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| ![]       | USDA Agricultural Projections to 2017                    |
| (media/im |                                                          |
| age1.wmf) | **Interagency Agricultural Projections Committee**       |
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| **United  | > World Agricultural Outlook Board, Chair                |
| States    | >                                                        |
| D         | > Economic Research Service                              |
| epartment | >                                                        |
| of        | > Farm Service Agency                                    |
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| culture** | > Foreign Agricultural Service                           |
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| Office of | > Agricultural Marketing Service                         |
| the       | >                                                        |
|           | > Office of the Chief Economist                          |
| Chief     | >                                                        |
| Economist | > Office of Budget and Program Analysis                  |
|           | >                                                        |
| World     | > Risk Management Agency                                 |
| Agr       | >                                                        |
| icultural | > Natural Resources Conservation Service                 |
| Outlook   | >                                                        |
| Board     | > Cooperative State Research, Education, and Extension   |
|           | > Service                                                |
| Long-term |                                                          |
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| ojections |                                                          |
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| CE-2008-1 |                                                          |
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**USDA Agricultural Projections to 2017.** Office of the Chief
Economist, World Agricultural Outlook Board, U.S. Department of
Agriculture. Prepared by the Interagency Agricultural Projections
Committee. Long-term Projections Report OCE-2008-1, 104 pp.

**Abstract**

This report provides projections for the agricultural sector through
2017. Projections cover agricultural commodities, agricultural trade,
and aggregate indicators of the sector, such as farm income and food
prices. The projections are based on specific assumptions regarding
macroeconomic conditions, policy, weather, and international
developments. The report assumes that there are no shocks due to
abnormal weather, further outbreaks of plant or animal diseases, or
other factors affecting global supply and demand. The Farm Security and
Rural Investment Act of 2002, the Energy Policy Act of 2005, and the
Agricultural Reconciliation Act of 2005 are assumed to remain in effect
through the projections period. The projections are one representative
scenario for the agricultural sector for the next decade. As such, the
report provides a point of departure for discussion of alternative farm
sector outcomes that could result under different assumptions. The
projections in this report were prepared in October through December
2007, reflecting a composite of model results and judgment-based
analyses.

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.

Keywords: Projections, crops, livestock, biofuel, ethanol, trade, farm
income, food prices.

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# Contents

Page

A Note to Users of USDA Long-term Projections [3](#Note_to_users)

Long-term Projections on the Internet
[4](#Baseline_projections_on_the_internet)

Contacts for Long-term Projections [4](#Baseline_contacts)

Acknowledgments [4](#Baseline_contacts)

Introduction [1](#Introduction)

Overview of Assumptions and Results
[2](#overview-of-assumptions-and-results)

Macroeconomic Assumptions [9](#macroeconomic-assumptions)

Crops [20](#Crops)

Livestock [47](#Livestock)

U.S. Agricultural Sector Aggregate Indicators:

Farm Income, Food Prices and Expenditures, and U.S. Trade Value
[57](#US_Ag_sector_agg_indicators)

Agricultural Trade [65](#Agricultural_trade)

List of Tables [104](#List_of_tables)

+-----------------------------------------------------------------------+
| []{#Note_to_users .anchor}**A Note to Users of USDA Long-term         |
| Projections**                                                         |
|                                                                       |
| USDA's long-term agricultural projections presented in this report    |
| are a Departmental consensus on a longrun scenario for the            |
| agricultural sector. These projections provide a starting point for   |
| discussion of alternative outcomes for the sector.                    |
|                                                                       |
| The scenario presented in this report is not a USDA forecast about    |
| the future. Instead, it is a conditional, longrun scenario about what |
| would be expected to happen under a continuation of current farm      |
| legislation and specific assumptions about external conditions.       |
|                                                                       |
| The report uses as a starting point the short-term projections from   |
| the November 2007 *World Agricultural Supply and Demand Estimates*    |
| report. Critical long‑term assumptions are made for U.S. and          |
| international macroeconomic conditions, U.S. and foreign agricultural |
| and trade policies, and growth rates of agricultural productivity in  |
| the United States and abroad. Normal weather is assumed. Also, the    |
| report assumes no further outbreaks of animal or plant diseases.      |
| Changes in assumptions for any of these items can significantly       |
| affect the projections, and actual conditions that emerge will alter  |
| the outcomes.                                                         |
|                                                                       |
| The projections in this report assume that biofuel blending tax       |
| credits and the 54-cent-per-gallon tariff on imported ethanol used as |
| fuel are extended beyond their currently legislated expiration dates. |
| This is in contrast to President's Budget baseline that assumes those |
| tax credits and the tariff are not extended.                          |
|                                                                       |
| The projections analysis was conducted by interagency committees in   |
| USDA and reflects a composite of model results and judgment-based     |
| analyses. The Economic Research Service has the lead role in          |
| preparing the Departmental report. The projections and the report     |
| were reviewed and cleared by the Interagency Agricultural Projections |
| Committee, chaired by the World Agricultural Outlook Board. USDA      |
| participants in the projections analysis and review include the World |
| Agricultural Outlook Board; the Economic Research Service; the Farm   |
| Service Agency; the Foreign Agricultural Service; the Agricultural    |
| Marketing Service; the Office of the Chief Economist; the Office of   |
| Budget and Program Analysis; the Risk Management Agency; the Natural  |
| Resources Conservation Service; and the Cooperative State Research,   |
| Education, and Extension Service.                                     |
+-----------------------------------------------------------------------+

