 0.206 0.205

ȱȱȱMarket net return/a. 145.62 151.30 154.05 163.44 167.90 169.61 168.89 164.38 158.48 153.08 151.19

ȱȱȱMarketing loan benefits/a.* 0.00 0.04 0.13 0.01 0.07 0.16 0.13 0.10 0.03 0.08 0.10

ȱȱȱPayments to participants

ȱȱȱȱȱȱPLC/base a.* 0.06 16.84 17.02 14.25 12.76 11.05 10.88 12.81 13.23 14.41 14.36

ȱȱȱȱȱȱARC/base a.* 5.73 10.04 8.05 5.36 4.19 4.14 4.99 5.70 6.60 7.11 6.90

*Marketing loan benefits and insurance net indemnities are averaged ac ross all ac res. PLC and ARC payments are per participating ac re.

All projec tions are averages ac ross 500 stochastic outcomes.
Land use

Corn area falls in 2015, soybean area increases

40

50

60

70

80

90

100

110

2008 2010 2012 2014 2016 2018 2020 2022 2024

Year crops harvested 

Million acres

Corn Soybeans Wheat

Cotton acreage planted decreases in 2015

0

2

4

6

8

10

12

14

16

2008 2010 2012 2014 2016 2018 2020 2022 2024

Year crops harvested 

Million acres

Upland cotton Sorghum Rice

Lower corn prices lead to a reduction in 

corn area planted in 2015.

Soybean area increased sharply in 2014, 

and is projected to set another record high 

in 2015.

Wheat area is likely to decrease in 2015, 

as USDA reports that winter wheat 

seedings were down by 2 million acres.

Low prices and returns will likely reduce 

the total amount of land devoted to corn 

and soybeans in 2015.

Cotton acreage increased slightly in 

2014, but declines in 2015 because of 

weak returns.

Sorghum acreage is projected to 

increase slightly in 2015 in response to 

strong prices relative to other crops.

Continued drought in California coupled 

with lower prices elsewhere push rice 

acreage down in the short-tem.

Land planted to 12 major crops increased 

in 2014 as soybean area increased by 

about 7 million acres. 

Lower expected returns in 2015 put 

downward pressure on area.

The CRP cap is lower under the new 

farm bill, allowing more potential acres for 

crop production.

12 crop planted area likely to fall

220

240

260

280

300

320

340

360

2008 2010 2012 2014 2016 2018 2020 2022 2024

Year crops harvested

Million acres

12 crops 12 crops + hay + CRP - double-crop

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 29
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 30

Land use for major crops and the conservation reserve

Marketing year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

P lanted area (Million ac res)

ȱȱCorn 90.60 87.92 90.29 90.70 91.05 91.21 91.14 91.13 91.09 90.92 90.71

ȱȱSoybeans 83.70 84.17 82.59 82.80 83.10 83.53 83.66 83.68 83.79 83.71 83.74

ȱȱWheat 56.82 55.06 54.11 54.50 54.69 54.74 54.94 54.96 54.85 54.97 55.08

ȱȱUpland co tton 10.85 9.54 9.64 9.83 9.65 9.46 9.37 9.37 9.48 9.50 9.53

ȱȱSorghum 7.14 7.56 7.60 7.57 7.56 7.55 7.53 7.53 7.53 7.56 7.58

ȱȱBarley 2.98 3.33 3.43 3.39 3.33 3.29 3.27 3.21 3.17 3.06 2.99

ȱȱOats 2.72 2.60 2.61 2.60 2.59 2.56 2.55 2.57 2.59 2.62 2.64

ȱȱRice 2.94 2.80 2.91 2.92 2.91 2.86 2.84 2.82 2.82 2.82 2.82

ȱȱSunflowers 1.56 1.70 1.74 1.74 1.74 1.71 1.70 1.69 1.67 1.65 1.64

ȱȱPeanuts 1.35 1.41 1.46 1.46 1.43 1.41 1.41 1.41 1.42 1.42 1.40

ȱȱSugar beets 1.16 1.25 1.20 1.22 1.23 1.21 1.21 1.20 1.20 1.20 1.20

ȱȱSugar c ane (harvested) 0.88 0.92 0.89 0.88 0.87 0.86 0.85 0.84 0.84 0.83 0.82

12 crop planted area 262.70 258.26 258.47 259.63 260.14 260.40 260.47 260.43 260.44 260.26 260.15

Hay (harvested) 56.84 58.46 58.37 58.44 58.68 58.96 59.12 59.13 59.06 58.99 58.92

12 crops + hay 319.53 316.72 316.84 318.06 318.82 319.36 319.59 319.56 319.50 319.24 319.07

Conservation reserve (CRP ) 25.45 24.21 23.94 22.89 22.86 22.84 22.82 22.81 22.80 22.79 22.77

12 crops + hay + CRP 344.98 340.93 340.78 340.95 341.68 342.20 342.41 342.37 342.29 342.04 341.85

DoubleȬcrop soybeans 5.61 5.09 4.94 4.99 5.05 5.09 5.10 5.08 5.05 5.01 4.98

12 crops + hay + CRP 339.37 335.84 335.84 335.97 336.64 337.11 337.30 337.29 337.24 337.03 336.87

ȱȱȬȱdoubleȬcrop soybeans
Future biodiesel use of soybean oil is 

constrained by competition from corn oil 

and other biodiesel feedstocks.

Per-capita domestic use of soybean oil 

for purposes other than biofuel production 

remains around 43 pounds per year 

between 2014/15 and 2024/25.

Soybean oil exports increase after 2020. 

Foreign use of vegetable oil in fuel 

increases because of rising petroleum 

prices.

Stagnant livestock and poultry production 

and competition from distillers grains have 

limited domestic use of soybean meal in 

recent years.

Projected increases in soybean meal use 

result from resumed growth in poultry and 

pork production and slower expansion of 

distillers grains use.

Soybean meal exports remain stable as 

growing world demand is met by 

Argentina and other competitors.

Soybean meal and oil prices have 

declined in 2014/15 because of large 

global oilseed supplies, and a further 

decline in 2015/16 is projected.

After 2020, vegetable oil prices are 

supported by rising petroleum prices.

Projected crushing margins (the 

difference between the value of soybean 

meal and oil and the cost of soybeans) 

average $1.75 per bushel from 2015-2024. 

This is slightly less than the 2011-2014 

average.

Soybean products

Expansion in biodiesel use of soybean oil ends

0

2

4

6

8

10

12

14

16

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

October-September marketing year

Billion pounds

Domestic food use Biodiesel use Exports

Soybean meal use grows with livestock production

0

5

10

15

20

25

30

35

40

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

October-September marketing year

Million tons

Domestic use Exports

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 31

Soybean meal and oil prices fall in 2014/15, 2015/16

0

100

200

300

400

500

600

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

October-September marketing year

Dollars per ton

0

10

20

30

40

50

60

Cents per pound

Soybean meal Soybean oil (right axis)
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 32

Soybean oil supply and use

Oc toberȬSeptember year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

(Million pounds)

Supply 21,999 22,879 23,244 23,353 23,422 23,522 23,827 23,934 24,125 24,464 24,741

ȱȱȱBeginning stocks 1,165 1,429 1,724 1,763 1,819 1,869 1,919 1,900 1,907 1,926 1,934

ȱȱȱProduc tion 20,674 21,290 21,361 21,430 21,443 21,494 21,748 21,874 22,058 22,378 22,647

ȱȱȱImports 160 160 160 160 160 160 160 160 160 160 160

Domestic use 18,476 19,201 19,555 19,949 19,744 19,737 19,968 19,888 19,900 19,974 20,023

ȱȱȱBiodiesel 4,651 5,110 5,372 5,670 5,366 5,236 5,381 5,244 5,174 5,165 5,161

ȱȱȱFood and o ther 13,825 14,091 14,183 14,278 14,378 14,501 14,587 14,644 14,726 14,809 14,862

Exports 2,094 1,955 1,926 1,586 1,810 1,866 1,958 2,139 2,298 2,556 2,772

Total use 20,570 21,156 21,481 21,534 21,553 21,603 21,927 22,027 22,199 22,530 22,796

Ending stocks 1,429 1,724 1,763 1,819 1,869 1,919 1,900 1,907 1,926 1,934 1,945

P rice (Cents per pound)

ȱȱȱDec atur 32.77 30.50 31.64 32.28 32.84 32.97 34.04 34.84 34.93 35.02 35.63

Soybean meal supply and use

Oc toberȬSeptember year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

(Thousand tons)

Supply 43,548 44,282 44,431 44,578 44,603 44,705 45,229 45,495 45,877 46,543 47,099

ȱȱȱBeginning stocks 250 299 303 308 307 305 306 313 318 325 330

ȱȱȱProduc tion 43,048 43,733 43,878 44,020 44,046 44,151 44,673 44,932 45,310 45,968 46,519

ȱȱȱImports 250 250 250 250 250 250 250 250 250 250 250

Domestic use 30,357 31,706 32,563 32,770 32,801 32,973 33,294 33,634 34,310 34,805 35,364

Exports 12,892 12,273 11,560 11,501 11,498 11,426 11,623 11,543 11,242 11,408 11,398

Total use 43,249 43,979 44,123 44,271 44,299 44,399 44,916 45,177 45,552 46,213 46,763

Ending stocks 299 303 308 307 305 306 313 318 325 330 337

P rice (Dollars per ton)

ȱȱȱDec atur, 48% pro tein 355.76 337.65 335.61 346.32 360.88 366.46 362.48 359.34 347.67 343.58 334.37
Corn products

Along with conventional ethanol 

production, there is modest growth in 

distillers dried grains with solubles 

(DDGS) production.

