USDA today released its USDA Ag Projections to 2022, which provides its farm sector projections over the next 10 years. The projections take a look at ag commodities, trade and aggregate indicators of the farming sector, such as farm income and food prices.
The report makes the following assumptions:
- Global economic growth reflects steady gains.
- Increases in world population continue to slow. Growth in most developing countries remains above that in the rest of the world.
- Population gains in developing countries -- along with higher incomes, increased urbanization, and expansion of the middle class -- are particularly important for growth in global food demand.
- Continued global expansion of biofuels further adds to world demand for agricultural products.
Key Corn Projections
For corn, USDA expects yields in 2013-14 to recover to 163.5 bu. per acre and for plantings to decline slightly from last year to 96 million acres. This is expected to result in a vast improvement in production to 14.435 billion bushels.
Going forward, USDA anticipates yields will rise several bushels each year, topping at 181 bu. per acre in 2022-23, but for planted acres to decline to 90 million or below through 2018-19, after which plantings would gradually decline, to 92 million in 2022-23.
Farm prices for corn are expected to decline to an average of $5.40 per bu. in 2013-14 and then $4.10 in 2014-15. Going forward, USDA projects average corn prices will rise between a nickel and 20 cents each year, eventually reaching $4.85 in 2022-23.
Key Soybean Projections
USDA projects soybean plantings in 2013-14 will decline by 1.2 million acres from the year prior to 76 million and for yields to recover to 44.4 bu. per acre. This is expected to boost production by 364 million bu. from 2012-13 to 3.335 billion bushels.
From 2014-15 to 2022-23, USDA expects plantings to hover between 74 million acres and 76 million acres, while average yields are expected to top 45 bu. per acre in 2015-16 and rise to 48.4 bu. per acre by 2022-23. So after dropping to 3.28 billion bu. in 2014-15, production is expected to rise to 3.36 billion bu. in 2015-16 and continue to steadily increase to 3.635 billion bu. by 2022-23.
USDA projects average farm prices for soybeans will drop to $11.35 per bu. in 2013-14 and then to drop to $10.35 per bu. in 2014-15. Prices are expected to remain below $11.00 until 2020-21.
Key Wheat Projections
USDA expects yields in 2013-14 to decline nearly 1 bu. per acre to 45.2 bu. per acre but for plantings to increase to 57.5 million acres. Thus, USDA expects production to decline slightly in 2013-14 from the year prior to 2.190 billion bushels.
Thereafter, USDA projects planted acres will decline gradually from 54 million acres in 2014-15 to 50.0 million acres in 2022-23, but this will be countered by increases in yields from 45.6 bu. per acre in 2014-15 to 48.6 bu. per acre in 2022-23. This is expected to keep production in a range of 2.105 billion bu. to 2.005 billion bu. through 2023.
Average farm prices for wheat are projected at $7.20 for 2013-14, after which point they are seen declining to $5.40 and remaining under $6.00 until 2020-21.
Some other key projections include the following:
- Prices for major crops decrease in the early years of the projections as global production responds to recent high prices.
- Total U.S. red meat and poultry production is projected to fall in 2013 in response to lower producer returns and drought in the Southern Plains of the United States over the past two years. Meat production then increases in response to improved returns and improved forage supplies.
- World economic growth and demand for biofuels combine to support longer run increases in consumption, trade, and prices for agricultural products.
- Following the near-term declines, prices for corn, wheat, oilseeds, and many other crops remain historically high.
- After declines from record levels projected in 2013, the values of U.S. agricultural exports and farm cash receipts rise through the rest of the decade. Production expenses also rise beyond 2015, but net farm income remains historically high.
- Retail food price increases average less than the overall rate of inflation in 2014-22, largely reflecting production increases in the livestock sector that limit meat price increases.