[]{#Baseline_projections_on_the_internet .anchor}**Long-term Projections
on the Internet**

The Economic Research Service of USDA has a briefing room for long-term
projections at:

http://www.ers.usda.gov/briefing/projections/

Also, data from the new USDA long-term projections are available
electronically at:

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1192

[]{#Baseline_contacts .anchor}**Contacts for Long-term Projections**

Questions regarding these projections may be directed to:

Paul Westcott, Economic Research Service, Room 5188, 1800 M Street,
N.W., Washington, D.C. 20036-5831, phone: (202) 694-5335, e-mail:
westcott@ers.usda.gov

Ronald Trostle, Economic Research Service, Room 5190, 1800 M Street,
N.W., Washington, D.C. 20036-5831, phone: (202) 694-5280, e-mail:
rtrostle@ers.usda.gov

C. Edwin Young, Economic Research Service, Room 5191, 1800 M Street,
N.W., Washington, D.C. 20036-5831, phone: (202) 694-5336, e-mail:
ceyoung@ers.usda.gov

David Stallings, World Agricultural Outlook Board, MS 3812, 1400
Independence Ave., S.W., Washington, D.C. 20250-3812, phone: (202)
720-5715, e-mail: dstallings@oce.usda.gov

# 

# Acknowledgments

The report coordinators, on behalf of the Interagency Agricultural
Projections Committee, thank the many analysts in different agencies of
USDA for their contributions to the long-term projections analysis and
to the preparation and review of this report.

**USDA Agricultural Projections to 2017**

> Interagency Agricultural Projections Committee

[]{#Introduction .anchor}**Introduction**

This report provides longrun projections for the agricultural sector
through 2017. Major forces and uncertainties affecting future
agricultural markets are discussed, such as prospects for long‑term
global economic growth and population trends. Projections cover
production and consumption for agricultural commodities, global
agricultural trade and U.S. exports, commodity prices, and aggregate
indicators of the sector, such as farm income and food prices.

The projections are a conditional scenario with no shocks and are based
on specific assumptions regarding the macroeconomy, agricultural and
trade policies, the weather, and international developments. The report
assumes that the Farm Security and Rural Investment Act of 2002 (the
2002 Farm Act), the Energy Policy Act of 2005, and the Agricultural
Reconciliation Act of 2005 remain in effect through the projection
period. Projections do not reflect the Energy Independence and Security
Act of 2007. The projections are not intended to be a Departmental
forecast of what the future will be, but instead are a description of
what would be expected to happen under a continuation of current farm
legislation, with very specific external circumstances. Thus, the
projections provide a neutral backdrop, reference scenario that provides
a point of departure for discussion of alternative farm sector outcomes
that could result under different domestic or international assumptions.

The projections in this report were prepared in October through December
2007 and reflect a composite of model results and judgment-based
analyses. Normal weather is assumed. Also, the projections assume no
further outbreaks of plant or animal diseases. Short-term projections
used as a starting point in this report are from the November 2007
*World Agricultural Supply and Demand Estimates* report.

**Long-term Projections and the President's Budget Baseline**

Projections in this report assume that biofuel blending tax credits and
the 54-cent-per-gallon tariff on imported ethanol used as fuel are
extended beyond their currently legislated expiration dates. This is in
contrast to President's Budget baseline that assumes those tax credits
and the tariff are not extended.

# Overview of Assumptions and Results

**Key assumptions underlying the projections include:**

***Economic growth***

-   World economic growth is projected to increase at a 3.5-percent
    average annual rate between 2008 and 2017, after averaging 2.9
    percent annually in 2001-07. U.S. gross domestic product (GDP)
    increases from the 2007 slowdown toward a sustainable rate of about
    3 percent over the longer term. Strong economic growth in developing
    countries, particularly important for growth in global food demand,
    is projected at 5.8 percent annually for 2008‑17.

