Changes in the Index Construction and Data Series of Farm Prices Received and Paid

DEPARTMENT OF AGRICULTURE

National Agricultural Statistics Service

Changes in the Index Construction and Data Series of Farm Prices

Received and Paid

AGENCY: National Agricultural Statistics Service (NASS), United States

Department of Agriculture (USDA).

ACTION: Notice.

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SUMMARY: Notice is hereby given that NASS, USDA, plans to change the

construction of the indexes and data series of farm prices received and

paid.

FOR FURTHER INFORMATION CONTACT: Questions or comments on this change

should be sent to Robert W. Milton, Chief, Economic Statistics Branch,

NASS/USDA, Room 5908 South Building, Washington, D.C. 20250; telephone

(202) 720-3570, within 30 days of this notice.

SUPPLEMENTARY INFORMATION: NASS is updating the weights and changing

the construction of its indexes of prices received and paid by farmers.

In conjunction with the new index procedures, additional changes to the

prices received and paid data series will be made as itemized below.

All changes will take effect beginning in January 1995 with data

published in Agricultural Prices.

The prices received and paid indexes are used in computing the

parity prices that NASS is required by statute to publish monthly (7

U.S.C. 1301(a)(1)(c)). The base or fixed weights used in constructing

the indexes have become outdated as the mix of commodities farmers

produce and input items they purchase have changed and are expected to

continue to change over time.

Major changes to the weights and construction of the price indexes

and to the prices received and paid data series are:

(1) A 1990-92 reference and base period will replace the current

1977 reference and 1971-73 base period.

(2) Five-year moving average weights will replace the current fixed

1971-73 base period weights.

(3) Monthly marketing weights that reflect seasonal marketing

patterns will be added for prices received commodities.

(4) The 36-month (1990-92) average prices used as base period

prices for the prices received indexes will be weighted by monthly

volumes of farmers' sales. The current base period (1971-73) prices are

simple averages.

(5) The new indexes will be constructed by multiplying the ratios

of the current prices to the base period prices by the moving average

weights (adjusted for seasonal marketing patterns for the prices

received indexes).

(6) Crop coverage will be expanded in the prices received indexes,

largely for fruits, vegetables, greenhouse/nursery products, and

specialty crops.

(7) Prices Paid Surveys for feed, fuels, fertilizer, agricultural

chemicals, retail seeds, and farm machinery will be conducted annually

in April. The prices paid indexes will still be updated quarterly based

on changes in appropriate Bureau of Labor Statistics (BLS) component

indexes. Prices Paid Surveys for autos and trucks, building materials,

farm supplies, motor supplies, and marketing containers will be

discontinued. BLS component indexes will be used to measure price

changes for these and other input items. Feeder livestock price surveys

will continue quarterly.

(8) Separate prices paid indexes for crop and livestock farms will

be computed and published.

(9) The 1910-14=100 price indexes required by statute (7 U.S.C.

1301(a)(1)(c)) for computing parity prices will be determined based on

the changes in the new 1990-92=100 indexes.

Beginning in January 1995, the new 1990-92 indexes will be

published monthly in Agricultural Prices for prices received and

quarterly for prices paid. The new 1990-92 based indexes will be

constructed back to 1975. The revised 1910-14 indexes and the new 1990-

92 indexes covering the 1975-93 period will be published in a separate

release by the end of January 1995. The old 1977 indexes, except for

the fresh market fruit and vegetable and seasonally adjusted prices

received indexes, will be available upon request during 1995 but

discontinued thereafter. The fresh market fruit and vegetable indexes

and the seasonally adjusted indexes now published for fresh market

fruits, fresh market vegetables, potatoes and dry beans, dairy

products, and poultry and eggs will be discontinued in January 1995.

Prices paid estimates for building materials, farm and motor supplies,

and new autos and trucks will no longer be published.

The changes in the construction of the indexes will simplify

updating the component items and reference periods while maintaining

appropriate weights. The new index procedures will provide long-term

comparability in computing future index numbers, reduce respondent

burden, and better utilize existing Government data. The overall

changes will not have a significant effect on the levels of the prices

received and prices paid indexes, and, therefore, will have very little

effect on the levels of parity prices.

Done in Washington, D.C., this 24th day of October 1994.

Rich Allen,

Acting Administrator.

[FR Doc. 94-26767 Filed 10-27-94; 8:45 am]

BILLING CODE 3410-20-P