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Season-Average Price Forecasts - Documentation

Scope/Coverage of Data

Note: The model forecasts are not official USDA forecasts. See USDA's World Agricultural Supply and Demand Estimates for official USDA Season-Average Price (Marketing Year Average price) forecasts.

Current Forecasts

The data product provides weekly model forecasts of Marketing Year Average (MYA) prices (Season-Average Prices), Price Loss Coverage (PLC) payment rates, county Agricultural Risk Coverage (ARC-CO) prices, and individual Agricultural Risk Coverage (ARC-IC) prices for selected U.S. commodities for current and 1-2 upcoming marketing years along with their input data. The commodities include corn, soybeans, wheat, and upland cotton. Concurrent WASDE (World Agricultural Supply and Demand Estimates report) projections of the MYA prices and their implied PLC payment rates and ARC-CO/IC prices are also provided. 

The data product files are updated monthly (adding more recent weekly forecasts) and posted 1 business day after the release of USDA’s WASDE report.

Historical Forecasts

The historical forecasts include previous MYA forecasts for corn, soybeans, and wheat for marketing years 2003/04 and beyond. For marketing years 2003/04 through 2013/14, the MYA price forecasts were used to compute forecasts of Counter-Cyclical Payment (CCP) rates introduced by the 2002 Farm Act. No Average Crop Revenue Election (ACRE) program payments were computed for the marketing year 2003/04 through 2013/14 because those calculations required State-, county-, or farm-level data. For marketing year 2014/15 and beyond, the MYA price forecasts were used to compute forecasts of PLC payment rates and ARC-CO/ARC-IC prices for corn, soybeans, and wheat. The historical forecasts also include MYA price forecasts for upland cotton for marketing years 2017/18 and beyond. 

The historical forecasts can be found in the csv output forecast file [outputfc.csv] and the used input data can be found in the csv input data file [inputdata.csv].

Note for upland cotton forecasts:

Both the current WASDE report and ERS’s forecasting model only focus on the upland cotton (lint cotton) MYA price, neither the cottonseed nor seed cotton MYA price. The recent farm bill commodity program for seed cotton was added to Title 1 of the 2018 farm bill. The seed cotton program combines lint cotton and cottonseed into one program. Seed cotton price is a weighted average of national upland cotton and cottonseed prices. The calculations of forecasts of the PLC payment rate and ARC price for seed cotton require not only a forecast of the upland cotton MYA price but also an additional forecast of the cottonseed MYA price that both WASDE report and ERS’s forecasting model do not currently focus on. 

Methods

Data File Items:

Tables in the excel calculator file [futmodel-calculator.xlsx]:

