Agricultural Baseline Projections: Global Agricultural Trade, 2008-2017

Overview Summary of Projections Macroeconomic Assumptions U.S. Crops U.S. Livestock U.S. Agricultural Sector Measures Global Agricultural Trade Recommended Readings Recommended Data USDA Baseline Process Questions and Answers

World consumption of many grain, oilseed, and meats has exceeded production in the past several years. As a result, global stocks have dropped sharply—to record lows in some cases—and prices have risen. Tight market conditions are projected to persist for many commodities over most of the coming decade, keeping agricultural commodity prices high.

Robust global economic growth provides a foundation for gains in world demand for agricultural products. Rapid expansion of ethanol and biodiesel production in some countries also adds to the growth in global agricultural demand.

The growing economies of developing countries are the main source of growth in world agricultural demand and trade. Food consumption and feed use are particularly responsive to income growth in those countries, with movement away from staple foods and increased diversification of diets. The import demand of developing countries is further reinforced by population growth rates that remain nearly twice that of developed countries.

International trade in animal products, however, remains heavily dependent on demand from developed countries and from the market access achieved under existing trade agreements. Strong policy support for domestically produced meat is expected to motivate growth in feed grain imports, especially in regions where limited land availability or agroclimatic conditions preclude expanding domestic crop production, such as North Africa, the Middle East, and East and Southeast Asia.

Traditional exporters of a wide range of agricultural commodities, such as Argentina, Australia, Canada, the European Union (EU-27), and the United States, remain important in the coming decade. But countries that are making significant investments in their agricultural sectors, including Brazil, Russia, Ukraine, and Kazakhstan, are expected to have an increasing presence in export markets for basic agricultural commodities.

World agricultural production rises in response to high prices and technology enhancements. However, limited ability to expand planted area in many countries and higher input costs, particularly for energy intensive inputs such as fuel and fertilizer, constrain production growth and raise uncertainties about future supply response.

Global trade in soybeans and soybean products has risen rapidly since the early 1990s, and has surpassed not only wheat—the traditional leader in agricultural commodity trade—but also total coarse grains (corn, barley, sorghum, rye, oats, millet, and mixed grains). Continued strong growth in global demand for vegetable oil and protein meal, particularly in China, is expected to maintain soybean and soybean-product trade well above wheat and coarse grains trade throughout the next decade.

• Wheat, coarse grains, and oilseeds (including soybeans) compete with each other and with other crops for limited cropland. Higher prices for vegetable oils, partially the result of increased demand for biodiesel, are bringing previously uncropped land in Brazil and Indonesia into soybean and palm oil production.

• In the projections, the growth in total area planted to all crops rises less than a half-percent per year in most countries. Area expansion occurs more rapidly in countries with a reserve of available land and policies that enable farmers to respond to higher projected world prices. Such countries include Brazil, Argentina, other South American countries, some Eastern European countries, and Ukraine. About two-thirds of the growth in global production is derived from rising yields. The growth rate in crop yields has slowed somewhat during the last several decades and is projected to continue to do so.

• The impact of slowing growth in total crop production is partially offset by slowing growth in world population. Nonetheless, population is a significant factor driving overall growth in demand for agricultural products. Additionally, rising per capita income in many countries generates growth in demand for vegetable oils, livestock products, and horticultural products.

• In the coming decade, overall gains in global grain trade come from a broad range of countries, particularly from countries in Africa and the Middle East. Also, China exports less grain and imports more.

Definition of country groups

Growth in wheat imports is concentrated in those developing countries where robust growth in income and population underpins increases in demand. Important growth markets include Sub-Saharan Africa, Egypt, Pakistan, Algeria, Indonesia, the Philippines, and Brazil. World wheat trade (including flour) expands by more than 26 million tons (23 percent) between 2008 and 2017 to 137 million tons.

• Egypt maintains its position as the world's largest importing country, as imports climb slowly to nearly 9 million tons. Imports by Brazil, another large importer, are projected to exceed 8 million tons. Brazil's climate generally does not favor wheat, and in some key wheat-producing states, winter corn is expected to have better returns than wheat.

• Imports by developing countries in Sub-Saharan Africa, North Africa, and the Middle East rise nearly 12 million tons and account for 45 percent of the total increase in world wheat trade. In most developing countries, little change in per capita wheat consumption is expected, but imports expand modestly because of population growth and limited potential to expand production.

• Changing consumption patterns will boost wheat imports by some major importing countries. In Indonesia, strong economic growth and diversification of diets are projected to increase per capita wheat consumption. Mexican consumers are projected to continue substituting wheat for corn in their diets as incomes rise.

• Lower wheat-to-corn price ratios during most of the projection period enable wheat to compete effectively with corn for feed use in a number of countries. Europe is expected to continue to account for the largest share of global wheat feeding.

• China has been a small net exporter of wheat in recent years, but production constraints cause it to become a small net importer toward the end of the projections.

