Representative Farms Economic Outlook for the December 2005 FAPRI/AFPC Baseline

The Agricultural and Food Policy Center (AFPC) at Texas A&M University develops and maintains data to simulate 102 representative crop and livestock operations in major production areas in 28 states. The chief purpose of this analysis is to project those farms’ economic viability for 2005 through 2011. The data necessary to simulate the economic activity of these operations is developed through ongoing cooperation with panels of agricultural producers in each of these states. The Food and Agricultural Policy Research Institute (FAPRI) provided projected prices, policy variables, and input inflation rates in their December 2005 Baseline. Under the December 2005 Baseline, 12 of the 66 crop farms are considered in good liquidity condition (less than a 25 percent chance of negative ending cash during 2005-2011). Five crop farms have between a 25 percent and a 50 percent likelihood of negative ending cash. The remaining 49 crop farms have greater than a 50 percent of negative ending cash. Additionally, 22 of the 66 crop farms are considered in good equity position (less than a 25 percent chance of decreasing real net worth during 2005-2011). Ten crop farms have between a 25 percent and 50 percent likelihood of losing real net worth, and 34 crop farms have greater than a 50 percent probability of decreasing real net worth.