Each year, USDA makes 10-year economic projections for
the food and agriculture sector. The projections reflect
a set of assumptions regarding macroeconomic developments
and farm policies, and cover major agricultural commodities,
agricultural trade, and aggregate indicators of the U.S.
farm sector, such as farm income and food prices. One key
use of the projections is as a "starting point" from
which to analyze the impacts of potential policy changes
on U.S. agriculture.
Highlights
Longrun developments for global agriculture reflect continued
high crude oil prices as well as strong demand for biofuels,
particularly in the United States and the European Union
(EU). U.S. agricultural projections reflect large increases
in corn-based ethanol production, which affects production,
use, and prices of farm commodities throughout the sector.
Expansion of biodiesel use in the EU raises demand for
vegetable oils in global markets. Additionally, steady
domestic and international economic growth in the projections
supports gains in consumption, trade, and prices. Although
export competition is projected to continue, global economic
growth, particularly in developing countries, provides
a foundation for gains in world trade and U.S. agricultural
exports. Combined with increases in domestic demand, particularly
related to growth in ethanol production, the results are
generally higher market prices. As a result, overall net
farm income remains strong and reaches record levels in
the latter part of the projections. Higher energy-related
costs and agricultural commodity prices push U.S. retail
food prices up more than general inflation in the near
term, but then food prices increase less than the general
inflation rate over the remainder of the projections period.
Historic Reports
The Economic Research Service has the lead role in preparing
USDA’s Agricultural Projections report. For information
on previous long-term projections, see the Current
and Previous Baseline Projections page in the ERS
baseline briefing room.
