USDA Agricultural Projections to 2023, released in February 2014, provide longrun projections for the farm sector for the next 10 years. These annual projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income.
Important assumptions for the projections include the following:
- Steady global economic growth is assumed in the projections. Developing countries grow faster than developed countries and, thus, account for an increasing share of the world economy.
- Increases in world population continue to slow. Population growth in most developing countries remains above that in the rest of the world.
- Population gains in developing countries--along with higher incomes, increased urbanization, and expansion of the middle class--are particularly important for growth in global food demand.
- Continued global expansion of biofuels further adds to world demand for agricultural products.
Key results in the projections include the following:
- Prices for major crops decrease in the early years of the projections as global production responds to recent high prices.
- Lower feed costs improve livestock sector returns and provide economic incentives for projected longrun increases in U.S. meat production.
- World economic growth and demand for biofuels combine to support longer run increases in consumption, trade, and prices for agricultural products.
- Following the near-term declines, prices for corn, wheat, oilseeds, and many other crops remain historically high.
- Declining crop prices lead to reductions in the values of U.S. agricultural exports and farm cash receipts rise through 2016. Export values and cash receipts then grow over the rest of the projection period as steady domestic and international economic growth, a weak U.S. dollar, and continuing production of biofuels support longer term demand for U.S. agricultural products. Production expenses also rise beyond 2015, but net farm income remains historically high.