***Population***

-   Growth in global population is assumed to continue to slow to an
    average of about 1.1 percent per year over the projection period
    compared with an annual rate of 1.7 percent in the 1980s. Although
    slowing, population growth rates in most developing countries remain
    above those in the rest of the world. As a consequence, the share of
    world population accounted for by developing countries increases to
    nearly 84 percent by 2017, up from 79 percent in the 1980s.

***The value of the U.S. dollar***

-   The U.S. dollar continues to depreciate through 2011, with a drop in
    value of about 14 percent from 2002. Over the rest of the projection
    period, the dollar is assumed to show a small appreciation. Strong
    economic growth in the United States relative to the European Union
    (EU) and Japan will mitigate continuing pressure for the euro to
    appreciate relative to the dollar and will offset much of the
    trade-driven appreciation of the yen. In addition, capital continues
    to move into the United States to benefit from well-functioning and
    diverse financial markets.

***Oil prices***

-   Large increases in oil prices over the past several years reflected
    strong demand for crude oil resulting from world economic recovery
    and rapid manufacturing growth in China and India. Following a
    continuation of increases through 2009, crude oil prices are
    expected to drop modestly in 2010 through 2013 as new crude supplies
    help offset the rise in demand from Asia. After 2013, oil prices are
    projected to rise slightly faster than the general inflation rate.

-   Underlying these longer term price increases, world oil demand is
    expected to rise due to strong global economic growth, particularly
    in highly energy-dependent economies in Asia. Factors expected to
    constrain longer run oil price increases include new oil
    discoveries, new technologies for finding and extracting oil, the
    ability to switch to non-oil energy sources, the ability to increase
    energy efficiency by substituting nonenergy inputs for energy, and
    continued expansion and improvement in renewable energy.

***U.S. agricultural policy***

-   The 2002 Farm Act, as amended, and the Agricultural Reconciliation
    Act of 2005 are assumed to continue through the projection period.

-   Area enrolled in the Conservation Reserve Program (CRP) is assumed
    to decline through 2009 as high prices encourage the return of some
    land to production when CRP contracts expire. CRP acreage is then
    assumed to gradually rise toward its legislated maximum of
    39.2 million acres, reaching 37 million acres by the end of the
    projections.

***U.S. biofuels***

-   The projections in this report were completed prior to enactment of
    the Energy Independence and Security Act of 2007. Thus, provisions
    of that legislation are not reflected in these projections, which
    are based on the Energy Policy Act of 2005.

-   The projections also assume that the tax credits available to
    blenders of biofuels (ethanol and biodiesel) and the
    54-cent-per-gallon tariff on imported ethanol used as fuel remain in
    effect. Combined with the Energy Policy Act of 2005, State programs,
    high oil prices, and other factors, returns for ethanol production
    provide economic incentives for a continued expansion in the
    production capacity of the ethanol industry over the next several
    years. As a result, over 12 billion gallons of ethanol are assumed
    to be produced by 2010. Although more moderate growth is projected
    in subsequent years, over 14 billion gallons of ethanol are produced
    annually by the end of the projection period. Corn starch is
    expected to remain the primary feedstock for ethanol projection
    during the projection period. Cellulosic-based production of
    renewable fuels is assumed to meet the minimum specified in the
    Energy Policy Act of 2005 of 250 million gallons in 2013 and
    subsequent years. Biodiesel production is assumed to increase to
    near 600 million gallons by 2013.

***Cattle and beef trade***

-   The projections assume a gradual rebuilding of U.S. beef exports to
    Japan and South Korea. Due to recent changes in U.S. regulations,
    the projections assume Canadian cattle and beef from cattle over 30
    months of age can be exported to the United States under the
    conditions that they are age-verifiable and born after March 1,
    1999.

***International policy***

-   Trade projections assume that countries comply with existing
    bilateral and multilateral agreements affecting agriculture and
    agricultural trade. The report incorporates effects of trade
    agreements and domestic policy reforms in place in November 2007.

-   Domestic agricultural and trade policies in individual foreign
    countries are assumed to continue to evolve along their current
    path, based on the consensus judgment of USDA's regional and
    commodity analysts. In particular, economic and trade reforms
    underway in many developing countries are assumed to continue.  