Definition of country groups

The top five wheat-exporting nations (the United States, Australia, the EU, Argentina, and Canada) account for 70 percent of world trade in 2008-17. This is down from 89 percent in 1997/98, mostly due to increased exports from the Black Sea area. U.S. wheat exports are projected to account for less than 19 percent of global wheat trade at the end of the projection period, down from 25 percent in the past 5 years. The global stocks-to-use ratio has declined sharply during the last half decade to the lowest level on record. Despite a significant rebound in global production, low stocks and relatively high prices are projected to persist for most of the next decade.

• Shares of the world wheat market held by Canada and the United States decline slightly, while shares increase for the EU, Ukraine, Russia, Australia, and Argentina.

• In Canada, increased demand for vegetable oils, especially rapeseed oil for biodiesel production, and increasing demand for barley are expected to reduce wheat area, and limit any growth in wheat exports.

• Ukraine, Russia, and Kazakhstan have become significant wheat exporters in recent years. Low costs of production and new investment in their agricultural sectors have enabled their combined world market share to climb to about 20 percent in the last 2 years. Exports from Ukraine and Russia are projected to continue gaining market share, more than offsetting a slight decline in the share held by Kazakhstan. However, because of the region's highly variable weather and yields, year-to-year volatility in production and trade can be expected. Also, continued real appreciation of these countries' currencies, caused mainly by strong foreign exchange earnings and domestic inflation, could moderate the rise in exports.

• Wheat exports by Turkey and other smaller exporters change little or trend slowly downward during the projection period. Although India has exported some wheat in recent years, exports are expected to be minimal and imports to increase as domestic demand outpaces production and stocks remain relatively low.

Growth in coarse grain trade is strongly linked to expansion of livestock production in regions unable to meet their own feed needs. Key growth markets include China, Mexico, North Africa, the Middle East, and Southeast Asia. Japan and South Korea are large but mature import markets for coarse grains.

• Corn is the dominant feed grain traded in international markets. Corn accounts for an average of 79 percent of all coarse grain trade through the projection period, followed by barley (15 percent) and sorghum (4 percent).

• Commercialization of livestock feeding has been a driving force behind the growing dominance of corn in international feed grain markets. Hogs and ruminants, such as cattle and sheep, are capable of digesting a broad range of feedstuffs, making demand relatively price-sensitive across alternate feed sources. However, as pork and poultry production become increasingly commercialized, higher quality feeds are used, boosting the demand for corn and soybean meal.

• Mexico's composition of coarse grain imports is expected to change during the early part of the projection period. Under the North American Free Trade Agreement (NAFTA), Mexico's over-quota tariff on U.S. and Canadian corn ended on January 1, 2008. Consequently, Mexico's grain imports shift more to corn rather than sorghum. Also, after 2008/09, Mexico's imports of kibbled and cracked corn (processed corn that has already been tariff free) are projected to be increasingly replaced by whole-grain corn. Mexico's corn imports continue to rise through the rest of the projections, while sorghum imports resume growth after 2009/10.

Definition of country groups

World coarse grain trade expands nearly 21 million tons (18 percent) from 2008 to 2017. About two-thirds of global coarse grain production is used as animal feed. Industrial uses, such as starch, ethanol, and malt production, are smaller but growing. Food use of coarse grains, concentrated in parts of Latin America, Africa, and Asia, is projected to continue declining.

• World prices for grains have risen during the last several years as global stocks of grain declined sharply. Although the higher prices are projected to stimulate grain production, neither stocks-to-use ratios nor prices return to levels common during the last three decades.

• Steady longrun growth in the livestock sectors of developing countries in Asia, Latin America, North Africa, and the Middle East is projected to account for most of the growth in world coarse grain imports during the next decade.

• Mexico's corn imports are projected to rise from 8.8 million tons in 2006/07 to 15 million tons in 2017. Imports will be stimulated by rising poultry production and the elimination of Mexico's over-quota tariff on U.S. and Canadian corn on January 1, 2008. Some corn imports will substitute for imports of kibbled corn and sorghum, which already had tariff-free status.

• North Africa and the Middle East experience continued growth in import demand for grain and protein meals through 2017 as rising populations and increasing incomes sustain strong demand growth for domestically-produced animal products. In Egypt, government policy has shifted toward allowing more poultry meat imports. Still, poultry production is projected to rise, boosting corn imports more than 1 million tons.

• In Japan, South Korea, and Taiwan, environmental regulations constrain meat production, which results in increasing meat imports and no growth in coarse grain imports.

• The EU's corn and sorghum imports decline in 2008 as production returns to normal levels, but in subsequent years corn imports from Other Europe, particularly Serbia, are expected to increase.

• Countries in Southeast Asia raise corn imports more than 1.5 million tons (30 percent) during the projection period as their increased demand for livestock products exceeds their capacity to grow more feed grains.