  • Header: this section specifies the commodity and marketing year and shows forecasting date and the output forecasts.
  • Table 1: this is a calculator table for the model forecast of MYA price.
    • Year-month (column A): this is the calendar year and month for the marketing year.
    • NASS price received (column B): this is the official monthly price received data, which is also provided in the csv input data file [inputdata.csv].
    • Futures nearby contract year-month (column C): this column specifies the nearby futures contract year and month (maturity year and month) for each month during the marketing year.
    • Daily futures price based on nearby contract (column D): this is the most recent daily futures settlement price of the nearby futures contract (column C) as of the forecasting date. The default values are also provided in the csv input data file [inputdata.csv]. Users are encouraged to enter more recent futures prices here and the spreadsheet will generate new forecasts based on the entered prices.
    • Basis (5-year U.S. average or 7-year U.S. Olympic average) (column E): this is the historical average of the basis input data for each month during the marketing year. The basis input data is provided in the csv input data file [inputdata.csv] but not its average. Users may enter different basis values such as historical averages made by different averaging methods or forward-looking estimates.
    • NASS marketing percentage (5-year U.S. average or 7-year U.S. Olympic average) (column F): this is the historical average of the marketing percentage input data for each month during the marketing year. The marketing percentage input data is provided in the csv input data file [inputdata.csv] but not its average. Users may enter different marketing percentage values such as historical averages made by different averaging methods or forward-looking estimates.
    • Marketing years for basis and marketing percentage average (column G): this column specifies the marketing years used for calculating the average of the basis and marketing percentage input data (column E and F).
    • Price received forecast (column H): this column equals daily futures price (column D) plus historical average of the basis (column E) for each month during the marketing year.
    • Composite price received official/forecast (column I): this column equals NASS price received (column B) if it is available or price received forecast (column H) if NASS price received (column B) is not available. If both NASS price received (column B) and price received forecast (column H) are not available, an interpolated value by column I of the previous month and the next month is used.
    • MYA price weight (column J): this column equals the marketing percentage (column F) times composite price received official/forecast (column I) and divides by 100 for each month during the marketing year.
    • Model forecast of the MYA price (last row): this forecast equals the sum of monthly price weights (column J) for each month during the marketing year.
    • Notice values in column E to column J are intermediate calculations based on the data in the csv input data file [inputdata.csv] and they are not provided directly in the csv input data file. More information is in the forecast procedure section.
  • Table 2: this table calculates the effective reference price for PLC and ARC programs based on MYA prices in previous marketing years.
    • Reference price: this is an official farm bill parameter used in PLC and ARC programs.
    • MYA price: this is marketing year average (MYA) price, also known as season-average price (SAP), the national average price received by U.S. farmers for a commodity during a 12-month marketing year.
    • 5-year MYA price Olympic average: this is the MYA price average dropping the lowest and highest data point over the 5 marketing years that is used in PLC and ARC programs. Notice the 5 marketing years used have a 1-year gap to the program year, for example, the 2025 program uses MYA prices from marketing years 2019/20 to 2023/24.
    • Effective reference price: the effective reference price is the greater of the reference price or 85 percent of the average of the MYA price from the preceding 5 years, excluding the highest and lowest prices, capped at 115 percent of the statutory reference price. The effective reference price is used in PLC and ARC programs.
  • Table 3: this table calculates the implied PLC payment rates based on MYA price model and WASDE forecasts.
    • Effective reference price: the value of effective reference price is from table 2.
    • MYA price forecast: the value of the MYA price forecast is from the model (table 1) and WASDE report.
    • National loan rate: this is an official farm bill parameter used in PLC and ARC programs.
    • Effective price forecast: this is the implied effective price based on the model forecast and WASDE forecast of the MYA price for the PLC program.
    • PLC payment rate forecast: this is the implied PLC payment rate based on the model forecast and WASDE forecast of the MYA price for PLC programs.
    • Maximum PLC payment rate: this is the highest possible PLC payment rate, which is the effective reference price less the national loan rate.
  • Table 4: this table calculates the benchmark price and implied price for county/individual agricultural risk coverage (ARC-CO/IC).
    • Effective reference price: the value of effective reference price is from table 2.
    • Annual benchmark price: this equals the higher of the effective reference price or the MYA price in a given marketing year. Notice the 5 marketing years used have a 1-year gap to the program year, for example, the 2025 program uses MYA prices from marketing years 2019/20 to 2023/24.
    • MYA price forecast: the value of the MYA price forecast is from the model (table 1) and WASDE report.
    • National loan rate: this is an official farm bill parameter used in PLC and ARC programs.
    • ARC-CO price forecast: this is the implied ARC-CO price based on the model forecast and WASDE forecast of the MYA price for ARC programs.
    • ARC-IC price forecast: this is the implied ARC-IC price based on the model forecast and WASDE forecast of the MYA price for ARC programs.
  • Table 5: this table provides previous weekly forecasts of MYA price, PLC payment rate, and ARC-CO/IC price and effective reference price.