Domestic use is sustained by rising 

livestock feed demand overall, but limited 

by competition from other feeds.

Net exports remain flat throughout the 

projection period. Disputes regarding 

approved corn varieties make DDGS 

exports to China a key source of 

uncertainty.

Prices for DDGS generally move with 

corn prices and slightly exceed them in 

the projection period.

Export demand lends support to DDGS 

prices. China is a major source of 

uncertainty for U.S. exports and prices.

Wet mills produce ethanol, HFCS and 

other products including food-grade corn 

oil. Dry mills can extract nonfood-grade 

corn oil from distillers grains.

The baseline projects a further increase 

in the share of dry mill ethanol plants that 

extract corn oil.

The oil removed in dry mill plants is used 

in feed rations and biodiesel production. 

A growing share of corn oil goes to these 

nonfood uses.

Distillers grains production expands with ethanol

0

5

10

15

20

25

30

35

40

45

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Million tons

Distillers, brewers grains production Domestic use Net exports

DDGS prices generally follow corn prices

0

50

100

150

200

250

300

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

September-August marketing year

Dollars per ton

Corn DDGS Corn gluten feed 

Nonfood uses of corn oil increase

0

1

2

3

4

5

6

7

8

9

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

October-September marketing year

Billion pounds

Food and other Feed Biodiesel Net exports

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 33
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 34

Corn product supply and use

Marketing year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

HighȬfructose corn syrup (Thousand tons, Oc t.ȬSep. year)

ȱȱProduc tion 8,630 8,601 8,682 8,791 8,840 8,897 8,946 8,998 9,019 9,047 9,059

ȱȱDomestic use 7,367 7,328 7,363 7,430 7,436 7,455 7,465 7,479 7,461 7,450 7,423

ȱȱNet exports 1,263 1,273 1,319 1,361 1,404 1,442 1,481 1,519 1,558 1,597 1,636

(Cents per pound, Oc t.ȬSep. year)

ȱȱPrice, 42% Midwest 23.11 22.55 23.11 23.72 23.80 24.06 24.15 24.10 23.94 23.93 23.73

ȱȱHFCS price/ref. sugar price 63% 70% 68% 67% 67% 67% 67% 67% 67% 68% 68%

Distillers, brewers grains (Thousand tons, Sep.ȬAug. year)

ȱȱProduc tion (dry equiv.) 38,882 38,648 38,839 39,668 40,367 40,914 41,581 41,939 41,966 41,844 41,661

ȱȱDomestic use 27,609 27,338 27,559 28,402 29,114 29,651 30,278 30,606 30,604 30,472 30,272

ȱȱNet exports 11,273 11,310 11,280 11,266 11,253 11,263 11,303 11,333 11,363 11,372 11,389

(Dollars per ton, Sep.ȬAug. year)

ȱȱPrice, IL points 144.18 147.82 149.15 153.68 158.61 160.69 159.57 158.26 154.37 152.46 148.82

ȱȱDDGS price/corn price 111% 106% 107% 107% 108% 108% 107% 106% 106% 106% 107%

Corn gluten feed (Thousand tons, Sep.ȬAug. year)

ȱȱProduc tion 8,803 8,894 9,075 9,036 8,890 8,770 8,772 8,809 8,856 8,919 9,000

ȱȱDomestic use 7,852 7,942 8,122 8,062 7,906 7,790 7,799 7,861 7,944 8,025 8,136

ȱȱNet exports 952 953 953 974 984 979 973 948 912 894 864

(Dollars per ton, Sep.ȬAug. year)

ȱȱPrice, 21%, IL points 125.04 126.04 125.06 124.92 125.71 126.09 125.22 125.35 124.70 123.64 122.53

ȱȱCGF price/corn price 96% 91% 90% 87% 86% 85% 84% 84% 86% 86% 88%

Corn gluten meal (Thousand tons, Sep.ȬAug. year)

ȱȱProduc tion 2,317 2,341 2,388 2,378 2,339 2,308 2,309 2,318 2,331 2,347 2,368

ȱȱDomestic use 1,209 1,216 1,251 1,236 1,194 1,155 1,144 1,143 1,142 1,147 1,156

ȱȱNet exports 1,108 1,125 1,137 1,142 1,146 1,153 1,164 1,175 1,189 1,200 1,212

(Dollars per ton, Sep.ȬAug. year)

ȱȱPrice, 60%, IL points 496.96 475.13 472.10 485.20 503.38 510.73 506.15 502.41 488.42 483.42 472.21

ȱȱCGM price/soymeal price 140% 141% 141% 140% 139% 139% 140% 140% 140% 141% 141%

Corn oil (Million pounds, Oc t.ȬSep. year)

ȱȱProduc tion 5,515 6,204 6,662 7,133 7,415 7,513 7,598 7,651 7,667 7,669 7,670

ȱȱDomestic use 4,412 5,085 5,567 6,038 6,333 6,439 6,530 6,585 6,600 6,603 6,606

ȱȱȱȱBiodiesel 893 768 1,439 1,681 1,951 2,055 2,120 2,178 2,176 2,206 2,267

ȱȱȱȱFeed 1,127 2,436 2,136 2,344 2,562 2,688 2,699 2,722 2,761 2,751 2,712

ȱȱȱȱFood/o ther 2,393 1,881 1,992 2,013 1,819 1,696 1,712 1,685 1,664 1,646 1,626

ȱȱNet exports 1,068 1,077 1,075 1,073 1,071 1,070 1,067 1,065 1,066 1,066 1,065

ȱȱEnding stocks 199 241 261 283 295 299 301 301 302 302 300

(Cents per pound, Oc t.ȬSep. year)

ȱȱChic ago price 34.49 32.11 33.04 33.71 34.37 34.59 35.64 36.40 36.44 36.48 37.01

ȱȱCorn oil price/soyoil price 105% 105% 104% 104% 105% 105% 105% 104% 104% 104% 104%
Ethanol and biofuel policy

Record margins in 2014 led to a recovery 

in ethanol production relative to 2012 and 

2013.

Production is projected to decline slightly 

in 2015 as margins become tighter.

Beyond 2015, ethanol production grows 

slowly as RFS requirements increase and 

production margins recover.

Cellulosic and non-corn ethanol 

production levels contribute relatively 

minor quantities to the total. 

Sugarcane ethanol imports from Brazil 

continue at a very low level in 2015 before 

climbing in 2016. 

Growing RFS requirements for advanced 

biofuel and low-carbon fuel requirements 

in California motivate sugar-based ethanol 

imports at modest levels.

Exports rebounded in 2014 and continue 

steady growth with domestic conventional 

ethanol prices competitive in the global 

market.

RFS percent requirements are unknown. 

These projections assume growth to 10 

percent of motor fuel use.

Declining motor fuel use in later years 

implies a slight decline in volume 

requirements.

Biomass-based diesel requirements 

remain slightly above 1.28 billion gallons 

based on estimated motor fuel use.

RIN prices increase in the near term 

before declining in later years as market 

conditions make the RFS easier to meet.

Ethanol production resumes modest growth

0

2

4

6

8

10

12

14

16

18

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion gallons

Corn starch ethanol production Other ethanol production

RFS volume requirements hold steady 

0

5

10

15

20

2012 2014 2016 2018 2020 2022 2024

Calendar year 

Billion gallons (ethanol eqv.)