Definition of country groups

The United States dominates world trade in coarse grains, particularly corn. However, increasing use of corn for U.S. ethanol production and reduced world trade are assumed to limit U.S. export growth early in the projection period. During the next half decade, some countries respond to higher world prices by increasing corn production and exports—most notably Argentina and Ukraine. Still, U.S. corn exports are projected to resume growth during the middle part of the projection period after the ramp-up in domestic ethanol production slows. The U.S. share of world corn trade stays close to 60 percent as few countries have the capability to respond to rising international demand for corn.

• Argentina, with a small domestic market, remains the world's second-largest corn exporter. Argentina's corn planted area gradually increases in response to higher prices. Corn exports rise steadily by 27 percent to more than 21 million tons. Argentina and other South American countries increase corn exports to Chile to support its expanding pork exports to South Korea.

• Corn exports from some countries of the former Soviet Union, primarily Ukraine, double to 7 million tons by 2017. Favorable resource endowments, increasing economic openness, and greater investment in their agricultural sectors stimulate corn production, and combined with increasing meat imports, leave a corn surplus available for export.

• Brazil's corn exports are at record high levels during the early years of the projections in response to higher corn prices relative to soybean prices. In the last several years, Brazil has targeted the EU's demand for non-genetically modified grain. This ability is assumed to diminish as Brazil legalizes planting genetically modified varieties of corn and the EU reduces imports. Also, strong growth in domestic demand from its livestock and poultry sectors and the profitability of growing soybeans limits corn exports.

• China's corn exports decline in the projections, reflecting strengthening domestic demand driven by its expanding livestock and industrial sectors.

Although Chinese corn production is projected to increase, China becomes a net corn importer midway through the projection period as demand for livestock feed overtakes China's internal supplies of corn. Due to regional supply and demand differences, China continues to export corn throughout the projection period, although in declining amounts (see note below).

• Corn is the favored crop in northeast China. Proximity to Asian markets, especially South Korea, provides a nearby source of demand, while various government measures—including waivers of certain transportation construction taxes—keep corn exports competitively priced in international markets. High ocean-freight rates raise the delivered cost of U.S. corn to Asian markets, another factor that keeps Chinese corn competitive. Shipments of corn from northeast China to the country's southern markets are limited by China's high internal transportation costs.

• As China's corn consumption continues to grow, the country is projected to increase imports and reduce exports, and to eventually become a net corn importer by the middle of the projection period. Livestock feeding continues to increase as income growth raises meat demand. Industrial use of corn, especially for starch, is also expected to grow robustly in China, but direct human consumption declines.

Definition of country groups

Global barley trade expands 3.6 million tons (22 percent) during the projection period. Rising demand for both malting and feed barley underpin the increased trade.

• Feed barley imports by North African and Middle Eastern countries grow steadily over the next decade. In the mid-1990s, corn overtook barley as the principal coarse grain imported by these countries, due mainly to rising poultry production. This pattern is expected to continue through the projection period. However, the North Africa and Middle East region is expected to remain the world's largest barley importing area.

• Saudi Arabia—the world's foremost barley importer—accounts for over 35 percent of world barley trade through the coming decade. Saudi Arabia's barley imports are used primarily as feed for camels, goats, and sheep.

• International demand for malting barley is boosted by strong growth in beer demand in many developing countries, notably China—the world's largest malting barley importer. China's beer demand is rising steadily due to growth in incomes and population. Expansion in China's brewing capacity is being aided by foreign investment. China's breweries also use rice and other grains to produce alcoholic beverages. Australia and Canada are China's main sources of malting barley imports.

Definition of country groups

Historically, global barley exports have originated primarily from the EU, Australia, and Canada. However, Ukraine and, to a lesser extent, Russia have emerged as important competitors in international feed barley markets and remain so throughout the projection period.

• Barley production is expected to increase in the EU as a result of Common Agricultural Policy (CAP) reform. The abolition of EU intervention for rye, combined with high barley prices, will stimulate the allocation of more area to barley production. EU exports to non-EU countries are projected to climb nearly 50 percent to 4.7 million tons over the projection period (24 percent of world trade), as projected prices are high enough that the EU is able to export barley without subsidies.

• The FSU remains a major barley exporter throughout the coming decade as exports surpass 8 million tons. Together, the FSU and EU account for nearly 65 percent of world barley exports by 2017.

• Malting barley is a different quality than feed barley and commands a substantial price premium over feed barley. This premium is expected to influence planting decisions in Canada and Australia and, in both countries, malting barley's share of total barley area rises during the projection period. However, some of Canada's total barley area shifts to canola because of stronger prices due to the demand for biodiesel feedstocks, and total barley exports trend downward during the coming decade.

World sorghum trade, which averaged nearly 6.5 million tons during the last decade, declines to below 5 million tons in the middle of the projection period before rising slightly through the remainder of the coming decade. This trade is driven almost entirely by U.S. exports to Mexico and Japan.