***International biofuels***

-   The production of biofuels is experiencing rapid growth in a number
    of countries. The projections assume that the most significant
    increases in foreign biofuel production over the next decade will be
    in the EU, Brazil, Argentina, and Canada. In particular, the
    projections assume that the EU biofuel target of 5.75 percent of
    total transportation fuel use by 2010 is only partially met by that
    date, and is still not fully reached by 2017. Nonetheless, growth in
    biodiesel demand in the EU is a key factor underlying gains in
    global vegetable oils and oilseeds demand.

**Key results in the projections include:**

Steady domestic and international economic growth in the projection
period supports gains in consumption, trade, and prices of agricultural
products. Additionally, the projections reflect continued high crude oil
prices and increased demand for biofuels, particularly in the United
States and the EU.

***U.S. aggregate indicators***

-   Although net farm income initially declines from high levels of 2007
    and 2008, it is projected to remain historically strong throughout
    the projection period, and reach record levels beyond 2011. Growth
    in export demand contributes to increases in agricultural commodity
    prices and gains in farm cash receipts. Increases in corn-based
    ethanol production also provide a major impetus for this strong
    income projection. Higher commodity prices lower government payments
    for price-dependent program benefits, although annual CRP payments
    increase. With lower government payments, the agriculture sector
    relies increasingly on the market for its income. Cash receipts
    represent more than 90 percent of gross cash income in the
    projections, up from about 85 percent in 2005.

-   The value of U.S. agricultural exports rises in the projections as
    steady global economic growth and stronger world trade lead to gains
    for U.S. agricultural export volumes and higher commodity prices.
    The lower value U.S. dollar is also an important factor underlying
    recent export gains and the projected growth. Additionally, higher
    commodity prices due to expansion of global biofuel demand
    contribute to the projected gains in export values. Increases in
    U.S. consumer income and demand for a large variety of foods
    underlie continued strong growth in U.S. agricultural imports.

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-   For most of the projections period, consumer food prices increase
    less than the general inflation rate. However, adjustments in retail
    prices due to higher energy and agricultural commodity prices lead
    to food price increases somewhat larger than general inflation in
    2008 and 2009. Relatively large price increases are expected in 2008
    for fats and oils and for cereals and bakery products, reflecting
    higher prices for vegetable oils and wheat. Consumer prices for red
    meats, poultry, and eggs exceed the general inflation rate in 2009
    as the livestock sector adjusts to higher feed costs. Consumer
    expenditures for food away from home continue to grow in importance
    and account for more than half of overall food spending during most
    of the projection period.

***U.S. agricultural commodities***

-   Strong expansion of corn-based ethanol production in the United
    States affects virtually every aspect of the field crops sector,
    ranging from domestic demand and exports to prices and the
    allocation of acreage among crops. A higher portion of overall
    plantings is allocated to corn. Higher feed costs also affect the
    livestock sector, mitigated somewhat by the increased availability
    of distillers grains.

-   Ethanol production in the United States continues its strong
    expansion through 2009/10, with slower growth in subsequent years.
    By the end of the projections, ethanol production exceeds 14 billion
    gallons per year, using almost 5 billion bushels of corn. The
    projected large increase in ethanol production reflects the Energy
    Policy Act of 2005, State programs, ongoing ethanol plant
    construction, and economic incentives provided by continued high oil
    prices. Feed use of corn declines in the initial years of the
    projections and then rises only moderately as increased feeding of
    distillers grains helps meet livestock feed demand, particularly for
    beef cattle.

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-   Growth in the food use of wheat is projected to match the rate of
    population increase. Feed use of wheat rebounds from the low levels
    of 2006/07 and 2007/08 as higher corn prices encourage increases in
    wheat feeding. Wheat feeding then levels off as wheat prices
    relative to corn stabilize.

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-   Soybean acreage falls in the projections after 2008 due to more
    favorable returns to corn production. Longrun growth in domestic
    soybean crush is mostly driven by increasing demand for domestic
    soybean meal for livestock feed. Some gains in crush also reflect
    increasing domestic soybean oil demand for biodiesel production.

-   Moderate expansion of domestic food use of rice is projected.
    Although growth is somewhat faster than population growth, it is
    well below the rates of growth in the 1980s and 1990s when per
    capita use rose rapidly. Imports of rice account for a growing share
    of domestic use in the projections.

-   Mill use of upland cotton in the United States falls in the
    projections as U.S imports of apparel continue to increase, reducing
    domestic apparel production and lowering the apparel industry's
    demand for fabric and yarn produced in the United States.

-   Duties and quantitative restraints on sugar and high fructose corn
    syrup (HFCS) trade between the United States and Mexico ended on
    January 1, 2008. This results in increased use of HFCS by Mexico's
    beverage industry and, consequently, larger sugar exports from
    Mexico to the United States.