Columns in the output forecast data file [outputfc.csv]:

  • Model forecast date: the model only uses data that is available as of the model forecast date to generate forecast outputs.
  • Commodity: this is the underlying agricultural product of forecasts, including corn, soybeans, wheat, and cotton.
  • Futures model type: this is the type of the forecast model used to generate output forecasts: single-contract model or three-contract aggregate model. The single-contract model only uses futures prices from one specific futures contract, while the three-contract aggregate model uses weighted futures prices from three different futures contracts. See more details in the Input data definitions and sources section below.
  • Futures exchange: this is the futures market or exchange where futures contracts are traded on, including CBOT (Chicago Board of Trade) and KCBT (Kansas City Board of Trade) of the CME group, MGE (Minneapolis Grain Exchange), and ICE (Intercontinental Exchange). For weighted futures prices used in aggregate models, multiple exchanges are specified.
  • Marketing year: this is the underlying marketing year of forecasts.
  • MYA price model forecast: this is the marketing year average (MYA) price model forecast, which is the unofficial forecast made by the forecast model.
  • MYA price WASDE forecast: this is the USDA official MYA price forecast that is released by WASDE reports.
  • WASDE forecast date: this is the release date of the WASDE report that provides official MYA price forecasts.
  • Target price: this is an official farm bill parameter used in CCP programs for marketing years 2002/03 through 2013/14.
  • National loan rate: this is an official farm bill parameter used in CCP, PLC, or ARC programs.
  • Direct payment rate: this is an official farm bill parameter used in CCP programs for marketing years 2002/03 through 2013/14.
  • Reference price: this is an official farm bill parameter used in PLC and ARC programs for marketing years 2014/15 and beyond.
  • CCP effective price model forecast: this is the implied effective price based on the MYA price model forecast for CCP programs for marketing years 2002/03 through 2013/14.
  • CCP rate model forecast: this is the implied CCP rate based on the MYA price model forecast for CCP programs for marketing years 2002/03 through 2013/14.
  • CCP effective price WASDE forecast: this is the implied effective price based on the MYA price WASDE forecast for CCP programs for marketing years 2002/03 through 2013/14.
  • CCP rate WASDE forecast: this is the implied CCP rate based on the MYA price WASDE forecast for CCP programs for marketing years 2002/03 through 2013/14.
  • Historical MYA price year1, 2, 3, …, and 5: these are the historical MYA prices in the recent 5 marketing years used for calculating the 5-year average MYA price for PLC and ARC programs for marketing years 2014/15 and beyond. Notice the 5 marketing years used have a 1-year gap to the program year, for example, the 2025 program uses MYA prices from marketing years 2019/20 to 2023/24. If an official MYA price is not available on the forecast date, its model forecast is used.
  • Historical MYA 5-year range: this is the year range of the 5 marketing years used for calculating the 5-year average MYA price for PLC and ARC programs for marketing years 2014/15 and beyond.
  • Historical MYA price 5-year Olympic average: this is the MYA price average dropping the lowest and highest data point over the 5 marketing years that is used in PLC and ARC programs for marketing years 2014/15 and beyond. Notice the 5 marketing years used have a 1-year gap to the program year, for example, the 2025 program uses MYA prices from marketing years 2019/20 to 2023/24.
  • Effective reference price: the effective reference price is the greater of the reference price or 85 percent of the average of the MYA price from the preceding 5 years, excluding the highest and lowest prices, capped at 115 percent of the statutory reference price. The effective reference price is used in PLC and ARC programs for marketing years 2019/20 and beyond.
  • Effective price model forecast: this is the implied effective price based on the MYA price model forecast for the PLC program for marketing years 2014/15 and beyond.
  • PLC payment rate model forecast: this is the implied PLC payment rate based on the MYA price model forecast for PLC programs for marketing years 2014/15 and beyond.
  • Effective price WASDE forecast: this is the implied effective price based on the MYA price WASDE forecast for the PLC program for marketing years 2014/15 and beyond.
  • PLC payment rate WASDE forecast: this is the implied PLC payment rate based on the MYA price WASDE forecast for PLC programs for marketing years 2014/15 and beyond.
  • Maximum PLC payment rate: this is the highest possible PLC payment rate, which is the effective reference price less the national loan rate. This is for PLC programs for marketing years 2014/15 and beyond.
  • ARC annual benchmark price year1, 2, 3, …, and 5: these equal the higher of the effective reference price or the MYA price in a given marketing year. Notice the 5 marketing years used have a 1-year gap to the program year, for example, the 2025 program uses MYA prices from marketing years 2019/20 to 2023/24.
  • ARC annual benchmark price 5-year range: this is the marketing years used for generating the five ARC Annual Benchmark Prices for ARC programs for marketing years 2014/15 and beyond.
  • ARC CO benchmark price: this is the ARC annual benchmark price 5-year average, dropping the highest and lowest data point, for ARC programs for marketing years 2014/15 and beyond.
  • ARC CO price model forecast: this is the implied ARC-CO price based on the MYA price model forecast for ARC programs for marketing years 2014/15 and beyond.
  • ARC CO price WASDE forecast: this is the implied ARC-CO price based on the MYA price WASDE forecast for ARC programs for marketing years 2014/15 and beyond.
  • ARC IC price model forecast: this is the implied ARC-IC price based on the MYA price model forecast for ARC programs for marketing years 2014/15 and beyond.
  • ARC IC price WASDE forecast: this is the implied ARC-IC price based on the MYA price WASDE forecast for ARC programs for marketing years 2014/15 and beyond.
  • Actual MYA price: this is the realized USDA official marketing average price, which is not available when the forecast is made but will be updated once the statistics become available.
  • Price unit: this is the unit for all prices and rates for a given commodity.

