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Are Changes in Cost of Production and Statutory Reference Prices Related in the House Agriculture Committee 2024 Farm Bill?

Author

Listed:
  • Zulauf, Carl
  • Schnitkey, Gary
  • Coppess, Jonathan
  • Paulson, Nick

Abstract

Between 2014, when current statutory reference prices were first implemented, and 2024; the economic cost of production per trend output unit has increased +15% on average for the nine crops for which this cost is calculated by USDA, ERS (US Department of Agriculture, Economic Research Service). The House Agriculture Committee Farm Bill of May 24, 2024 increases statutory reference prices for the nine crops by +14% on average. While the average percent increase in costs and reference prices is similar, the relationship between these two percent changes is limited for individual crops. For example, statutory references prices are increased +10% for barley and +14% for seed cotton even though their economic cost of production per trend output unit is lower in 2024 than 2014. The increase in cost thus has limited ability to explain and therefore justify the mix of changes in individual crop statutory reference prices in the House Agriculture Committee Farm Bill, particularly since the proposed reference prices vary widely relative to the 2024 cost to produce individual crops.

Suggested Citation

  • Zulauf, Carl & Schnitkey, Gary & Coppess, Jonathan & Paulson, Nick, 2025. "Are Changes in Cost of Production and Statutory Reference Prices Related in the House Agriculture Committee 2024 Farm Bill?," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 14(101).
    • Handle: RePEc:ags:illufd:358505
    DOI: 10.22004/ag.econ.358505
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