Conventional gap Advanced gap Biomass-based diesel Cellulosic

Steady growth in U.S. ethanol export demand

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion gallons

Imports Exports

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 35
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 36

Ethanol supply and use

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

P etroleum fuel prices (Dollars per barrel)

ȱȱPetroleum, W. Texas interm. 93.01 58.24 71.07 80.64 89.90 98.69 109.47 119.86 126.36 133.40 141.39

ȱȱPetroleum, refinersȇȱacquis. 91.54 55.71 68.16 77.25 86.18 94.93 105.58 115.63 121.69 128.46 136.16

(Dollars per gallon)

ȱȱUnl. gasoline, FOB Omaha 2.66 1.71 1.94 2.14 2.36 2.58 2.86 3.13 3.31 3.49 3.68

ȱȱUnleaded gasoline, retail 3.37 2.37 2.63 2.83 3.04 3.26 3.53 3.79 3.96 4.14 4.33

(Million gallons)

Motor gasoline use* 137,460 138,364 139,662 140,666 140,464 139,462 137,726 135,463 133,042 130,615 128,257

Ethanol supply and use

ȱȱProduc tion 14,334 14,190 14,375 14,669 14,922 15,075 15,222 15,466 15,606 15,733 15,905

ȱȱȱȱȱFrom corn 14,175 14,047 14,194 14,449 14,674 14,806 14,935 15,156 15,269 15,365 15,500

ȱȱȱȱȱOther conventional 158 137 156 169 173 171 170 170 175 183 194

ȱȱȱȱȱCellulosic 1 6 26 52 75 97 117 139 162 186 210

ȱȱImports 60 45 267 299 302 298 321 293 270 281 316

ȱȱDomestic disappearance 13,481 13,369 13,750 14,031 14,211 14,311 14,419 14,576 14,669 14,766 14,952

ȱȱExports 811 861 887 930 1,005 1,053 1,115 1,174 1,197 1,238 1,260

ȱȱEnding stocks 791 797 803 810 819 827 836 846 855 865 875

Ethanol prices (Dollars per gallon)

ȱȱConventional rack, Omaha 2.34 1.77 1.88 1.93 1.95 1.96 1.98 1.99 2.00 2.03 2.06

ȱȱOther advanced rack 2.40 1.77 1.88 1.93 1.95 1.96 1.98 1.99 2.00 2.03 2.06

ȱȱEffec tive retail 2.56 1.89 1.84 1.91 2.00 2.10 2.25 2.37 2.48 2.58 2.66

ȱȱEthanol/gasoline retail 76% 80% 70% 68% 66% 64% 64% 62% 62% 62% 62%

RIN values

ȱȱConventional ethanol 0.49 0.55 0.73 0.71 0.64 0.54 0.39 0.28 0.18 0.10 0.05

ȱȱAdvanced ethanol 0.54 0.55 0.73 0.71 0.64 0.54 0.39 0.28 0.18 0.10 0.05

* Includes fuel ethanol

Renewable Fuel Standard

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Applicable percent standard

Overall 9.50% 9.55% 9.35% 9.48% 9.63% 9.73% 9.80% 9.85% 9.90% 9.95% 10.00%

ȱȱAdvanced bio fuels 1.33% 1.35% 1.38% 1.40% 1.42% 1.44% 1.47% 1.49% 1.51% 1.53% 1.56%

ȱȱȱȱCellulosic bio fuel 0.01% 0.02% 0.05% 0.07% 0.09% 0.11% 0.13% 0.14% 0.16% 0.18% 0.18%

ȱȱȱȱBiomassȬbased diesel 1.13% 1.13% 1.13% 1.13% 1.13% 1.13% 1.13% 1.13% 1.13% 1.13% 1.13%

Required volume (Million gallons)

Overall 16,231 16,717 16,437 16,800 17,070 17,188 17,157 17,053 16,953 16,842 16,722

ȱȱAdvanced bio fuels 2,095 2,368 2,418 2,475 2,516 2,547 2,565 2,575 2,586 2,594 2,600

ȱȱȱȱCellulosic bio fuel 33 38 62 100 129 156 181 208 237 265 295

ȱȱȱȱBiomassȬbased diesel 1,321 1,319 1,325 1,335 1,335 1,330 1,319 1,305 1,290 1,275 1,260

Gaps: Conventional 14,136 14,349 14,018 14,325 14,554 14,641 14,591 14,477 14,367 14,248 14,122

ȱȱȱȱȱȱȱȱȱȱAdvanced 80 351 368 374 385 396 405 410 414 416 415
Biomass-based diesel and biofuel plant returns

The outlook assumes the RFS percent 

requirements for biomass-based diesel 

remain at 1.13 percent going forward. This 

implies a volume requirement slightly 

above 1.28 billion gallons.

Biomass-based diesel production falls 

further in 2015 without the blenders tax 

credit in place but recovers in later years 

to meet RFS requirements.

Corn oil based biodiesel and renewable 

diesel production increase from their 

current levels.

Domestic biomass-based diesel use falls 

just below the RFS requirement in 2015. 

RIN stocks are used to make up the 

difference.

In later years, biomass-based diesel is 

used beyond its own requirement to help 

meet the advanced or overall mandates.

The U.S. remains a small net importer of 

biomass-based diesel in the near term, 

but is projected to be a small net exporter 

in later years.

Average dry mill ethanol net returns over 

operating costs fall sharply in 2015 before 

recovering in 2016.

Biomass-based diesel net returns 

continue their descent in 2015 without the 

blenders tax credit in place. They recover 

in 2016 and remain near the level of dry 

mill net returns.

RFS implementation and the costs of 

selling larger volumes of fuels with more 

than 10 percent ethanol remain important 

sources of uncertainty.

Biomass-based diesel production recovers 

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion gallons

Soy oil Corn oil Other fats/oils Renewable diesel Cellulosic diesel

Biomass-based diesel use exceeds RFS mandate

0.0

0.5

1.0

1.5

2.0

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion gallons

RFS requirement Domestic use

 Biofuel net returns hold steady beyond 2016

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Dollars per gallon

Dry mill ethanol Soy oil biodiesel

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 37
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 38

BiomassȬbased diesel sector

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

BiomassȬbased diesel supply (Million gallons)

ȱȱProduc tion 1,617 1,260 1,594 1,699 1,799 1,832 1,866 1,890 1,873 1,885 1,921

ȱȱȱȱFrom soybean oil 585 619 663 680 690 674 673 663 635 633 648

ȱȱȱȱFrom corn oil 116 100 187 218 253 267 275 283 283 286 294

ȱȱȱȱFrom o ther fats and oils 530 307 373 381 395 405 417 426 427 431 439

ȱȱȱȱFrom cellulosic diesel 0 0 2 9 12 15 18 21 24 27 30

ȱȱRenewable diesel 387 234 368 411 449 471 483 496 504 508 510

BiomassȬbased diesel use

ȱȱDomestic disappearance 1,768 1,296 1,711 1,780 1,830 1,842 1,869 1,847 1,803 1,820 1,883

ȱȱNet exports Ȭ96 Ȭ109 Ȭ105 Ȭ76 Ȭ29 Ȭ9 Ȭ4 43 70 65 38

ȱȱEnding stocks 136 208 196 191 190 189 189 189 189 189 189

Fuel prices and tax credit (Dollars per gallon)

ȱȱȱBiodiesel, rack 3.47 3.04 3.21 3.34 3.42 3.47 3.50 3.60 3.64 3.68 3.73

ȱȱȱ#2 Diesel, refiner sales 2.81 1.86 2.10 2.29 2.51 2.73 3.01 3.28 3.46 3.64 3.84

ȱȱȱ#2 Diesel, retail 3.83 2.83 3.20 3.40 3.62 3.84 4.12 4.39 4.56 4.74 4.94

ȱȱȱBiodiesel tax c redit 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

RIN values

ȱȱPer RIN gallon 0.56 0.55 0.73 0.71 0.64 0.54 0.39 0.28 0.18 0.10 0.05

ȱȱPer phyisc al gallon 0.84 0.82 1.09 1.06 0.96 0.80 0.59 0.42 0.27 0.15 0.07

Biofuel plant returns

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Biodiesel costs and returns (Dollars per gallon)

ȱȱȱBiodiesel value 3.47 3.04 3.21 3.34 3.42 3.47 3.50 3.60 3.64 3.68 3.73

ȱȱȱGlycerin value 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11

ȱȱȱS oyoil cost Ȭ2.84 Ȭ2.47 Ȭ2.35 Ȭ2.44 Ȭ2.51 Ȭ2.55 Ȭ2.57 Ȭ2.66 Ȭ2.71 Ȭ2.73 Ȭ2.74

ȱȱȱOther operating costs Ȭ0.57 Ȭ0.58 Ȭ0.58 Ȭ0.59 Ȭ0.59 Ȭ0.60 Ȭ0.61 Ȭ0.61 Ȭ0.62 Ȭ0.62 Ȭ0.63

ȱȱȱNet operating return 0.17 0.10 0.39 0.41 0.43 0.43 0.43 0.44 0.43 0.44 0.46

Corn milling for ethanol (Million bushels)

ȱȱȱCorn wet milled for ethanol 576 482 548 555 527 497 475 468 464 468 486

ȱȱȱCorn dry milled for ethanol 4,662 4,644 4,624 4,700 4,800 4,868 4,927 5,004 5,039 5,060 5,082

ȱȱȱȱȱ(Share deȬoiling DDGS) 89% 92% 94% 95% 96% 97% 98% 98% 98% 98% 98%

Dry mill ethanol costs, returns (Dollars per gallon)

ȱȱȱȱȱEthanol value 2.34 1.77 1.88 1.93 1.95 1.96 1.98 1.99 2.00 2.03 2.06

ȱȱȱȱȱDistillers grains value 0.51 0.43 0.44 0.44 0.46 0.47 0.47 0.47 0.46 0.45 0.44

ȱȱȱȱȱCorn oil value* 0.07 0.04 0.06 0.05 0.05 0.06 0.05 0.06 0.06 0.06 0.06

ȱȱȱȱȱCorn cost Ȭ1.50 Ȭ1.36 Ȭ1.42 Ȭ1.43 Ȭ1.47 Ȭ1.50 Ȭ1.51 Ȭ1.50 Ȭ1.49 Ȭ1.46 Ȭ1.42

ȱȱȱȱȱFuel and elec tricity cost Ȭ0.20 Ȭ0.20 Ȭ0.18 Ȭ0.19 Ȭ0.21 Ȭ0.21 Ȭ0.22 Ȭ0.21 Ȭ0.21 Ȭ0.22 Ȭ0.22

ȱȱȱȱȱOther operating costs Ȭ0.34 Ȭ0.34 Ȭ0.35 Ȭ0.35 Ȭ0.35 Ȭ0.36 Ȭ0.36 Ȭ0.36 Ȭ0.37 Ȭ0.37 Ȭ0.37

ȱȱȱȱȱNet operating return 0.88 0.35 0.44 0.46 0.44 0.42 0.41 0.43 0.46 0.50 0.55

* Weighted by share o f dry mills deȬoiling DDGs
The annual cattle inventory report 

released by USDA in early 2015 showed a 

2.1 percent increase in beef cows, only the 

third annual increase since 1996 and the 

largest increase since 1994.