Columns in the Input Data File [inputdata.csv]:

  • Commodity: this is the agricultural product of the input data, including corn, soybeans, wheat, and cotton.
  • Item: this is the description of the input data, including basis, farm bill direct payment rate, farm bill national loan rate, farm bill reference price, farm bill target price, futures price monthly, futures price daily, marketing percentage, marketing year average price, price received, WASDE MYA price forecast, wheat contract weight, and wheat production by class. See Input data definitions and sources section for more information.
  • Futures exchange: this is the futures market or exchange where futures contracts are traded on, including CBOT (Chicago Board of Trade) and KCBT (Kansas City Board of Trade) of the CME group, MGE (Minneapolis Grain Exchange), and ICE (Intercontinental Exchange). For weighted futures prices used in aggregate models, multiple exchanges are specified.
  • Commodity class: this is the class of the commodity of the input data, only applicable to cotton and wheat.
  • Data period: this is the period of the input data, including daily, monthly or yearly.
  • Marketing year: this is the marketing year of the input data.
  • Calendar year month: this is the calendar year and month of the input data in the format of year-month (YYYY-MM).
  • Futures contract: this is the futures contract year and month (maturity year and month) associated with futures price or basis data in the format of year-month (YYYY-MM).
  • Data source date: this is the release or update date of the input data in the format of year-month-day (YYYY-MM-DD). Notice the format may be automatically converted to a different one depending on users’ computer software.
  • Value: this is the value of the input data.
  • Unit: this is the unit of the input data.

Input Data Definitions and Sources

This section provides detailed definitions and sources of the input data used for calculating the model forecasts in this data product.