• Mexico is the world's leading sorghum importer in most years. Some sorghum imports are expected to be replaced by corn imports because, under NAFTA, Mexico's over-quota tariff on U.S. and Canadian corn ended on January 1, 2008. Mexico's sorghum imports are projected to increase slightly in the later years, but remain below 2.7 million tons. Even at this reduced import level, Mexico accounts for more than 45 percent of world sorghum imports.

• The EU normally imports small quantities of sorghum, but became the world's largest importer in 2007/08. As the EU's corn production declined in 2006 and again in 2007, the region increased imports of nongenetically modified corn, generally from Brazil. However, as exportable world supplies of nongenetically modified corn became more limited and corn prices jumped, the EU began to import sorghum as an alternative. EU corn production is assumed to return to normal levels in 2008 and its 2008/09 imports of both corn and sorghum are projected to recede.

• Japan imports a fairly constant volume of sorghum (1.3 million tons) throughout the period to maintain diversity and stability in its feed grain supplies.

• The United States is the largest exporter of sorghum, accounting for more than 80 percent of world trade in recent years. During most of the projection period, the U.S. share remains in the 80-83 percent range even though some of its sorghum exports to Mexico shift to corn.

• The primary sorghum markets for Argentina, the world's second largest exporter, are Japan, Chile, and Europe. In Argentina, prices and profitability are expected to favor planting soybeans and corn, so sorghum exports remain relatively flat during the projection period.

• Brazil has begun to export small quantities of sorghum and the volume is projected to rise during the projection period. In the Central-West region of Brazil, sorghum is increasingly planted during the dry season between crops of soybeans or cotton.

Strong income and population growth in developing countries generate increasing demand for vegetable oils for food consumption and for protein meals used in livestock production. Additional demand is generated by the use of vegetable oils in biodiesel production in some countries. As a result, world trade in soybeans and soybean oil each grow at an average annual rate of 3.3 percent through the projection period, compared with 3.1 percent for soybean meal.

• Prices for vegetable oils rise due to increasing consumer demand in developing countries and the expansion of biodiesel production. As more of the value of oilseeds derives from the oil content relative to the protein meal content, vegetable oil prices rise in comparison to prices for oilseeds and protein meals.

• Many countries with limited opportunity to expand oilseed production continue investment in oilseed crushing capacity, such as China and some countries in North Africa, the Middle East, and South Asia. As a result, import demand for soybeans and rapeseed grows rapidly. However, strong competition in international protein meal markets is expected to shift some of the import demand from oilseeds to cheaper meals. The competitive pressure of new oilseed crushing capacity is expected to result in some inefficient crushers going out of business.

• China's expansion of domestic crushing capacity instead of importing protein meal and vegetable oil significantly influences the composition of world trade by raising global import demand for soybeans and other oilseeds rather than for oilseed products.

• Brazil's rapidly increasing soybean area enables it to gain a larger share of world soybean and soybean meal exports, despite increasing domestic feed use. Its share of world exports of soybeans plus the soybean equivalent of soybean meal rises from about 30-35 percent in recent years to 43 percent by 2017.

• The expansion in Argentine soybean area slows as incentives to grow corn and sunflower seed improve and the conversion of pasture land to crop land slows.

• The EU set-aside rate is assumed to be zero during the projections. Except in 2008, most land previously set aside will be planted to rapeseed destined for biodiesel production.

Definition of country groups

World soybean trade is projected to rise rapidly, climbing more than 27 million metric tons (35 percent) during the next decade.

• The EU was the world's leading importer of soybeans until 2002. However, increases in grain and rapeseed meal feeding and rising imports of soybean meal have resulted in declining soybean imports since then.

• China will face policy decisions regarding tradeoffs in producing or importing corn and soybeans. The projections assume that Chinese policies will support maintaining domestic corn production and importing soybeans. Thus, China accounts for 80 percent of the world's 27-million-ton growth in soybean imports over the next 10 years. Significant investments in oilseed crushing infrastructure by China drive strong gains in soybean imports as China seeks to capture the value added from processing oilseeds into protein meal and vegetable oil. The use of vegetable oils for biofuels production is assumed to have a negligible impact on China's total vegetable oil use.

• East Asia's trade outlook is dominated by a continuing shift from importing feedstuffs to importing meat and other livestock products. As a result, this region's import demand for protein meal and oilseeds does not rise during the coming decade despite rising meat consumption.

• As Argentina seeks to operate its expanding crushing facilities at full capacity, it is projected to import 4 million tons of soybeans from Brazil, Paraguay, Uruguay, and Bolivia by the end of the period.

Definition of country groups

The three leading soybean exporters—the United States, Brazil, and Argentina—have accounted for more than 90 percent of world trade in recent years. Their market share is projected to decline to slightly less than 90 percent as exports rise from minor exporting countries, such as Uruguay, Paraguay, and Bolivia.