Further increases are expected due to 

strong profitability levels and improved 

pasture conditions.

Despite the expected growth, the beef 

cow herd will still remain smaller than the 

levels seen prior to 2010.

The December 2014 quarterly hog 

inventory report noted a sharp increase in 

the U.S. sow herd.

The 3.7 percent year-over-year increase 

is the largest in more than 16 years.

Farrow-finish profitability was strongly 

positive throughout 2014, and as returns 

are projected to be positive in 2015, 

further growth in the herd is expected.

The porcine epidemic diarrhea virus 

(PEDv) greatly impacted the number of 

pigs saved per litter in the first half of 

2014.

Disease impacts have waned recently, 

and in the absence of a further significant 

outbreak, the amount of pork produced per 

sow is expected to stabilize in 2015 and 

return to normal growth in 2016.

The combination of a larger sow herd and 

more pork production per sow will result in 

a sharply higher pork supply.

Cattle and hogs

The beef cow herd increased during 2014

28

29

30

31

32

33

2008 2010 2012 2014 2016 2018 2020 2022 2024

Million head (Jan. 1) 

Beef cow inventory

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 39

Pork productivity begins to recover in 2015

3,600

3,800

4,000

4,200

4,400

4,600

4,800

5,000

2008 2010 2012 2014 2016 2018 2020 2022 2024

Pounds 

Pork production per sow

Sow inventory grows by largest amount since 1998

5.6

5.7

5.8

5.9

6.0

6.1

6.2

6.3

2008 2010 2012 2014 2016 2018 2020 2022 2024

Million head (Dec. 1 prior year) 

Sow inventory
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 40

Cattle and hogs

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

CATTLE (Million head)

Beef cows (Jan. 1) 29.0 29.6 30.5 31.0 31.2 31.3 31.1 30.9 30.6 30.5 30.3

Dairy cows (Jan. 1) 9.2 9.3 9.4 9.4 9.4 9.3 9.3 9.3 9.3 9.3 9.4

Cattle and c alves (Jan. 1) 87.7 88.3 90.5 93.2 94.9 95.2 94.8 93.9 93.0 92.4 92.1

Cattle on feed (Jan. 1) 12.7 12.7 12.6 13.0 13.6 14.0 14.1 14.0 13.9 13.7 13.5

Calf c rop 33.5 34.1 34.9 35.3 35.5 35.5 35.4 35.1 35.0 34.8 34.7

Cattle slaughter 30.9 30.0 30.3 31.7 33.1 34.0 34.3 34.0 33.6 33.3 32.9

Cattle imports 2.3 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2

Cattle exports 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

P rices

ȱȱTo tal all grades, (Dollars per hundredweight)

ȱȱȱȱȱ5ȬArea direc t steers 154.56 156.07 149.83 136.29 126.33 121.87 121.62 123.68 126.24 127.89 129.31

ȱȱ600ȱȬȱ650 #, Oklahoma City

ȱȱȱȱȱFeeder steers 225.21 234.16 219.45 191.68 170.55 159.74 157.87 161.80 167.23 171.53 175.05

ȱȱUtility cows, Sioux Falls 104.10 107.09 97.81 85.31 77.83 74.14 73.85 74.94 76.64 77.40 77.99

CowȬcalf returns (Dollars per cow)

ȱȱReceipts 1,173.71 1,216.35 1,136.58 998.09 896.88 845.27 836.81 855.25 880.95 900.55 916.56

ȱȱFeed expenses 246.01 241.75 251.91 254.68 261.88 268.21 270.01 268.62 266.17 262.69 260.09

ȱȱNonȬfeed expenses 519.38 526.85 537.83 541.24 540.43 544.18 552.62 561.94 569.04 575.98 582.73

ȱȱNet returns 408.31 447.75 346.84 202.17 94.57 32.88 14.18 24.70 45.73 61.88 73.73

HOGS (Million head)

Hogs for breeding (Dec. 1*) 5.76 5.97 6.19 6.19 6.07 5.93 5.82 5.75 5.74 5.76 5.80

Market hogs (Dec. 1*) 59.0 60.1 64.4 67.4 67.9 67.3 66.6 66.2 66.4 67.2 68.1

Sows farrowed 11.35 11.89 12.15 12.10 11.88 11.66 11.52 11.48 11.53 11.63 11.73

Pig c rop 112.7 121.8 127.8 129.3 128.6 127.5 127.2 128.0 129.9 132.2 134.6

Barrow and gilt slaughter 103.8 109.4 116.3 120.0 120.4 119.6 119.1 119.4 120.5 122.5 124.6

Hog imports 4.9 5.1 5.1 5.2 5.2 5.3 5.3 5.4 5.4 5.4 5.4

Hog exports 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

P rices

ȱȱNatl. base 51Ȭ52% lean equiv. (Dollars per hundredweight)

ȱȱȱȱȱBarrows & gilts 76.03 62.11 54.91 51.77 52.49 54.72 57.13 58.76 59.16 58.24 57.49

ȱȱIAȬS. Minn. #1Ȭ2, 300Ȭ400 #

ȱȱȱȱȱS ows 73.52 55.07 49.34 47.08 47.70 49.54 51.60 52.87 53.30 52.69 52.28

FarrowȬfinish returns (Dollars per hundredweight)

ȱȱReceipts 81.23 66.51 58.96 55.53 56.01 58.02 60.37 61.91 62.32 61.40 60.64

ȱȱFeed expenses 35.35 30.46 31.84 32.29 33.56 34.83 35.37 35.28 34.95 34.10 33.56

ȱȱNonȬfeed expenses 22.97 22.61 22.83 23.08 23.33 23.61 23.91 24.17 24.37 24.59 24.82

ȱȱNet returns 22.91 13.44 4.29 0.16 Ȭ0.89 Ȭ0.41 1.09 2.46 3.00 2.70 2.25

ȱȱ* Preceding year
The total of U.S. beef, pork, chicken and 

turkey production should increase at the 

fastest rate since 2002 in 2015.

All of the growth will come from the pork 

and poultry sectors. 

Beef production will decline for the fifth 

consecutive year as producers hold back 

more animals from market to rebuild the 

beef cow herd.

This will lead to an even wider spread 

between beef and other meat prices.

U.S. meat export volumes remained 

stable in recent years despite sharply 

higher prices and a strengthening U.S. 

dollar against most currencies.

Some signs of weakening export levels 

began to appear in the final months of 

2014, and meat imports (particularly beef) 

were higher than in recent years.

With strong growth in domestic meat 

production projected for the next few 

years, the U.S. meat sector will need to 

expand international shipments to keep 

prices from declining sharply

The amount of meat per person available 

in the domestic market fell by nearly 20 

pounds (8.8 percent) from 2007-2012.

Domestic meat availability is now 

projected to grow at rates not seen since 

the early 2000s.

Future meat demand strength will play a 

large part in determining how far prices fall 

in light of additional supplies.

