USDA Issues Ag Projections Report

A new report, “USDA Agricultural Projections to 2019”, discusses what the country’s agricultural sector can expect by the end of the decade. The study’s projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices, based on specific assumptions about macroeconomic conditions, policy, weather and international developments, with no domestic or external shocks to global agricultural markets.

The report found that prospects for the agricultural sector in the near term reflect continuing U.S. and global adjustments to the recession of 2008-09, and the subsequent economic recovery. A resumption of steady global economic growth will support increases in consumption, trade, and prices in the longer run.

Agricultural trade and cash receipts to farmers are expected to grow through the projection period. Increases in production expenses offset some of the gains in cash receipts, resulting in net farm income in the U.S. rising moderately from 2011 to 2019, USDA said. Retail food prices will continue to increase more than general inflation through 2012, but then return to a longer term relationship of rising less than the general inflation rate over the last-half of the projection period.

According to the report, the growth of imports is projected to increase at a quicker pace than either exports or domestic production, with import values set to grow annually by 3.7% from 2010 to 2019 (export growth is forecast at 2.8% for the same period).

Farm sales of crops are projected to grow by 2.3% annually over the next decade, up to $68.6 billion from $56 billion this year, with vegetables and melons ranking first in farm sales value, accounting for over 38% of the total. USDA added that the U.S. trade deficit in horticultural crops will increase from $13 billion in 2010 to $20 billion in 2019.

To view the full details of the ag projections report go to: ERS.USDA.gov/Publications/OCE101.