  • U.S. futures price (daily and monthly): both daily settlement futures prices and their monthly average prices are used in the forecast model. ERS’s forecasting models use every Thursday’s settlement price (or the most recent settlement price as of each Thursday) to produce weekly forecasts of the MYA prices. Monthly average prices are based on the Thursday settlement prices. ERS retrieves futures price data through LSEG Data & Analytics (formerly Refinitiv).
    • Corn and soybeans: corn and soybean futures prices are from futures contracts traded on the CBOT of the CME Group.
    • Wheat: the data product provides wheat forecasts using the three-contract aggregate futures model for marketing years 2021/22 and beyond. For marketing years 2003/04 through 2020/21, originally only the single-contract model was used and released prior to marketing year 2021/22, but forecasts based on the three-contract aggregate model are re-generated and provided in the current data product.
      1. Three-contract aggregate model: this model uses weighted futures prices. The weighted price comes from averaging Chicago Soft Red Winter Wheat futures contracts traded on the CBOT, Kansas City Hard Red Winter Wheat futures contracts traded on the CBOT (formerly KCBT), and Minneapolis Hard Red Spring Wheat futures contracts traded on the Minneapolis Grain Exchange (MGE) by their contract weights. The contract weights are decided by the most recent wheat production estimates or projections by class for a given marketing year, and their formula is:
        • Weight of Chicago contract = (Soft Red Winter wheat production + Soft White Winter wheat production)/All wheat production.
        • Weight of Kansas City contract = (Hard Red Winter wheat production + Hard White Winter wheat production)/All wheat production.
        • Weight of Minneapolis contract = (All Spring wheat production + Durum wheat production)/All wheat production
        • Wheat production by class estimates and projections are from USDA NASS Crop Production report and Small Grains Annual Summary report.
      2. Single-contract model: this model only uses Chicago Soft Red Winter Wheat futures contracts traded on the CBOT.
    • Upland cotton: cotton futures prices from futures contracts traded on the Intercontinental Exchange (ICE).
  • Price received (monthly): this data is the monthly average price received by producers. Released by USDA, NASS Agricultural Prices reports. As of January 1, 2015, NASS discontinued reporting preliminary mid-month prices for the most current month and instead reports only full-month prices 1 month later. The data product had used the preliminary prices to compute forecasts prior to January 1, 2015.
  • Basis (monthly): the monthly basis is the monthly NASS price received less monthly average of the daily (Thursday) nearby futures settlement prices for a given month. Specifics for the nearby futures contract schedule are presented in the following table: 
Table 1. Nearby futures contract matching schedule
Corn Soybeans Wheat Upland Cotton
Marketing
year
month		 Futures
nearby
contract		 Marketing
year
month		 Futures
nearby
contract		 Marketing
year
month		 Futures
nearby
contract		 Marketing
year
month		 Futures
nearby
contract
September December September November June July August October
October December October November July September September October
November December November January August September October December
December March December January September December November December
January March January March October December December March
February March February March November December January March
March May March May December March February March
April May April May January March March May
May July May July February March April May
June July June July March May May July
July September July August April May June July
August September August September May May July July
  • Marketing percentage (monthly): the data is the proportion of the marketing year’s crop that is marketed in a given month, which is used as monthly weights for calculating marketing year average prices. Released by USDA, NASS Agricultural Prices reports. For cotton, currently raw monthly marketings numbers are used to generate monthly marketing percentages at the end of each August before official marketing percentages are released at the end of each September.
  • Marketing year average (MYA) price (yearly): the marketing year average price data is from USDA, NASS Agricultural Prices reports, which is equal to the sum of the product of monthly prices received and monthly marketing percentages for each month during the 12-month marketing year. Also known as season-average price. The 12-month duration of a marketing year for each commodity is:
    • Corn and soybeans: from September to August.
    • Wheat: from June to May.
    • Cotton: from August to July.
  • WASDE MYA price forecast (monthly): each month USDA, WASDE report releases USDA’s official MYA price (SAP) forecasts, which can be compared to the model forecasts from this data product. Historically, the WASDE report published a range forecast for the MYA price, and the midpoint of the range forecast is used in this data product. Starting in May 2019, the WASDE report began publishing a point forecast for the MYA price.
  • Farm bill program parameters:
    • Marketing years 2002/03 through 2013/14: the parameters include target price (yearly), direct payment rate (yearly), and national average loan rate (yearly) from the commodity program of the 2002 through 2008 Farm Acts.
    • Marketing years 2014/15 and beyond: the parameters include reference price (yearly) and national average loan rate (yearly) from the commodity program of the 2014 and 2018 Farm Acts. Also see USDA, FSA webpage.