Meat

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 41

More pork and chicken production impacts prices

40

80

120

160

200

240

280

2008 2010 2012 2014 2016 2018 2020 2022 2024

Dollars per hundredweight

Choice beef cutout Pork cutout Composite chicken

Domestic meat supply is set to increase

-2

0

2

4

6

8

10

12

1998-02 2002-06 2006-10 2010-14 2014-18 2018-22

Change over the period, billion pounds

Production Net exports

Meat demand strength will be crucial to prices

195

200

205

210

215

220

2008 2010 2012 2014 2016 2018 2020 2022 2024

Pounds per person 

Domestic meat consumption
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 42

Meat sector

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Beef (Million pounds)

ȱȱProduc tion 24,320 23,801 23,923 25,053 26,229 26,965 27,279 27,197 26,995 26,796 26,642

ȱȱImports 2,928 2,772 2,753 2,699 2,644 2,617 2,634 2,671 2,711 2,758 2,794

ȱȱDomestic use 24,718 24,088 24,063 24,883 25,831 26,436 26,672 26,609 26,430 26,257 26,132

ȱȱExports 2,584 2,511 2,602 2,825 2,998 3,119 3,230 3,260 3,282 3,301 3,306

ȱȱEnding stocks 530 503 513 558 601 627 638 638 632 629 627

P ork

ȱȱProduc tion 22,866 24,036 25,281 26,133 26,290 26,189 26,143 26,315 26,635 27,188 27,750

ȱȱImports 1,000 925 913 916 923 939 957 968 981 986 987

ȱȱDomestic use 19,114 19,787 20,693 21,354 21,360 21,130 20,948 20,958 21,108 21,451 21,805

ȱȱExports 4,829 5,145 5,449 5,657 5,852 6,009 6,161 6,325 6,501 6,705 6,913

ȱȱEnding stocks 540 569 621 657 659 647 638 638 646 663 681

Broiler

ȱȱProduc tion 38,173 40,176 41,209 41,868 42,389 42,812 43,279 43,867 44,499 45,202 45,895

ȱȱDomestic use 30,989 32,835 33,745 34,227 34,506 34,701 34,946 35,303 35,732 36,237 36,733

ȱȱExports 7,291 7,407 7,556 7,753 8,005 8,240 8,462 8,691 8,894 9,090 9,289

ȱȱEnding stocks 675 726 752 760 759 754 752 754 757 765 772

Turkey

ȱȱProduc tion 5,739 6,001 6,155 6,280 6,349 6,384 6,417 6,470 6,533 6,607 6,680

ȱȱDomestic use 5,006 5,166 5,334 5,453 5,517 5,541 5,557 5,591 5,636 5,692 5,748

ȱȱExports 799 814 830 842 854 870 888 906 924 942 960

ȱȱEnding stocks 200 248 268 282 289 292 295 299 304 310 316

Wholesale prices (Dollars per hundredweight)

ȱȱBoxed beef cutout 239.26 240.73 232.98 215.87 203.75 198.89 199.05 201.90 205.31 207.28 208.86

ȱȱPork cutout 110.19 95.87 85.94 80.23 80.70 83.67 87.10 89.58 90.89 90.26 89.61

ȱȱNational wholesale broiler 104.87 94.53 90.78 90.71 92.39 94.75 96.84 98.05 98.69 98.78 98.93

ȱȱNatl. wholesale turkey hens 107.64 101.85 95.85 93.29 93.56 95.37 97.50 98.89 99.74 100.04 100.38

Retail prices (Dollars per pound)

ȱȱBeef 5.97 6.20 6.15 6.02 5.89 5.86 5.86 6.03 6.18 6.31 6.44

ȱȱPork 4.02 3.90 3.76 3.68 3.72 3.83 3.99 4.09 4.14 4.13 4.12

ȱȱBroiler 1.96 1.97 1.96 1.96 2.01 2.06 2.11 2.14 2.15 2.15 2.15

ȱȱTurkey 1.63 1.62 1.59 1.58 1.60 1.63 1.67 1.70 1.72 1.74 1.76

Per capita consumption (Pounds, retail)

ȱȱBeef 54.3 52.5 52.0 53.3 54.9 55.8 55.8 55.3 54.5 53.7 53.1

ȱȱPork 46.5 47.8 49.6 50.7 50.3 49.4 48.6 48.2 48.2 48.6 49.1

ȱȱBroiler 83.5 87.8 89.5 90.0 90.0 89.8 89.7 90.0 90.4 91.0 91.5

ȱȱTurkey 15.7 16.1 16.5 16.7 16.8 16.7 16.6 16.6 16.6 16.6 16.7

ȱȱTo tal 200.0 204.1 207.5 210.8 212.0 211.7 210.8 210.0 209.6 209.9 210.3
A decline in input costs coupled with a 

record high all milk price led to profitability 

at or near record levels in 2014.

Input costs are projected to decline 

further in 2015, but an even larger drop in 

projected milk prices will cause 2015 

profitability levels to be more in line with 

the historical average. 

The milk price outlook depends upon the 

strength of international demand for dairy 

products. China has sharply increased its 

purchases of milk powders this decade, 

but its slowdown in purchases in 2014 led 

to price declines.

The U.S. dairy herd added 100 thousand 

cows (1.1 percent) during 2014.

Further increases are expected during 

the first portion of 2015, though the rate at 

which prices decline will have an effect.

Milk production per cow increased by 2.0 

percent in 2014, the second highest 

growth in yields since 2005. 

The Margin Protection Program-Dairy 

(MPP-Dairy) became operational late last 

year.

Enrollment information recently released 

by USDA shows that about half of U.S. 

licensed dairy operations signed up for 

2015 coverage.

If dairy margins fall at least as much as 

projected in 2015, participation could 

increase in 2016. Producers must enroll by 

September 30, 2015 to be eligible for 

2016.

Dairy

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 43

Producers have responded by building the dairy herd

9.05

9.10

9.15

9.20

9.25

9.30

9.35

9.40

9.45

2008 2010 2012 2014 2016 2018 2020 2022 2024

Million head 

Dairy cow inventory

2014 was a profitable year for the dairy industry 

0

4

8

12

16

20

24

28

2008 2010 2012 2014 2016 2018 2020 2022 2024

Dollars per hundredweight

Feed costs Other operating costs All milk price

Margins retreat in 2015 and 2016

4

6

8

10

12

14

2008 2010 2012 2014 2016 2018 2020 2022 2024

Dollars per hundredweight

Calculated MPP-Dairy margin
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 44

Dairy sector

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Milk supply

ȱȱDairy cows (thou. head) 9,255 9,362 9,393 9,385 9,353 9,325 9,323 9,330 9,339 9,354 9,371

ȱȱȱȱȱȱCalifornia 1,780 1,786 1,782 1,776 1,765 1,756 1,753 1,752 1,754 1,757 1,762

ȱȱȱȱȱȱWisconsin 1,270 1,281 1,284 1,283 1,280 1,278 1,279 1,283 1,285 1,288 1,289

ȱȱȱȱȱȱNew York 615 621 620 616 611 607 606 605 606 606 608

ȱȱȱȱȱȱIdaho 575 588 596 601 603 605 607 611 614 617 621

ȱȱȱȱȱȱPennsylvania 530 532 529 523 518 513 511 509 508 508 508

ȱȱȱȱȱȱMinneso ta 460 464 465 463 461 458 457 456 455 454 454

ȱȱȱȱȱȱTexas 462 472 478 481 483 484 486 488 490 491 493

ȱȱȱȱȱȱMichigan 390 401 408 412 416 419 423 427 431 435 439

ȱȱȱȱȱȱNew Mexico 323 326 326 325 323 322 321 321 320 320 320

ȱȱȱȱȱȱOhio 266 269 270 269 267 265 264 264 263 262 262

ȱȱȱȱȱȱRest o f U.S. 2,584 2,621 2,635 2,635 2,627 2,618 2,615 2,615 2,614 2,614 2,616

ȱȱMilk yield (lbs. per cow) 22,258 22,567 22,886 23,231 23,541 23,853 24,147 24,434 24,714 24,990 25,270

ȱȱMilk produc tion (bil. lbs.) 206.0 211.3 215.0 218.0 220.2 222.4 225.1 228.0 230.8 233.8 236.8

Min. FMMO class prices (Dollars per hundredweight)

ȱȱȱȱȱClass I mover 23.29 16.99 16.94 17.39 17.84 18.22 18.41 18.49 18.56 18.69 18.79

ȱȱȱȱȱClass II 23.34 15.74 15.94 16.48 16.79 17.17 17.29 17.37 17.53 17.71 17.84

ȱȱȱȱȱClass III 22.34 16.08 15.90 16.32 16.70 17.13 17.32 17.34 17.33 17.34 17.27

ȱȱȱȱȱClass IV 22.09 15.04 15.24 15.78 16.09 16.47 16.59 16.67 16.83 17.01 17.14

All milk price 23.97 17.59 17.55 18.01 18.39 18.79 18.96 19.02 19.07 19.16 19.19

Actual dairy prod. margin 13.32 8.33 8.50 9.12 9.26 9.34 9.33 9.38 9.49 9.79 9.96

Wholesale prices (Dollars per pound)

ȱȱȱȱȱButter, CME 2.16 1.52 1.40 1.42 1.44 1.48 1.47 1.47 1.47 1.46 1.45

ȱȱȱȱȱCheese, Amer., 40#, CME 2.11 1.59 1.57 1.61 1.65 1.69 1.71 1.71 1.71 1.71 1.70

ȱȱȱȱȱNonfat dry milk, AA 1.74 1.23 1.32 1.37 1.40 1.42 1.44 1.45 1.47 1.49 1.51

ȱȱȱȱȱEvaporated milk 2.24 2.07 2.05 2.07 2.11 2.14 2.16 2.18 2.20 2.22 2.24

Dairy product production (Million pounds)

ȱȱȱȱȱAmeric an cheese 4,510 4,606 4,660 4,691 4,716 4,740 4,785 4,839 4,887 4,935 4,992

