The Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI-MU) provides objective analysis of markets and policies. Since its inception in 1984, a primary purpose of FAPRI-MU has been to provide decision makers with information about how changes in policies or market conditions affect the agricultural sector.

We use economic models of key commodity markets to estimate how different policy options affect prices and quantities, producers, consumers, and government costs. We work with collaborators at MU and other institutions so that the analysis can estimate impacts on crop, livestock, and biofuel markets in the U.S. and other countries.

FAPRI-MU economic models represent policies as they actually work. Many policies or policy options are tied to market conditions in some way, with revenue or price triggers. To study policies in many different possible cases, we often use stochastic analysis. We run an economic model many, many times with each instance representing a different set of market conditions. Using this method, we can assess how policies affect markets given different crop yield shocks or petroleum price swings.

FAPRI-MU puts a great deal of effort into maintaining the integrity and independence of its analysis. Economic models are validated by interaction with other scientists and market experts. Government and industry experts provide advice in formal reviews and through informal interaction. FAPRI-MU research is subject to peer review and published in scientific journals.

One key output is a “baseline.” This is a projection of market conditions into the future. Baselines assume that current or announced policies are extended into the future. Baselines project market prices and quantities, producer returns, consumer prices and expenditures, and government costs.

We also publish reports that assess policy options or proposals. The effects of policies on markets, producers, consumers, and taxpayers are estimated by changing the assumptions representing this policy from the baseline levels, solving the economic models with the new assumption, and comparing the model output to the baseline levels.

FAPRI-MU does not advocate or oppose specific policies, but rather provides the information and analysis people need to make more informed choices.