Forecast Procedure 

This data product provides weekly model forecasts for Marketing Year Average (MYA) prices (also known as Season-Average Price; SAP), counter-cyclical payment (CCP) rates (marketing years 2002/03 through 2013/14), price loss coverage (PLC) payment rates (marketing years 2014/15 and beyond), and county and individual agricultural risk coverage (ARC-CO and ARC-IC) prices (marketing years 2014/15 and beyond). The output forecasts are provided in an output csv file. Notice the model forecasts are not official USDA forecasts. USDA official MYA price (SAP) forecasts (from USDA, WASDE report) and their implied CCP rate, PLC payment rate, and ARC-CO and ARC-IC price forecasts are also provided in this data product for comparisons. The forecasts are made weekly using the most recently available data as of each Thursday and updated on ERS’s webpage once a month.

Forecast procedures are provided below with an example for corn for marketing year 2024/25 made on February 6, 2025 (table 2):

  • MYA price (SAP) forecast:
    • Step #1: obtain U.S. monthly price received data. Official price received data is always used if it is available from USDA, NASS for any month during the marketing year; otherwise, monthly price received forecasts are needed for the months without actual monthly price received data. This data is provided in the csv input data file [inputdata.csv].
    • Step #2: obtain daily futures settlement prices of nearby contracts on the forecasting date; the nearby futures contract matching schedule is presented in table 1. If no settlement price is available on the forecasting date, the most recent available settlement prices as of the forecast date are used. No futures price is used if the nearby futures contract is already expired for a given month. This data is provided in the csv input data file [inputdata.csv].
    • Step #3: obtain monthly marketing percentage data and construct the monthly averages. A 5-year monthly average is used for corn, soybeans, and wheat (for example, averaging January marketing percentages in 5 recent years); a 7-year Olympic average is used for cotton (an Olympic average is an average dropping the highest and lowest data points). The most recent marketing years with available data are used for calculating the averages. Notice the marketing years used for calculating monthly marketing percentage averages should be used for calculating monthly basis averages in Step #4. The monthly marketing percentage data is provided in the csv input data file [inputdata.csv].
    • Step #4: obtain monthly basis data and construct the monthly averages. A 5-year average monthly basis is used for corn, soybeans, and wheat (for example, averaging January basis in recent 5 years); a 7-year Olympic average monthly basis is used for cotton. Notice the marketing years selected for calculating monthly basis averages should be the same as the marketing years used for calculating monthly marketing percentage averages in Step #3. The monthly basis data is provided in the csv input data file [inputdata.csv].
    • Step #5: construct monthly price received forecasts. Monthly price received forecast is equal to futures nearby contract settlement price on the forecasting date (from Step #2) plus monthly basis average (from Step #4).
    • Step #6: construct monthly composites of official monthly price received and monthly price received forecast. The monthly composite is equal to either the official monthly price received (from Step #1) or the monthly price received forecast (from Step #5) for each month. Official monthly price received data is always used if any is available for months during the marketing year; otherwise, monthly price received forecasts are used for the months without official monthly price received data. Notice if official monthly price received is not available for a given month and its forecast is also not available due to the corresponding nearby futures contract expiration, an interpolation value is used for the month. The interpolation value is the average of the monthly composite of values from the previous month and the next month.
    • Step #7: calculate monthly MYA price weights. The monthly MYA price weight is equal to the product of the monthly composite of official price received and price received forecast (from Step #6) and the monthly marketing percentage average (from Step #3).
    • Step #8: calculate the MYA price forecast. The MYA price forecast for a given marketing year is equal to the sum of monthly MYA price weights (from Step #7) during the 12-month marketing year.
Table 2. Example for constructing a model forecast of MYA price for corn for marketing year 2024/25 made on February 6, 2025
Year-month NASS price received (Step #1) Futures nearby contract year-month (Step #2) Daily futures price based on nearby contract (Step #2) Basis (5-year U.S. average) (Step #4) NASS marketing percentage (5-year U.S. average) (Step #3) Marketing years for basis and marketing percentage average (Step #3 and #4)

Price received forecast (Step #5)