ȱȱȱȱȱOther cheese 6,897 7,087 7,233 7,353 7,460 7,585 7,721 7,877 8,030 8,188 8,355

ȱȱȱȱȱButter 1,823 1,886 1,943 1,988 2,019 2,043 2,070 2,096 2,122 2,148 2,174

ȱȱȱȱȱNonfat dry milk 2,194 2,165 2,277 2,365 2,429 2,491 2,564 2,643 2,716 2,792 2,868

Dairy product exports

ȱȱȱȱȱAmeric an cheese 229 230 248 256 259 263 267 272 277 282 287

ȱȱȱȱȱOther cheese 577 560 584 595 599 603 609 616 623 630 638

ȱȱȱȱȱButter 139 139 154 160 156 154 158 162 165 169 173

ȱȱȱȱȱNonfat dry milk 1,198 1,152 1,211 1,273 1,299 1,326 1,358 1,393 1,425 1,457 1,486

PerȬcapita consumption (Pounds)

ȱȱȱȱȱButter 5.4 5.4 5.5 5.6 5.7 5.7 5.8 5.8 5.8 5.8 5.9

ȱȱȱȱȱNonfat dry milk 2.9 3.1 3.2 3.3 3.4 3.4 3.5 3.6 3.7 3.8 3.9

ȱȱȱȱȱTo tal cheese 33.7 34.2 34.6 34.8 34.9 35.1 35.3 35.6 35.9 36.2 36.5

ȱȱȱȱȱȱȱȱAmeric an 13.4 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.6

ȱȱȱȱȱȱȱȱOther 20.4 20.8 21.0 21.2 21.4 21.6 21.8 22.1 22.4 22.6 22.9

ȱȱȱȱȱTo tal fluid milk 185.6 183.6 181.9 181.3 180.0 179.3 178.6 177.5 176.7 176.0 175.2

ȱȱȱȱȱIce c ream 26.3 27.3 27.4 27.3 27.2 27.2 27.1 27.0 27.0 27.0 27.0
The CPI for food increased by 2.4 

percent in 2014, despite growth of 7.2 

percent in the CPI for meat.

As additional meat supplies lead to 

reduced prices for most meat products in 

2015, the CPI for food is projected to grow 

by only 1.6 percent.

Food price growth should fall further in 

2016 as lower commodity prices this year 

are not immediately passed through to the 

retail level.

Raw commodity values only account for 

15-20 percent of U.S. consumer food 

spending.

The cost of transforming raw farm 

commodities to finished food products is 

highly dependent on a number of 

macroeconomic factors.

Sharply lower energy prices and modest 

wage rate growth help to keep the costs of 

finished food products from growing much 

through 2016.

Food prices and expenditures

Continued improvement in the U.S. 

economy has contributed to higher food 

price inflation for food away from home in 

recent months.

Economic growth is one factor behind the 

long term trend of an increasing share of 

U.S. consumer food spending directed to 

food consumed away from home.

Food away from home expenditures only 

accounted for 40-42 percent of total food 

spending from 1986-1992, but will soon 

account for more than half of the total.

Food inflation slows in 2015

0

1

2

3

4

5

6

2008 2010 2012 2014 2016 2018 2020 2022 2024

Percent change

CPI for food

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 45

Slow growth in food marketing costs through 2016 

-1

0

1

2

3

4

5

6

7

8

2008 2010 2012 2014 2016 2018 2020 2022 2024

Percent change 

CPI for food Macro index for marketing costs

Spending on food away from home increases

46

47

48

49

50

51

52

2008 2010 2012 2014 2016 2018 2020 2022 2024

Percent 

Share of food expenditures away from home
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 46

Consumer price indices for food

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

(1982Ȭ84=100)

Total food 242.7 246.6 248.0 251.7 256.6 262.4 268.8 275.5 281.8 287.6 293.4

ȱȱ(Inflation rate) 2.4% 1.6% 0.6% 1.5% 1.9% 2.3% 2.4% 2.5% 2.3% 2.1% 2.0%

ȱȱFood at home 239.5 241.6 241.5 244.9 249.7 255.5 261.9 268.6 274.8 280.4 286.1

ȱȱȱȱCereal and bakery 271.1 270.0 272.1 276.9 282.8 288.8 295.1 301.3 306.7 311.6 316.8

ȱȱȱȱMeat 253.0 257.9 253.5 252.3 254.1 259.3 266.6 274.7 282.4 289.0 295.6

ȱȱȱȱDairy 225.3 221.0 220.3 225.6 231.2 237.0 242.4 247.7 252.4 256.9 261.5

ȱȱȱȱFruit and vegetables 294.4 300.2 304.3 312.4 321.1 330.2 339.5 349.1 357.9 366.3 375.0

ȱȱȱȱOther food at home 206.2 208.1 208.6 211.7 216.0 220.4 224.9 229.6 233.9 237.9 241.7

ȱȱȱȱȱȱSugar and sweets 209.3 210.6 211.1 214.3 219.4 224.0 228.7 233.4 237.7 241.6 245.6

ȱȱȱȱȱȱFats and oils 229.7 229.8 229.2 233.7 239.3 245.0 251.0 257.3 263.3 268.9 274.6

ȱȱȱȱȱȱOther prepared items 219.9 222.3 223.2 226.3 230.5 234.9 239.6 244.3 248.8 252.8 256.6

ȱȱȱȱȱȱNonȬalc. beverages 166.0 167.8 167.9 170.5 174.5 178.3 182.1 186.2 189.9 193.2 196.6

ȱȱFood away from home 249.0 255.2 258.9 263.1 268.0 273.7 280.1 286.8 293.3 299.3 305.4

Consumer expenditures for food

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

(Dollars per person)

Total food per capita 4,358 4,381 4,420 4,535 4,660 4,786 4,917 5,048 5,168 5,281 5,396

ȱȱFood at home 2,236 2,217 2,224 2,270 2,325 2,382 2,441 2,499 2,552 2,601 2,651

ȱȱFood away from home 2,121 2,164 2,196 2,265 2,334 2,404 2,476 2,549 2,616 2,680 2,745

Multiply by population for: (Billion dollars)

Total U.S. food expenditures 1,389 1,408 1,432 1,481 1,534 1,588 1,645 1,702 1,755 1,807 1,861
Government costs

Net CCC outlays were $12 billion in FY 

2014, with direct payments and livestock 

disaster assistance accounting for most of 

the spending.

Under the 2014 farm bill, direct payments 

end and ARC and PLC payments begin in 

FY 2016. 

Average projected ARC and PLC 

spending peaks with the 2015 crop, and 

those payments are made in FY 2017.

Net CCC outlays between FY 2015 and 

FY 2024 total $79 billion.

Mandatory government outlays under the 

crop insurance program and certain 

conservation and disaster programs are 

not included in the CCC account.

Like ARC and PLC outlays, crop 

insurance spending can vary a lot from 

year to year.

Crop insurance net outlays total almost 

$85 billion between FY 2015 and FY 

2024.

Livestock forage assistance totals an 

estimated $5.7 billion in FY 2014 and FY 

2015.

USDA projects that livestock aid and the 

non-insured assistance program (NAP) 

will have annual outlays of over $700 

million between FY 2016 and FY 2024.

Other disaster aid from FY 2008-FY 2013 

was provided from non-CCC accounts.

CCC outlays total $79 billion over FY 2015-24

0

2

4

6

8

10

12

14

2008 2010 2012 2014 2016 2018 2020 2022 2024

Fiscal year

Billion dollars

Grains, oilseeds & cotton Conservation All other

10-year crop insurance outlays total $85 billion

0

5

10

15

20

25

30

2008 2010 2012 2014 2016 2018 2020 2022 2024

Fiscal year

Billion dollars

Net CCC Crop insurance Non-CCC conservation Other non-CCC

Livestock aid totals almost $6 billion over FY 2014-15

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2008 2010 2012 2014 2016 2018 2020 2022 2024

Fiscal year

Billion dollars

CCC disaster and NAP Other disaster and emergency

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 47
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 48

Net government outlays

Fisc alȱȱyear 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Feed grains (Million dollars)

ȱȱCorn 2,093 145 2,656 2,915 2,435 1,483 1,161 1,024 1,151 1,368 1,462

ȱȱSorghum 181 3 90 263 234 215 189 183 186 209 207

ȱȱBarley 74 1 11 157 181 175 146 133 141 153 163

ȱȱOats 3 0 0 6 8 7 6 5 5 5 6

Food grains

ȱȱWheat 1,089 88 319 1,262 1,284 986 838 782 753 825 947

ȱȱRice 350 Ȭ1 267 269 266 274 259 254 246 255 261

Oilseeds

ȱȱSoybeans 591 12 388 1,431 1,250 886 577 440 412 508 601

ȱȱPeanuts 46 9 328 380 416 434 394 401 423 450 452

ȱȱOther oilseeds 18 5 2 48 48 40 36 31 31 36 38

Other commodities

ȱȱUpland co tton 607 1,192 630 546 546 429 418 406 403 323 356

ȱȱSugar, feedstock flexibility 1 0 35 8 6 8 6 7 7 9 10

ȱȱDairy 6 190 104 54 97 128 136 123 99 133 124

CCC conservation

ȱȱConservation reserve 1,732 1,748 1,698 1,670 1,626 1,648 1,616 1,678 1,720 1,706 1,678

