What is in this article?:
- Weaker dollar will continue to buoy U.S. ag exports
- Wheat prices to decline
• Highlights from USDA's Agricultural Long-Term Projections include higher corn acreage in the near term and lower soybean plantings.
• Cotton acres are expected to rise in the near term after 2012, but fall toward the end of the projection period.
• A weak dollar will continue to bode well for exports.
A weaker dollar and strong global economic growth over the next 10 years bode well for U.S. agriculture, according to USDA’s Agricultural Long-Term Projections, released in February.
The report, from the office of USDA’s chief economist, said economic growth and population gains will boost demand for good and feed. In addition, biofuel demand will remain an important factor shaping the projections for global use, world trade, and agricultural commodity prices.
The depreciated dollar will continue to be supportive of the outlook for U.S. exports, USDA says.
Crop prices are projected to fall from recent record highs but remain above pre-2007 levels for many crops. Following the near-term decline in prices and planted acreage, strong demand and rising prices are expected to provide economic incentives for increases in plantings beyond 2015.
Acreage enrolled in the Conservation Reserve Program is projected to decline below 28 million acres in 2013-14 before rising back to close to 32 million acres by the end of projection period.
Highlights of the report by crop:
Lower supplies and higher prices resulting from the weather-reduced 2012 U.S. corn crop has led to lower domestic use and exports.
Corn acreage is projected to remain high in the near-term, with normal yields leading to an increase in production and a recovery of corn use.
Although corn-based ethanol production is projected to slow significantly, its continued high levels, along with gains in exports and feed use will keep corn use high.
Following several years of adjusting markets, increasing producer returns are projected to lead to gradually rising corn acreage in a range of 88 million to 92 million acres after 2015.
U.S. corn exports are expected to increase sharply from 2012-13 weather-reduced levels and then rise at a slower pace over the next 10 years in response to strong global demand for feed grains to support growth in meat production.
Export gains are projected strong to China, which account for about 40 percent of the projected overall growth in global corn imports.
After declining from their current high levels, corn prices are projected to begin increasing again by 2015-16 due to growth in feed use, exports and demand for corn by ethanol producers.
Strong wheat prices and expected net returns will boost wheat plantings for 2013. However, relatively weak overall demand growth for wheat is projected to lead to a decline in wheat plantings to 50 million acres by 2022.
U.S. wheat exports are expected to fall to under 950 million bushels annually over the next 10 years, with competition from the Black Sea region, where wheat exports are expected to rise from 22 percent to 30 percent of global trade over the next decade. For the same time period, the U.S. market share is expected to decline from 19 percent to16 percent.