• With continuing area gains, Brazil maintains its position as the world's leading exporter of soybeans and soybean products. Combating soybean rust disease increases production costs. However, because of increased domestic demand for soybean meal for feed and soybean oil for human consumption and biodiesel production, soybeans remain more profitable than other crops in most areas of Brazil. It is assumed that some land in southern Brazil will shift from oilseed to corn production during the middle of the projection period in response to higher corn prices and more limited competition from U.S. corn exports. Still, with expanded soybean plantings in the Cerrado regions, the growth rate for Brazil's soybean planted area is projected to average nearly 3.5 percent a year, reaching about 31 million hectares by 2017. Soybean exports are projected to almost double.

• Argentina's export tax rates are higher for soybeans than for soybean products. This favors domestic crushing of whole seeds and exporting the products. Also, Argentina is projected to divert some land from soybeans to corn. As a result, Argentina's soybean exports remain around 8 to 9 million tons.

• Other South American countries, principally Uruguay, Paraguay, and Bolivia, expand exports 40 percent to more than 9 million tons. Four million tons are destined for the crushing industry in Argentina.

• Russia and Ukraine respond to higher international market prices for oilseeds by increasing production of rapeseed and soybeans. Although rapeseed production will be most affected, soybean exports are projected to increase somewhat.

• In the United States, reduced soybean acreage and increased domestic crush limit exportable supplies, but their competitiveness is aided by depreciation of the U.S. dollar.

Definition of country groups

World trade in soybean meal grows briskly during the projections, rising more than 18 million tons (over 30 percent) by 2017. Continuing growth in the demand for livestock products and limited capability to increase oilseed production boost demand for soybean meal by a number of countries with rising middle-income populations. Lower import prices of soybean meal relative to soybeans and grains provide incentives for countries to import soybean meal for inclusion at a higher rate in livestock feed rations.

• The EU remains the world's largest destination for soybean meal throughout the projection period, despite increased domestic feeding of grains. Growth in soybean meal imports is expected to continue even though there will be more rapeseed meal available as a result of the biofuels expansion. Also, an increase in the dairy production quota increases soybean meal feeding.

• The regions of Southeast Asia, Latin America, and North Africa and the Middle East all become larger importers of soybean meal as the demand for livestock feed boosts import demand in a number of countries.

• Mexico's strong growth in demand for protein feed and vegetable oils is projected to continue. The crushing industry in Mexico is also expected to continue expansion. This will boost soybean imports, but soybean meal imports from the United States are also expected to grow rapidly.

Definition of country groups

Argentina, Brazil, and the United States remain the three major exporters in international protein meal markets. Together they account for around 90 percent of total world soybean meal trade during the next 10 years. Argentina, the world's largest soybean meal exporter, increases its share of the world market from around 45 percent in recent years to more than 55 percent after 2008/09. Brazil's share of world exports remains in the 20-25 percent range, while the shares held by the United States and other exporters fall.

• Argentina imposes higher export taxes on soybeans than on soybean products. This has provided an incentive for the country to develop a large oilseed crushing capacity. Argentina maintains high utilization of its growing crushing capacity by importing soybeans from Brazil and other South American countries.

• In Brazil, strong growth in domestic meal consumption due to rapid expansion of the poultry and pork sectors limits increases in soybean meal exports. Also, domestic soybean crushing capacity is not expected to grow as fast as soybean production because Brazil's differential export tax structure favors exporting soybeans rather than soybean meal or soybean oil.

• U.S. soybean meal exports hold steady at around 8 million tons throughout the projections, but the U.S. share of world trade declines steadily from more than 14 percent in recent years to less than 11 percent by 2017.

• The EU continues to be a small but steady exporter of soybean meal to Russia and other East European countries. India remains an exporter, although export volume declines as domestic use, especially for poultry feed, rapidly expands.

Definition of country groups

World demand for soybean oil imports climbs 3.8 million metric tons (33 percent) in the projections, bolstered by increased food use and rising demand for use in biofuel production. China and India are the world's two largest soybean oil importers—importing primarily for food use. In recent years, their combined imports have been around 3.5 million tons, nearly 40 percent of the world total.

• Import demand for soybean oil rises in nearly all countries and regions. Income and population growth in North Africa, the Middle East, and Latin America (particularly Central America and the Caribbean) drive rapid gains in soybean oil imports. Although rising international prices for soybean oil will temper consumption, especially in developing countries, imports by the North Africa and the Middle East region are projected to be exceeded only by those of China.

• India is one of the world's largest soybean oil importers. Factors that contribute to continued growth in imports include burgeoning domestic demand for vegetable oils and limited capacity for domestic production of oilseeds. Low yields, associated with erratic rainfed growing conditions and low input use, inhibit growth of oilseed production in India. Lower Indian tariffs on soybean oil (held down by World Trade Organization (WTO) tariff-binding commitments) compared with tariffs for other vegetable oils support continued large imports of soybean oil.