ȱȱOther CCC conservation 5 5 5 5 1 1 1 1 1 1 1

Tobacco trust fund 1,093 278 0 0 0 0 0 0 0 0 0

Other CCC

ȱȱDisaster payments, NAP 3,184 2,990 716 723 748 769 789 799 810 821 833

ȱȱOther net costs 1,129 996 595 653 666 629 485 463 463 464 466

Net CCC outlays 12,202 7,661 7,846 10,391 9,811 8,112 7,057 6,728 6,849 7,266 7,606

NRCS conservation 2,720 3,276 3,298 3,510 3,657 3,789 4,059 3,803 3,723 3,784 3,704

Crop insurance 8,311 6,971 8,121 7,694 8,064 8,487 8,794 8,996 9,063 9,176 9,220

Total mandatory outlays 23,233 17,908 19,265 21,595 21,533 20,388 19,909 19,527 19,635 20,226 20,531

No te:ȱȈNRCS ConservationȈȱdeno tes mandatory spending on conservation programs authorized by the 2002, 2008 and 2014 farm bills that is no t

included in reported CCC outlays. Fisc al years begin on Oc t.1 o f the previous c alendar year (FY 2015: Oc t. 1, 2014ȬSep. 30, 2015).

All projec tions are averages ac ross 500 outcomes.
Payments and crop insurance

With the new farm bill in place, PLC and 

ARC replace DCP and ACRE for grain 

and oilseed producers.

Projected ARC and PLC payments peak 

in 2015/16. After 2015/16, program rules 

force ARC revenue benchmarks to adjust 

downward for many crops and counties.

Payments generally move inversely with 

prices, explaining both the decline from 

2015-2020 and the increase from 2020-

2024.

Cotton and peanuts receive most of the 

projected marketing loan benefits.

Crop insurance indemnities spiked 

because of the 2012 drought. 

The projections include the new STAX 

policy for cotton and SCO for program 

crops. 

Projected average indemnity payments 

for losses top $10 billion per year.

The average annual loss ratio (total 

indemnities divided by total premiums) 

over the next 10 years is 0.93. 

The crop insurance program has grown 

in importance relative to other farm 

programs.

Projected net indemnities (indemnities 

minus producer-paid premiums) exceed 

the projected value of crop payments 

under Title I (PLC, ARC and marketing 

loans) of the new farm bill after 2016/17.

Actual crop insurance indemnities will 

vary greatly from year to year, as will Title 

I benefits. 

PLC and ARC replace DCP and ACRE

0

2

4

6

8

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

Marketing year

Billion dollars

DCP, ACRE PLC ARC Marketing loans

Net indemnities exceed Title I payments after 2016

0

2

4

6

8

10

12

14

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

Marketing year 

Billion dollars

Title I crop payments Net indemnities 

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 49

Indemnities exceed $10 billion most years

0

5

10

15

20

 08/09 10/11 12/13 14/15 16/17 18/19 20/21 22/23 24/25

Marketing year 

Billion dollars

Indemnities Premiums Producer-paid premiums
FAPRI-MU Report #01-15 - 2014 U.S. Baseline Briefing Book - Page 50

Selected direct government payments

Marketing year 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25

(Million dollars)

ARC payments 2,984 3,798 3,096 1,809 1,218 977 1,063 1,282 1,469 1,642 1,782

PLC payments 931 2,742 2,829 2,484 2,202 2,072 2,042 2,257 2,375 2,573 2,880

Marketing loans 509 667 644 653 546 509 505 534 472 531 505

Co tton transition payments 531 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

ȱȱTo tal 4,955 7,207 6,568 4,947 3,966 3,559 3,610 4,073 4,316 4,746 5,166

No te: Includes selec ted payments for feed grains, food grains, oilseeds, and upland co tton.

All projec tions are averages ac ross 500 outcomes.

Crop insurance

Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

(Million dollars, c rop year)

Total premiums 10,036 9,813 9,949 10,454 10,986 11,443 11,660 11,799 11,870 11,939 11,785

ȱȱProducerȬpaid premiums 3,844 3,716 3,719 3,908 4,109 4,280 4,361 4,413 4,439 4,465 4,406

ȱȱPremium subsidies 6,192 6,097 6,230 6,546 6,878 7,163 7,299 7,386 7,432 7,474 7,379

Total indemnities 8,469 9,728 9,196 9,649 10,177 10,568 10,821 10,906 11,037 11,101 11,008

Loss ratio 0.84 0.99 0.92 0.92 0.93 0.92 0.93 0.92 0.93 0.93 0.93

(Million dollars, c rop year)

Net indemnities 4,625 6,012 5,478 5,740 6,068 6,288 6,460 6,492 6,598 6,636 6,602

ȱȱCorn 2,217 2,063 2,127 2,250 2,440 2,533 2,653 2,632 2,687 2,717 2,643

ȱȱSoybeans 337 1,296 1,161 1,242 1,332 1,428 1,457 1,491 1,514 1,504 1,511

ȱȱWheat 1,194 993 615 655 692 717 733 738 731 718 731

ȱȱUpland co tton 440 422 477 487 486 494 502 509 527 534 542

ȱȱAll o ther 436 1,237 1,098 1,106 1,118 1,116 1,116 1,122 1,138 1,162 1,175

(Million dollars, fisc al year)

Net outlays 8,313 6,971 8,121 7,694 8,064 8,487 8,794 8,996 9,063 9,176 9,220
Farm receipts and expenses

Lower prices reduce cash receipts from 

sales of current and former program crops 

(grains, oilseeds, cotton and sugar) for the 

third straight year in 2015 and drop again 

in 2016.

Increasing production and slightly higher 

prices result in a small increase in 

program crop receipts from 2016 to 2021.

Receipts for other crops (including 

vegetables, fruits, nursery crops, hay and 

biomass crops) dipped slightly in 2014, but 

rise steadily in the future.

Livestock, dairy and poultry sector 

receipts peaked at $209 billion in 2014, a 

$90 billion increase from 2009.

Lower prices for poultry products, hogs 

and milk result in lower receipts in 2015.

Cattle prices decline in 2016, and total 

livestock sector receipts reach their lowest 

point in 2018.

Fuel, feed and fertilizer expenses are all 

projected to decline in 2015, resulting in 

the first year-over-year decline in total 

farm production expenses since 2009.

Fuel prices and expenses increase 

steadily from 2016-2024.

Feed costs increase between 2016 and 

2020 in response to increased livestock 

production and higher prices for corn, 

soybean meal and other feeds.

Program crop receipts return to recession lows

0

20

40

60

80

100

120

140

160

180

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year 

Billion dollars

Program crops Other crops

Livestock receipts decline from 2014 record high

0

50

100

150

200

250

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year 

Billion dollars

Cattle Poultry & eggs Dairy Hogs & other

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 51

Fuel, feed and fertilizer expenses decline in 2015

0

10

20

30

40

50

60

70

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion dollars

Feed Fertilizer & chemicals Fuel & electricity
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 52

Farm cash receipts

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

(Billion dollars)

Feed grains 66.10 60.54 60.93 63.36 66.27 68.74 70.21 70.92 70.79 70.24 69.55

Food grains 15.85 13.99 13.67 14.24 14.78 15.15 15.39 15.35 15.18 15.00 14.89

Oilseeds 40.68 37.85 35.79 36.84 38.73 40.35 41.05 41.42 41.30 40.74 40.48

Co tton 6.05 5.23 4.97 5.14 5.30 5.35 5.38 5.43 5.58 5.68 5.74

Sugar 3.10 3.20 3.20 3.32 3.40 3.44 3.47 3.49 3.49 3.50 3.50

Other c rops 66.43 67.74 69.98 72.28 74.56 76.91 79.40 81.87 84.24 86.68 89.18

Cattle 81.53 81.79 78.54 73.57 69.95 68.25 68.32 69.23 70.25 70.85 71.36

Hogs 25.31 22.46 20.88 20.33 20.71 21.50 22.40 23.19 23.63 23.74 23.92

Dairy produc ts 49.15 36.90 37.51 39.07 40.30 41.59 42.48 43.14 43.83 44.59 45.26

Poultry, eggs 47.52 45.54 44.49 44.79 45.87 47.29 48.66 49.78 50.73 51.43 52.21

Other livestock 5.68 5.48 5.48 5.50 5.56 5.66 5.78 5.91 6.03 6.13 6.24

To tal c ash receipts 407.39 380.72 375.45 378.44 385.44 394.24 402.54 409.75 415.06 418.59 422.33

Farm production expenses

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

(Billion dollars)

Feed 59.21 53.02 53.19 54.49 56.46 58.10 58.81 58.83 58.44 57.72 57.19

Purchased livestock 32.84 34.18 32.66 30.10 27.94 26.65 26.38 26.75 27.22 27.61 27.94