[]{.mark}

-   The production value of U.S. horticultural crops is projected to
    grow by more than 3 percent annually over the next decade, with
    consumption of horticultural products continuing to rise. Imports
    play an important role in domestic supply during the winter and,
    increasingly, during other times of the year, providing U.S.
    consumers with a larger variety of horticultural products.

-   Production of all meats slows or declines in the first half of the
    projections, largely reflecting higher feed costs and lower producer
    returns as more corn is used in the production of ethanol. After
    those production adjustments, strong domestic demand and some
    strengthening in meat exports result in higher prices and higher
    returns, providing economic incentives for expansion in the sector.

-   Per capita meat consumption declines through 2012-14 as the
    livestock sector lowers overall production and retail prices rise.
    Meat consumption per person then rises again at the end of the
    projections period. Rising incomes facilitate gains in consumer
    spending on meat. Nonetheless, overall meat expenditures represent a
    declining proportion of disposable income.

-   Strong domestic and international demand for dairy products
    contributed to high U.S dairy prices in 2007. Despite higher feed
    costs, strong farm-level milk prices are projected to encourage
    further increases in milk cow numbers through 2009. Combined with an
    upward trend in output per cow, the results are relatively strong
    gains in milk production in 2008 and 2009 and decreases in milk
    prices. Smaller production gains are projected on average over the
    rest of the projection period because milk cow numbers decline
    after 2009. Milk prices rise after 2009.

***Agricultural trade***

-   World consumption of many grain, oilseed, and meat commodities has
    exceeded world production in the past several years, reducing global
    stocks. As a result, global stocks-to-use ratios have dropped
    sharply and prices have risen. Tight market conditions are projected
    to persist for many commodities over most of the coming decade,
    keeping agricultural commodity prices high.

-   Broad-based global economic growth provides a foundation for robust
    gains in world demand for agricultural products. Economic growth in
    developing countries is especially important because food
    consumption and feed use are particularly responsive to income
    growth in those countries, with movement away from staple foods and
    increased diversification of diets. Rapid expansion of ethanol and
    biodiesel production in some countries also adds to global
    agricultural demand growth.

-   Population growth rates are slowing in most countries but rates in
    developing countries remain nearly double those of developed
    countries. Many developing countries are also projected to achieve
    rapid economic growth rates.

-   The United States will remain competitive in global agricultural
    markets, although trade competition will continue to be strong.
    Expanding production in a number of countries, including Brazil,
    Argentina, Canada, Ukraine, and Russia, provides competition to U.S.
    exports for some agricultural commodities. The lower-valued U.S.
    dollar assumed in the first half of the projection period boosts
    U.S. agricultural competitiveness and export growth. Even as the
    U.S. dollar strengthens later in the projection period, export gains
    continue to contribute to gains in cash receipts for U.S. farmers.

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-   Continuing growth in the livestock sectors of developing countries
    in Asia, Latin America, North Africa, and the Middle East accounts
    for most of the growth in world coarse grain imports projected
    during the next decade. The United States is the major corn exporter
    in the world. However, with increasing use of corn for U.S. ethanol
    production, U.S. corn exports show very little growth through
    2012/13. In response, corn production and exports are assumed to
    increase for Argentina, Ukraine, Republic of South Africa, and
    Brazil. China is also assumed to increase corn production, which
    changes its net corn trade by slowing the decline in its exports and
    the increase in its imports. Nonetheless, China is projected to
    become a net importer of corn in the longer run, reflecting
    declining stocks of grain and increasing demand for feed for its
    growing livestock sector.

-   Vegetable oil prices rise in response to rapidly increasing demand
    for food use in low- and middle-income countries. Vegetable oil
    prices also rise relative to prices for oilseeds and protein meals
    because of expanding biodiesel production in a number of countries.
    Brazil's rapidly increasing soybean area enables it to gain a larger
    share of world soybean and soybean meal exports, despite increasing
    domestic feed use. Argentina is the leading exporter of soybean meal
    and soybean oil, reflecting the country's large and growing crush
    capacity, its small domestic market for soybean products, and an
    export tax structure that favors exports of soybean products and
    biodiesel rather than soybeans. The former Soviet Union, Eastern
    Europe, and Southeast Asia increase rapeseed and palm oil production
    for use as biodiesel feedstocks.

