WASHINGTON, D.C., Feb. 13, 2014 – U.S. net farm income should remain historically high over much of the next decade based on strong overseas demand for agricultural products, the USDA said today in its annual 10-year baseline projection.
While farm commodity prices may fall in the short term as global production responds to recent high prices, “long-run developments for global agricultural products reflect steady world economic growth and continued global demand for biolfuels,” USDA said in the report.
Exports of U.S. corn, for example, are expected to climb to 1.7 billion bushels in the 2014-2015 crop year (which begins Sept. 1) from 1.4 billion bushels in the current year. By 2023, overseas shipments may reach 2.25 billion bushels.
The department projects a record 2014 corn crop of 14.260 billion bushels, up from 13.989 billion in 2013, and a harvest of almost 15 billion bushels in 2023. Yields by then may reach 183.6 bushels per acre, up from 160.4 in last year’s crop and 165.6 bushels per acres for the crop that will be sown this spring. As yields rise, harvested acres are expected to fall, from 97.2 million acres for the 2012 crop, to 81.1 million acres in 2023.
Soybean exports should increase to 1.79 billion bushels during the 2023-2024 crop year, compared to 1.45 billion in the current year and 1.64 billion bushels in the year starting Sept. 1, USDA said. A record crop of 3.48 billion bushels is projected, up from 3.258 billion last year. Production may jump to 3.785 billion bushels in 2023, USDA said.
Wheat exports are expected to climb over the decade, but just barely, from 1.11 billion bushels in the current crop year to 1.115 billion a decade from now. Production should also remain fairly stagnant, with a projected crop of 2.185 billion bushels in the 2023-24 crop year, compared to 2.13 billion in 2013-14 and 2.22 billion in the following year.
Corn, soybeans and wheat are the biggest U.S. crops.
Today’s baseline report assumes there will be no “domestic or external shock” that would affect agricultural markets and that “normal weather” conditions will prevail. It also is based on provisions in the 2008 farm bill. Global economic growth of 3.2 percent a year is assumed, while U.S. growth is expected to be 2.6 percent annually.
The report is not a “forecast,” the USDA cautions. “Instead, it is a description of what would be expected to happen under these very specific circumstances and assumptions.”
The report also projects:
-Acreage enrolled in the Conservation Reserve Program to fall to about 26 million acres in 2014 before rising back to the maximum allowed under the 2008 farm bill of 32 million toward the end of the projection period.
-Prices for hog and broilers for the most part will fall in the first half of the projection period as production levels rise. In contrast, beef cattle prices should rise as beef production continues to decline for several years.
-Farm level milk prices should decline in 2014 then gradually rise over the rest of the projection period, with increases less than the overall rate of inflation largely reflecting efficiency gains in production.
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