Seed 22.68 22.55 22.66 22.96 23.37 23.88 24.54 25.25 25.86 26.32 26.73

Fertilizer and chemic als 43.28 41.43 41.20 41.38 42.05 43.17 44.55 45.32 45.41 45.51 45.52

Fuels and elec tricity 23.43 19.70 20.79 22.28 23.75 25.08 26.68 28.09 28.95 29.91 30.89

Interest 17.63 19.30 20.70 22.05 22.91 23.55 24.17 24.71 25.19 25.70 26.19

Contrac t and hired labor 34.86 35.56 36.63 37.80 39.00 40.22 41.44 42.71 44.02 45.37 46.79

Capital consumption 33.29 33.91 34.17 34.38 34.60 34.88 35.23 35.64 36.08 36.57 37.08

Rent to nonȬoperators 17.39 17.20 16.94 16.83 16.90 17.01 17.14 17.23 17.28 17.29 17.26

All o ther 83.30 84.55 85.86 87.70 89.58 91.52 93.64 95.56 97.18 98.85 100.45

To tal produc tion expenses 367.93 361.40 364.79 369.97 376.56 384.07 392.57 400.09 405.63 410.85 416.05
Farm income

Cash income and expenses decline in 2015

100

150

200

250

300

350

400

450

500

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year 

Billion dollars

Gross cash income Cash expenses

Gross cash income (sales receipts and 

government payments) was steady at 

record levels between 2012 and 2014.

Lower prices for many farm commodities 

sharply reduce gross cash income in 

2015.

The much smaller drop in 2015 cash 

production expenses causes net cash 

income declines from $115 billion in 2014 

to $95 billion in 2015.

Net cash income averages about $90 

billion per year for 2015-2024. 

For the first time since 2005, livestock 

receipts exceeded crop receipts in 2014.

Projected crop and livestock receipts 

both decline in 2015, and livestock 

receipts do not hit their lowest point until 

2018.

Government payments average about 

$10 billion per year between 2015 and 

2024, accounting for about 2 percent of 

gross cash income.

After reaching record levels in nominal 

terms in 2013, net farm income fell sharply 

in 2014 and another large decline is 

expected in 2015.

After correcting for inflation, 2013 real net 

farm income was the highest since the 

1970s. 

Real net farm income in 2015 is only 

slightly above the recession low of 2009.

Nominal net farm income from 2016-24 

averages about $72 billion per year.

Net farm income declines sharply in 2014 and 2015

0

20

40

60

80

100

120

140

160

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year 

Billion dollars

Nominal net farm income Real (2015 dollars) 

Crop and livestock receipts both fall in 2015

0

50

100

150

200

250

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion dollars

Crop receipts Livestock receipts Government payments

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 53
FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 54

Farm income statistics

Calendar year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

(Billion dollars)

1. Farm receipts 434.72 408.34 403.26 406.76 414.65 424.26 433.24 440.91 446.64 450.56 454.52

ȱȱȱȱCrops 198.21 188.54 188.54 195.18 203.04 209.95 214.90 218.49 220.59 221.85 223.35

ȱȱȱȱLivestock 209.18 192.18 186.90 183.26 182.40 184.29 187.65 191.26 194.48 196.75 198.98

ȱȱȱȱFarmȬrelated 27.33 27.62 27.81 28.32 29.21 30.02 30.70 31.16 31.58 31.96 32.19

2. Government payments 10.76 9.77 11.76 11.22 9.65 8.84 8.63 8.57 8.95 9.31 9.63

3. Gross c ash income 445.48 418.11 415.01 417.99 424.30 433.10 441.87 449.48 455.59 459.87 464.14

ȱȱȱȱ(1 + 2)

4. Nonmoney income 24.04 24.13 23.67 22.76 22.00 21.72 21.97 22.51 23.16 23.92 24.74

5. Value o f inventory

ȱȱȱȱChange 6.38 Ȭ1.57 2.95 1.20 0.03 Ȭ0.87 Ȭ0.69 Ȭ1.10 Ȭ0.60 Ȭ0.42 Ȭ0.17

6. Gross farm income 475.89 440.67 441.64 441.95 446.32 453.95 463.15 470.90 478.14 483.36 488.72

ȱȱȱȱ(3 + 4 + 5)

7. Cash expenses 330.34 322.95 326.09 331.11 337.52 344.73 352.79 359.78 364.74 369.33 373.85

8. To tal expenses 367.93 361.40 364.79 369.97 376.56 384.07 392.57 400.09 405.63 410.85 416.05

9. Net c ash income 115.13 95.17 88.93 86.88 86.78 88.37 89.08 89.71 90.84 90.54 90.29

ȱȱȱȱ(3ȱȬȱ7)

10. Realized net farm inc 101.59 80.84 73.89 70.78 69.74 70.75 71.27 71.90 73.12 72.93 72.84

ȱȱȱȱȱȱ(3 + 4ȱȬȱ8)

11. Net farm income 107.96 79.27 76.84 71.98 69.76 69.88 70.58 70.81 72.51 72.51 72.67

ȱȱȱȱȱ(6ȱȬȱ8)

ȱȱȱȱȱDeflated (2015 $) 110.44 79.27 75.43 69.50 66.62 65.78 65.02 63.71 64.25 63.00 61.44
Corn prices depend on weather, energy 

prices, income growth and much more.

To examine alternative futures for 

agricultural markets, we considered 500 

different combinations of assumptions 

about factors driving commodity prices.

Although corn prices average about $4 

per bushel across the stochastic 

outcomes, there are some combinations of 

assumptions for any given year that lead 

to prices over $5 per bushel and some 

where prices drop below $3 per bushel.

PLC program costs are uncertain. If 

season-average market prices are above 

reference prices, no payments occur, but 

payments can be large if prices drop far 

below reference prices.

Given all the assumptions of this 

analysis, average PLC costs average less 

than $1 billion for the 2014/15 crop but 

increase to almost $3 billon in 2016/17.

In some of the stochastic outcomes 

program spending is near zero. In others, 

it is more than twice the average level.

Given assumed participation rates and 

the projected paths of average market 

prices and yields, average ARC payments 

increase from $3 billion for the 2014/15 

crop to almost $4 billion in 2015/16, but 

then decline in subsequent years.

As with PLC, spending can be far above 

or below the average for any given year. 

The provision that limits ARC payments 

to 10 percent of the benchmark revenue 

per acre puts an upper cap on program 

payments.

Ranges from the 500 alternative futures

PLC program costs are uncertain

0

1

2

3

4

5

6

7

8

 14/15 16/17 18/19 20/21 22/23 24/25

Marketing year

Billion dollars

90th percentile Average of 500 outcomes 10th percentile

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 55

Corn prices depend on weather and much more

0

1

2

3

4

5

6

7

8

 08/09 10/11 12/13 14/15 16/16 18/19 20/21 22/23 24/25

September-August year

Dollars per bushel

90th percentile Average of 500 outcomes 10th percentile

ARC payments can also vary greatly

0

1

2

3

4

5

6

7

 14/15 16/17 18/19 20/21 22/23 24/25

Marketing year

Billion dollars

90th percentile Average of 500 outcomes 10th percentile
Given the uncertainty over spending on 

the new PLC and ARC programs, net 

CCC outlays can be far greater or less 

than the projected average.

If prices are above reference prices and 

revenues are above average recent 

averages, the conservation reserve 

program and livestock disaster aid may be 

the only major CCC outlays.

In contrast, low prices or per-acre 

revenues could trigger payments that 

exceed the levels of recent years.

Volatility in commodity yields and prices 

creates uncertain outlays for the crop 

insurance program.

Higher crop prices, production and 

coverage levels increase crop insurance 

premiums and premium subsidies.

In any given year, outlays will depend on 

yields, prices and resulting indemnities.

In extreme weather years, indemnities 

and outlays can far exceed the average, 

as in FY 2013. 

Net farm income depends on production 

levels and the prices of agricultural outputs 

and inputs, all of which are uncertain.

As a result, future levels of net farm 

income are also quite uncertain.

The sources of uncertainty considered in 

this analysis lead to a wide range of 

possible farm income levels for any given 

year.

There are certain to be risks not captured 

in these 500 alternative futures.

Ranges from the 500 alternative futures

Crop insurance net outlays are also uncertain

0

2

4

6

8

10

12

14

16

2008 2010 2012 2014 2016 2018 2020 2022 2024

Fiscal year

Billion dollars

90th percentile Average of 500 outcomes 10th percentile

FAPRI-MU Report #01-15 - 2015 U.S. Baseline Briefing Book - Page 56

CCC net outlays could vary greatly from averages

0

2

4

6

8

10

12

14

16

18

2008 2010 2012 2014 2016 2018 2020 2022 2024

Fiscal year

Billion dollars

90th percentile Average of 500 outcomes 10th percentile

Net farm income likely to stay below 2011-14 levels

0

20

40

60

80

100

120

140

2008 2010 2012 2014 2016 2018 2020 2022 2024

Calendar year

Billion dollars

90th percentile Average of 500 outcomes 10th percentile