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-   The United States, Australia, the EU, Canada, and Argentina have
    historically been the primary exporters of wheat, although exports
    from the Black Sea region have grown in the past 10 years. Over the
    next decade, Russia and Ukraine are projected to have a growing
    importance in world wheat trade, reflecting low costs of production
    and continued investments in their agricultural sectors. However,
    high year-to-year volatility in these countries' production and
    trade can be expected due to typical weather-related variation in
    yields.

-   Cotton consumption and textile production are projected to increase
    in countries where labor and other costs are low, such as China,
    India, and Pakistan. China is the largest importer of cotton in the
    world. Although China's cotton imports are expected to grow more
    slowly than the rapid gains since 2001, these increases account for
    most of the gains in global cotton trade in the projections. The
    United States continues as the world's leading cotton exporter,
    reflecting its large production capacity and its reduced domestic
    mill use of cotton as apparel imports continue to grow.

-   Long-grain varieties of rice account for around three-fourths of
    global rice trade and are expected to account for the bulk of trade
    growth over the next decade.  Indonesia, the Philippines, and
    Bangladesh become the three largest rice-importing countries and
    account for about 30 percent of the increase in global rice trade
    over the next decade.  Sub-Saharan Africa, a large importing region,
    accounts for more than a fourth of the increase in trade, with the
    Middle East also contributing to rice trade gains. Thailand,
    Vietnam, the United States, India, and Pakistan remain the world's
    largest rice-exporting countries.

-   U.S. meat exports benefit from strong foreign economic growth.
    However, even with U.S. beef exports to Japan and South Korea
    assumed to gradually rebuild, total U.S. beef exports do not return
    to levels of 2000-03 until late in the projection period.

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-   Pacific Rim nations and Mexico are key markets for long-term growth
    of U.S. pork exports. Higher income countries of East Asia increase
    pork imports as their domestic hog sectors are constrained by
    environmental concerns. Mexican pork imports rise rapidly, driven by
    increases in income and population. Brazil is constrained in its
    pork trade by the presence of foot-and-mouth disease, but continues
    to be a major pork exporter to markets such as Russia, Argentina,
    and Asian markets other than Japan and South Korea.

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-   Brazil remains a leading poultry exporter as low production costs
    allow the Brazilian poultry sector to remain competitive in global
    trade. Poultry exports from countries affected by avian influenza,
    such as Thailand and China, are expected to be mostly fully cooked
    products destined for higher income markets.

#  

# Macroeconomic Assumptions

Macroeconomic assumptions underlying USDA's long-term projections
reflect steady growth at near-average historical rates over most of the
projection period. Most of the world will be moving toward longrun
sustainable economic growth, with trend rates in 2009 and beyond.
Overall, world economic growth is projected to increase at a 3.5-percent
average rate between 2008 and 2017, after averaging below 3 percent
annually between 2001 and 2007. The projections have moderating growth
in developed countries and accelerating growth in developing and former
Soviet Union countries.

High crude oil prices and the U.S. subprime mortgage problems are
assumed to have a moderate impact on the U.S. economy into 2008, holding
growth to 2.5 percent (see box, *U.S. Financial Market Effects on the
Macroeconomic Outlook*, page [10](#US_Financial_Market_Effects)). U.S.
gross domestic product (GDP) growth then moves back toward a sustainable
rate of about 3 percent. The U.S. share of global GDP declines to 28
percent from 30 percent in 2005-07. Continued strong growth in China,
India, and the rest of Asia make this region an increasingly important
part of the global economy, with Asia overall rising to more than a
30-percent share by the end of the projection period.

Improved global economic performance and continuing, although slowing,
population growth is expected to boost food demand in the projections.
Increased global purchasing power and population growth, competing
against demand for biofuels and other domestic uses, are important
factors shaping the projections for U.S. agricultural exports and the
strong outlook for commodity prices. Supporting the outlook for U.S.
agricultural exports is also the cumulative effect of a depreciating
U.S. dollar.

Even with the U.S. and world economies projected to
m![](media/image2.wmf){width="4.557638888888889in"
height="3.098611111111111in"}ove toward sustainable longrun growth,
global inflation rates are projected to remain relatively low through
2017, averaging about 3 percent. Some inflationary pressures have
resulted because of energy price increases and the movement towards full
employment and full capacity utilization. In response, the U.S. Federal
Reserve Board and central banks in other countries are assumed to
continue policies to constrain inflation.