• China experiences a growing demand for vegetable oils. However, land-use competition from other crops constrains area planted to oilseed crops. Even with strong increases in soybean imports for crush, domestic demand outpaces domestic vegetable oil production and fuels a moderate expansion in soybean oil imports.

• The EU imports more soybean oil to replace some of the rapeseed oil that is used in the production of biodiesel.

Definition of country groups

Argentina's and Brazil's combined share of world soybean oil exports rises from less than 80 percent in recent years to more than 85 percent by the end of the projections.

• Argentina is the leading exporter of soybean oil, reflecting the country's large crushing capacity, its small domestic market for soybean oil, and an export tax structure that favors exports of soybean products rather than soybeans. Increases in soybean crush and soybean oil exports are supported by gains in Argentine soybean production due to extensive double-cropping, further adjustments to crop-pasture rotations, and the addition of marginal lands in the northwest part of the country. Argentina also increases soybean imports from other South American countries in order to more fully utilize its crushing capacity. Growth in Argentina's biodiesel production capacity, with incentives from a lower export tax for biodiesel than for soybean oil, may constrain growth in soybean oil exports in the future.

• Brazil's expansion of soybean production into new areas of cultivation enables it to increase both its volume of soybean oil exports and its share of world trade.

• The United States remains the world's next largest soybean oil exporter. U.S. soybean oil exports are initially constrained by increased use for biodiesel production but expand moderately after 2010/11 as output gains exceed growth in domestic consumption. However, the U.S. share of world trade is projected to be well below the average of recent years.

• In the EU, exportable supplies of vegetable oils are limited by the growth in biodiesel production.

Definition of country groups

Global rice trade is projected to grow 2.2 percent per year from 2008 to 2017. By 2017, global rice trade exceeds 37 million tons, nearly 24 percent above the record set in 2005. The main factors driving the expansion in global trade are a steady growth in demand—largely due to population growth in developing countries—and the inability to significantly boost production in key importing nations.

• Long-grain varieties account for around three-fourths of global rice trade and are expected to account for the bulk of trade growth over the next decade. Medium- and short-grain rice account for 10-12 percent of global trade, with Northeast Asia the largest market. Aromatic rice, primarily basmati and jasmine, makes up most of the rest of global rice trade.

• Indonesia, the Philippines, and Bangladesh become the three largest rice-importing countries by the end of the projection period. By 2017, each country is projected to import 1.9 million tons or more. These three countries have limited ability to expand production and are expected to account for nearly 30 percent of the increase in global rice imports over the next decade.

• In Sub-Saharan Africa and the Middle East, strong demand growth is driven by rapidly expanding populations. Production growth is limited by climate in the Middle East and by infrastructure deficiencies in Sub-Saharan Africa. Sub-Saharan Africa accounts for 27 percent of the increase in world rice trade between 2008 and 2017. Iraq and Saudi Arabia account for most of the increase in imports by the Middle East.

• The Central American and Caribbean region is projected to expand imports over the next decade, increasing about 0.5 million tons to 2.2 million by 2017. Population growth and rising per capita incomes boost rice consumption and raise this region's imports.

• The EU will remain a major market for rice, although import growth will be modest. Consumption growth will be driven by a larger immigrant population. North American imports will also expand over the next decade, with both total and per capita consumption rising. Imports by the former Soviet Union are projected to decline as result of strong production growth and stagnant demand.

Definition of country groups

Asia remains the largest rice-exporting region throughout the projection period.

• Thailand and Vietnam, the world's largest rice-exporting countries, account for half of all rice exports and nearly three-fourths of the growth in world exports in the coming decade. Thailand's exports increase 3.6 million tons to more than 13 million by 2017. Both area and yield are projected to increase in Thailand. Vietnam's export expansion is smaller, from 5.3 to 6.5 million tons, as the area planted to rice is not expected to expand. Per capita consumption declines for both exporters.

• India is currently the third-largest rice exporter. India has been a major exporter since the mid-1990s, although export levels have been rather volatile, primarily due to fluctuating production and stock levels. Exports are projected to decline about 300,000 tons to 3.3 million as consumption growth outpaces production. Inability to expand area is the main production constraint. India's export volume is surpassed by the United States in 2011 and by Pakistan in 2012.

• The United States is currently the fourth-largest rice-exporting country and is expected to increase exports from 3.4 million tons in 2007 to 4.2 million by 2017. Modest area expansion, continued yield growth, and slow growth in domestic consumption result in larger exportable supplies. By 2011, the United States is expected to become the third-largest exporting country. The Western Hemisphere remains the top market for U.S. rice.

• Pakistan is currently the world's fifth-leading rice exporter and exports are projected to slightly increase over the next decade to 3.5 million tons by 2017. Pakistan has boosted rice area and production in the past few years. However, Pakistan can expand rice area only a little beyond its current record level, and its agricultural sector is confronting a growing water shortage and a decaying infrastructure, limiting production and export gains.

