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Abstract
The farm level economic impacts of the Farm Security and Rural Investment Act of 2002 (2002 Farm
Bill) on representative crop, dairy, and livestock operations are projected in this report. The analysis was
conducted over the 2007-2012 planning horizon using FLIPSIM, AFPC’s whole farm simulation model. Data
to simulate agricultural operations in the nation’s major production regions came from two sources:
• Producer panel cooperation to develop economic information to describe and simulate representative
crop, livestock, and dairy farms.
• Projected prices, policy variables, and input inflation rates from the Food and Agricultural Policy
Research Institute (FAPRI) December 2007 Baseline.
The FLIPSIM policy simulation model incorporates the historical risk faced by agricultural producers for
prices and production. This report presents the results of the December 2007 Baseline in a risk context using
selected simulated probabilities and ranges for annual net cash farm income values. The probability of a farm
experiencing a negative ending cash balance and the probability of a farm losing real net worth are included as
indicators of the cash flow and equity risks facing producers through the year 2012.
This report is organized into ten sections. The first section summarizes the process used to develop the
representative farms and the key assumptions utilized for the farm level analysis. The second section
summarizes the FAPRI December 2007 Baseline and the policy and price assumptions used for the
representative farm analyses. The third through sixth sections present the results of the simulation analyses for
feed grain, wheat, cotton, and rice farms. The seventh and eighth sections summarize simulation results for
dairy and cattle. Two appendices constitute the final sections of the report. Appendix A provides tables to
summarize the physical and financial characteristics for each of the representative farms. Appendix B provides
the names of producers, land grant faculty, and industry leaders who cooperated in the panel interview process
to develop the representative farms.