This report provides longrun projections for the agricultural sector to 2023. Major forces and uncertainties affecting future agricultural markets are discussed, such as prospects for long-term global economic growth and population trends. Projections cover production and consumption for agricultural commodities, global agricultural trade and U.S. exports, commodity prices, and aggregate indicators of the sector, such as farm income.
The projections are a conditional scenario based on specific assumptions about the macroeconomy, agricultural and trade policies, the weather, and international developments. The report assumes that there are no domestic or external shocks that would affect global agricultural markets. Normal weather with trend crop production yields is generally assumed. Provisions of the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Act), the Energy Independence and Security Act of 2007, and the Energy Improvement and Extension Act of 2008 are assumed to be extended and remain in effect through the projection period. Thus, the projections are not intended to be a forecast of what the future will be, but instead are a description of what would be expected to happen under these very specific circumstances and assumptions. As such, the projections provide a neutral reference scenario that can serve as a point of departure for discussion of alternative farm-sector outcomes that could result under different domestic or international assumptions.
Planted area for major field crops has been relatively high in recent years in response to high prices. As U.S. and global supplies rebound and prices decline for most crops, U.S. planted acreage for these crops is projected to fall over the next several years in response to lower producer returns.
Over the longer run, steady global economic growth provides a foundation for continuing strong crop demand. Although corn-based ethanol production in the United States has rebounded from 2012’s decline, the pace of further expansion slows. Nonetheless, the combination of world economic growth, a continued low-valued dollar, and some further expansion of global biofuels production supports longer run gains in world consumption and trade of crops. Prices are projected to fall from recent record highs but remain above pre-2007 levels for many crops.
Agricultural programs of The Food, Conservation, and Energy Act of 2008 (the 2008 Farm Act) are assumed to be extended through the projection period.
U.S. Farm Income and Agricultural Trade Value
High commodity prices led to record values of U.S. agricultural exports and U.S. net farm income in 2013. Projected reductions in prices for most major crops over the next several years result in declines in export values and farm cash receipts 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. Although farm production expenses also increase beyond 2015, net farm income remains historically high.