• China, the sixth-largest rice exporting country, is projected to raise exports by 0.8 million tons to more than 2.4 million tons by 2017. The increase in exports is primarily due to a long-term decline in stocks. Little change in production or total disappearance is expected. Higher yields are projected to offset declining area. Reductions in per capita consumption, a result of continued diet diversification resulting from higher incomes, are expected to offset population growth.

Definition of country groups

With global cotton consumption growing dramatically, international trade has become increasingly important in world cotton markets. During the last decade, world consumption climbed at a 4.7-percent growth rate while world trade rose 6.5 percent a year. Not only has textile trade liberalization helped boost world cotton demand through increased efficiency, but geographic shifts in mill use of cotton have increased the role of trade in meeting the global textile industry's need for cotton. Trade's importance has rebounded in recent years as the textile sectors in China and, to a lesser extent, Pakistan have grown substantially faster than domestic cotton production.

• The textile industries in China, India, and Pakistan are the major beneficiaries of textile trade liberalization through the elimination of Multifiber Arrangement (MFA) quotas.

• China has been importing record amounts of cotton as its textile industry's growth rapidly accelerated with a booming economy and WTO accession. Both its textile industry and its cotton imports are expected to grow more slowly than the rapid increases since 2001. However, during the next decade, the increase in cotton imports by China is projected to more than offset the decline in imports by other countries, and China accounts for almost half of world imports by 2017.

• Pakistan has emerged as a major importer in recent years and is projected to be the world's third largest importer during the next 10 years.

• In recent years, Turkey's textile industry has benefited from favorable trade access to the EU, its major market for textile and apparel exports. However, the end of the MFA quotas gives lower cost competitors more favorable access to EU markets. Turkey's cotton imports are projected to rise slowly over the next 10 years, but not enough to keep its share of world trade from falling slightly.

• The EU, Japan, Taiwan, and South Korea all steadily reduce their cotton imports as textile trade reforms and/or higher wages in these countries drive textile production to countries with lower wages and other costs.

Definition of country groups

Globalization is expected to continue to move raw cotton production to countries with favorable resource endowments and technology. Traditional producers with large land bases suitable for cotton production continue to benefit from post-MFA trade patterns. Such producer/exporter regions include the United States, Sub-Saharan Africa, and Brazil. The importance of technology has been highlighted by the impact of India's rapid adoption of genetically modified cotton, nearly all Bacillus thuringiensis (Bt) cotton.

• The United States continues as the world's leading cotton exporter throughout the projections. Exports climb 16 percent to more than 19 million bales by 2017/18.

• The Central Asian countries of the former Soviet Union have been the principal U.S. competitors since the early 1990s. However, government policies in Central Asia promoting investment in textiles have resulted, to some extent, in exports of textile products rather than exports of raw cotton. Furthermore, the region's cotton production is expected to grow only slowly.

• Sub-Saharan Africa's exports rose rapidly during the last decade in large part due to economic reforms. West Africa's 1994 currency devaluation led to nearly a decade of growth within the region's monetary union. As West Africa's production gains began to lag at the end of the 1990s, several southern African countries began increasing their cotton production, aided by reforms such as eliminating marketing board monopolies. Continued increases in output are expected as these economies develop and Bt cotton is adopted by the region's producers. The region's exports are projected to rise more than 50 percent during the next 10 years.

• Improved cotton yields in India, in part due to the adoption of Bt cotton, have raised India's output in recent years. Rapid yield growth is projected to continue as the area planted to Bt cotton expands rapidly. The increase in cotton output is expected to enable India to increase domestic textile production as well as significantly raise cotton exports. By 2009/10, India's cotton exports are projected to surpass those of Central Asia, making India the principal competitor to the United States in world markets.

Growth rates of exports from major exporters of beef, pork, and poultry meat average 1.1, 2.1, and 1.9 percent a year, respectively, between 2008 and 2017. During this period, exports rise 0.8 million tons for beef, 1.0 million for pork, and 1.2 million for poultry. Rising per capita incomes combined with population growth in a number of countries are the driving forces behind the projected growth in global meat demand.

• Bovine spongiform encephalopathy (BSE) in Canada and the United States affected Canada's beef and live cattle exports to the United States in recent years. After falling in 2006 and 2007, Canadian beef exports are expected to recover once again in 2008, rising to a level just below their 2002 record. Additionally, recent changes in U.S. regulations, the projections assume Canadian cattle and beef from cattle over 30 months of age can be exported to the United States under the conditions that they are age-verifiable and born after March 1, 1999.

• EU beef exports remain well below the annual WTO limit on subsidized exports (817,000 tons) as a stronger euro limits their competitiveness in international markets and policy changes lower both beef production and the need to remove beef from the domestic market.

• Argentine beef exports rose sharply in 2004 and 2005. However, export taxes on beef and changes in other policies have made Argentina's exports less competitive. Beef production and exports are projected to decline and remain below their 2004 level.