[]{#US_Financial_Market_Effects .anchor}**U.S. Financial Market Effects
on the Macroeconomic Outlook**

Problems in the U.S. subprime mortgage market starting in 2007 resulted
in a decline in housing prices and a rise in foreclosure and delinquency
rates, slowing the U.S. housing market. These problems resulted from a
substantial underpricing of risk in home-mortgage lending. Although
effects spilled over into nonhousing related financial markets, as well,
the U.S. subprime mortgage market problems are assumed to have only a
moderate effect on overall U.S. economic growth in 2008. Projected U.S.
GDP growth for 2008 of 2.5 percent is somewhat lower than the longer
term projected level of about 3 percent.

Reasons for an expected containment of the effects of the mortgage
market problems reflect strength of the banking system; aggressive
actions by the Federal Reserve Board, housing market regulators and
financial intermediaries, and the Federal Government (led by the U.S.
Treasury Department); and sound bank and corporate balance sheets.

-   The Federal Reserve Board lowered the federal funds rate and
    discount rate, which reduces the cost of borrowing from other banks
    and from the Federal Reserve. As a consequence, the banking system
    is able to provide liquidity for mortgages and other loans.

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-   Actions of housing market regulators and the U.S. Treasury
    Department are encouraging renegotiation of terms of troubled
    mortgages to make them more favorable to borrowers. This will reduce
    foreclosures and minimize the effect that foreclosures have on real
    estate prices.

-   Financial intermediaries, such as banks, are taking losses on their
    balance sheets in a timely manner. Given the overall strength of the
    capital positions in the banking system, banks are expected to make
    such adjustments without undue loss in the ability to expand loans
    in the future.

-   The corporate sector also has strong balance sheets. This provides
    ample ability to raise capital through the banking system, equity
    markets, or direct issuance of corporate bonds or commercial paper.
    As a result, there is generally plentiful credit.

-   Riskier segments of the credit market are experiencing higher
    interest rates as differences in yields between Baa-rated (medium
    quality) bonds and Aaa-rated (highest quality) bonds better
    represent differences in underlying risk. Prior to the subprime
    mortgage market problems, the differentials were very small by
    historical standards. As the bond markets raise risk premiums,
    corporations are deterred from engaging in excessively risky
    projects. Although this slows investment expansion, it makes
    business expansion more sustainable.

As housing prices fall, downward pressure on consumer spending is offset
by growth in employment and wages, and continued strength in equity
markets. As housing construction has slowed, skilled tradesmen are being
re-employed in home improvement and commercial construction. Realtors,
mortgage brokers, and bank employees have lost jobs, but the strong U.S.
economy is creating enough new jobs to offset those losses, in
aggregate. Additionally, a weak dollar and strong foreign economic
growth support a very strong export sector, also providing new jobs.
Overall, these factors mitigate the net impact of the financial
situation on the U.S. economy.

> ![](media/image3.wmf){width="4.7in" height="2.997916666666667in"}

Developed economies are projected to grow at rates similar to those of
the 1990s, averaging around 2.5 percent in 2008-17. Economic growth
rates for the EU and Japan increase from recent gains, but remain around
2 percent per year in the projection period. As a consequence, both the
EU and Japan account for smaller shares of global GDP.

-   Enlargement of the European Union (EU) to include more countries of
    Central and Eastern Europe creates additional trade and investment
    opportunities within the expanded EU. The EU economy, however, does
    not grow as rapidly as the U.S. economy because of lingering EU
    structural rigidities, particularly rigid labor laws and a very
    expensive social security system. Political difficulties also
    constrain the benefits of economic integration, particularly with
    continued restrictions on labor mobility between EU countries and a
    very cumbersome EU decisionmaking process. Unemployment rates
    decline from double-digit rates, however, indicating some progress
    in increasing employment flexibility.

-   Japan continues to face constraints to economic growth, largely the
    result of long-term structural rigidities, a difficult political
    process of economic reform, and a rapidly aging population. Japan's
    labor market liberalization partly offsets these constraints, aiding
    productivity growth. Japan's increasing integration with the other
    economies of Asia, especially China, further mitigates the growth
    constraints in the Japanese economy. The projections assume
    sustained economic growth in Japan at 2 percent a year, with the
    country's share of world GDP declining to below 12 percent by 2017,
    down from almost 18 percent in 1991. While Japan's projected growth
    remains relatively low compared with most other countries, it
    represents a major improvement from its growth in the 1990s.

> ![](media/image4.wmf){width="4.7in" height="2.997916666666667in"}

Economic growth in developing countries is projected to average 5.8
percent annually during 2008‑17. Developing countries will play an
increasingly important role in global growth in food demand and will
become a more important destination for U.S. farm exports. Relatively
high income growth, along with large responsiveness of consumption and
imports of food and feed to income growth in these countries, underlies
this result. As incomes rise in developing countries, consumers
generally diversify their diets, moving away from staple foods to
include more meat, dairy products, fruits and vegetables, and processed
foods (including vegetable oils). These consumption shifts increase
import demand for feedstuffs and high-value food products.