 Composite price received NASS/forecast (Step #6) MYA price weight (Step #7)
  $/bushel   $/bushel $/bushel Percent   $/bushel $/bushel $/bushel
2024-09 3.98 2024-12 NA 0.17 5.98 2019-2023 NA 3.98 0.24
2024-10 3.99 2024-12 NA -0.22 12.68 2019-2023 NA 3.99 0.51
2024-11 4.07 2024-12 NA -0.20 12.28 2019-2023 NA 4.07 0.50
2024-12 4.23 2025-03 4.95 -0.21 9.64 2019-2023 4.74 4.23 0.41
2025-01 NA 2025-03 4.95 -0.28 13.80 2019-2023 4.67 4.67 0.64
2025-02 NA 2025-03 4.95 -0.18 7.32 2019-2023 4.77 4.77 0.35
2025-03 NA 2025-05 5.08 -0.21 7.52 2019-2023 4.87 4.87 0.37
2025-04 NA 2025-05 5.08 -0.27 6.00 2019-2023 4.81 4.81 0.29
2025-05 NA 2025-07 5.11 -0.16 5.34 2019-2023 4.95 4.95 0.26
2025-06 NA 2025-07 5.11 -0.10 7.00 2019-2023 5.01 5.01 0.35
2025-07 NA 2025-09 4.72 0.57 5.90 2019-2023 5.29 5.29 0.31
2025-08 NA 2025-09 4.72 0.53 6.54 2019-2023 5.25 5.25 0.34
Model forecast of the MYA price (Step #8):         4.57 
  • CCP rate forecast (marketing years 2002/03 through 2013/14): the counter-cyclical payment (CCP) rate is the higher of target price less the effective price forecast or zero. The effective price forecast is equal to the direct payment rate plus the higher of the MYA price (SAP) forecast or the national loan rate.
  • PLC payment rate forecast
    • Marketing years 2014/15 through 2018/19: the PLC payment rate forecast is the higher of the reference price less the effective price forecast or zero. The effective price forecast is the higher of the MYA price (SAP) forecast or national loan rate.
    • Marketing years 2019/20 and beyond: the PLC payment rate forecast is the effective reference price less the effective price forecast. The effective reference price is the greater of the reference price or 85 percent of the average of the MYA price from the preceding 5 years, excluding the highest and lowest prices, capped at 115 percent of the statutory reference price. Notice the 5 marketing years used for calculating the average MYA price have a 1-year gap to the program year, for example, the 2025 program uses MYA prices from 2019/20 to 2023/24. If any official MYA price for the 5 marketing years is not available before the forecast date, its MYA price model forecast would be used for forecasting the effective reference price. The effective price forecast is the higher of MYA price (SAP) forecast or the national loan rate.
  • ARC-CO and ARC-IC price forecast: ARC-CO and ARC-IC price forecast is the higher of MYA price (SAP) forecast or the national loan rate.

Measures of Accuracy

Measures of accuracy were discussed and evaluated in ERS reports, see Merits of an Aggregate Futures Price Forecasting Model for the All Wheat U.S. Season-Average Farm Price, Forecasting the Counter-Cyclical Payment Rate for U.S. Corn: An Application of the Futures Price Forecasting Model , and Forecasting the U.S. Season-Average Farm Price of Upland Cotton: Derivation of a Futures Price Forecasting Model.

Strengths and Limitations

This data product uses a market data-driven forecast model that depends on futures prices and USDA, NASS data. The procedure is transparent, and the input data is publicly available. The model can be further updated by users weekly or daily using more recent futures prices or other basis and marketing percentage values. Academic research over decades has shown U.S. agricultural futures prices generally provide good forecasts of subsequent prices; however, they can be biased in the short term under certain market conditions. This type of forecast model using futures prices has been providing input in the development of USDA official MYA price (SAP) projections released in USDA WASDE reports. Although the data product’s model forecasts are unofficial, they can supplement official projections. Additionally, the model could provide forecasts with a longer forecast horizon than WASDE projections as the earliest USDA official forecast for a given marketing year is released in the May before the start of the marketing year.

Resources

Recommended Citation

U.S. Department of Agriculture, Economic Research Service. Season-average price forecasts.