• The projections assume no changes in the set of countries recognizing Brazil as free of foot-and-mouth disease (FMD), thus limiting Brazilian pork's ability to compete in some markets. However, exports from Brazil's expanding pork sector are expected to be competitive in price-sensitive markets such as Russia and Asian countries other than Japan and South Korea.

• Canada is projected to remain the world's third largest pork exporter.

• During the coming decade, Brazil is expected to continue to be the largest exporter of poultry products, bolstered by low production costs and competitive export prices.

• U.S poultry meat exports are projected to increase, due in part to a weak dollar that increases the competitiveness of U.S. exports.

• Poultry exports from countries affected by avian influenza, such as Thailand and China, are expected to be mostly fully cooked products.

Definition of country groups

Beef imports by major importers expand about 1.3 million tons (23 percent) between 2008 and 2017. Traditionally, developed countries were the primary importers of beef. However, Brazil has become a large exporter of lower quality beef that is imported by lower income countries. The projections assume gradual recovery of U.S. and Canadian exports to Japan and South Korea.

• Higher income countries, such as Japan and South Korea, increase beef imports, reflecting domestic cattle sectors that are constrained by land availability. These imports are primarily of grain-fed beef. U.S. beef exports to these countries are projected to rebuild over the next 10 years. Also, there continues to be a strong presence of Australia and New Zealand in these East Asian markets.

• U.S. beef imports, primarily of grass-fed lean beef from Australia and New Zealand for use in ground beef and processed products, rise slightly through the period. Even with decreases in exports due to weather and land availability in the early part of the projection period, strong Asian imports of beef from Australia and New Zealand enable these countries to maintain significant levels of exports over the projection period.

• Robust import growth of higher quality beef from the United States is projected for Mexico.

• The projections assume that Russia's tariff-rate quota (TRQ) for beef, first imposed in 2003, remains in effect until 2009. In the longer run, the growth in Russia's beef imports resumes as rising consumer demand outpaces gains in domestic production. Russia remains a large market for EU and Brazilian beef exports.

Definition of country groups

The major pork importers are projected to increase trade by nearly 1 million tons (24 percent) between 2008 and 2017.

• Mexican pork imports increase more than 150,000 tons (38 percent) between 2008 and 2017, making Mexico one of the fastest growing pork importers. Increases in income and population are the primary drivers of Mexico's increasing demand for pork.

• Higher income parts of East Asia, such as Japan, Hong Kong, and South Korea, increase pork imports as their domestic hog sectors are constrained by environmental concerns. In South Korea and Japan, BSE-related concerns regarding beef also boost pork demand.

• As with beef, the projections assume the TRQ that Russia imposed for pork in 2003 remains in effect until 2009. Although the TRQ initially lowered pork imports, Russia remains a major destination for competitively priced pork exports from the EU and Brazil as demand growth continues to exceed Russian pork production gains. By 2017, Russia is projected to import over 200,000 tons more pork than in 2008, a larger increase than any other country.

• In China, increasing incomes boost per capita pork consumption and raise imports in the projections. However, China's pork production and exports also continue to rise.

Definition of country groups

Poultry meat imports by major importers are projected to increase by about 1.0 million tons (18 percent) from 2008 to 2017.

• Russia is expected to remain the world's largest poultry importer. Despite slow population growth, rising consumer income increases demand for poultry products. However, increased consumption is expected to be met by rising domestic production, so imports are not expected to change much during the coming decade.

• In Mexico, economic growth raises poultry consumption and imports. Domestic poultry production continues to increase, but lags rising consumer demand.

• China's rising consumption of poultry meat is met by expanding domestic production, while the country's poultry imports and exports each grow by more than 25 percent.

• East Asia, a major importing region, is projected to import 20 percent more poultry meat in 2017 than in 2008. Most of the increase is imported by South Korea.

• Because of avian influenza, some major poultry-exporting countries such as Thailand and China have shifted most of their exports to fully cooked products. Due to their higher costs, these cooked poultry products will be marketed to developed or high-income countries in Asia, Europe, and the Middle East.

• Poultry imports by Saudi Arabia and the Other North Africa and the Middle East region are projected to grow throughout the projection period. Animal disease issues in a number of countries is expected to slow growth in domestic production and increase demand for imports.

• Rising consumer incomes increase poultry demand and imports in a number of Central America and Caribbean countries. Poultry products remain relatively less expensive than beef or pork, further stimulating demand. Together with Mexico, these countries form one of the largest markets for poultry imports.

Long-Term Projection Tables

• 2008-17 Long-Term Projection Tables are available in spreadsheets (wk1 format).

Other Topics in The Online Baseline Presentation

• Briefing Room Front Page
• Summary of Projections
• Macroeconomic Assumptions
• U.S. Crops
• U.S. Livestock
• U.S. Agricultural Sector Measures

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