-   Long-term growth of 4 percent is projected for Latin America. An
    overall improvement in macroeconomic policies should attract foreign
    capital inflows, particularly foreign direct investment, and sustain
    growth.

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-   Projected growth for Southeast Asia exceeds 5.1 percent for the next
    decade while growth in developing countries of East Asia exceeds 7
    percent. Although large, these projected growth rates are below the
    very strong average economic growth in these regions in 1971-2007.

-   China's economic growth has been consistently the strongest in Asia,
    exceeding 10 percent between 2003 and 2006. While some moderation is
    expected, China's growth is expected to average above 8 percent over
    the next decade.

-   India's projected average economic growth of almost 8 percent a year
    puts it in the top tier of high‑growth countries. Nonetheless, India
    is still a low-income country, with real 2000‑based per capita
    income of \$664 in 2007. Continued strong income growth is expected
    to bring India's real per capita income to more than \$1,200 by 2017
    and is expected to move a significant number of people out of
    poverty.

-   High oil prices assumed in the projections modestly constrain Asia
    from even higher economic growth since its manufacturing sector is
    far more dependent on energy for GDP growth than more developed
    economies.

-   Economic growth in the countries of the former Soviet Union (FSU) is
    projected to average 5.5 percent annually for the next decade.
    Russia, Ukraine, and other FSU countries benefit greatly from their
    shift to more market-oriented economies. Russia and other
    energy‑rich FSU countries also benefit from high oil prices.

> ![](media/image5.wmf){width="4.7in" height="3.2006944444444443in"}

A continued slowing of population growth around the world is an
important factor limiting increases in food and agricultural demand over
the next decade. World population growth declines from an annual rate of
1.7 percent in the 1980s to an average of about 1.1 percent per year for
the projection period.

-   Developed and FSU countries have very low projected rates of
    population growth, at 0.4 percent and 0.1 percent, respectively. The
    projected annual average population growth rate for the United
    States is the highest among developed countries, at 0.9 percent, in
    part reflecting large immigration. Population growth rates in
    developing economies decline by more than 40 percent between the
    1980s and the end of the projection period, but remain above those
    in developed countries and the FSU. As a result, the share of world
    population accounted for by developing countries increases to 84
    percent by 2017.

-   China and India together account for more than one-third of the
    world's population. China's population growth rate slows from 1.5
    percent per year in 1981-90 to 0.6 percent in 2008‑17. The
    population growth rate in India, the world's second most populous
    nation, is projected to decline from 2.1 percent to 1.5 percent per
    year between the same periods. The differential in population growth
    narrows the gap between India's and China's populations.

-   Brazil's population growth rate falls from 2.1 percent per year in
    1981-90 to 0.8 percent annually in 2008-17. Sub-Saharan Africa's
    population growth rate declines from 2.9 percent to 2.2 percent per
    year between the same periods, leaving this impoverished region with
    the highest population growth rate in the world.

-   There are a number of countries with declining populations. Most of
    these are mature economies such as Japan and countries in Western
    Europe, Central Europe, and the FSU.  However, several countries in
    Sub‑Saharan Africa have declining populations resulting from the
    AIDS epidemic, including the Republic of South Africa, Botswana,
    Lesotho, and Swaziland.

> ![](media/image6.wmf){width="4.7in" height="3.4027777777777777in"}

The U.S. dollar continues to depreciate through 2011, with moderate
strengthening over the rest of the projection period. The lower-value
dollar is a facilitating factor in the growth in U.S. exports in the
projections. Combined with strong global economic growth, particularly
in developing countries, the result is strong growth in the demand for
U.S. farm exports.

-   Strong GDP growth in the United States relative to the EU and Japan
    will mitigate continuing pressure for the euro to appreciate
    relative to the U.S. dollar and offsets much of the trade-driven
    appreciation of the yen.

-   China initiated a process for appreciating its currency in 2005
    after a long period of maintaining a fixed nominal exchange rate and
    an undervalued currency. The projections assume that China allows
    its real exchange rate to continue to appreciate at modest rates.
    The appreciation of China's currency also leads to appreciation of
    other Asian currencies.

-   Capital continues to move into the United States to benefit from
    well-functioning and diverse financial markets, although these
    inflows are projected to continue to decline. The overall U.S. trade
    deficit and the capital account surplus fall over the projections
    period.

-   Among agricultural products, U.S. exports of bulk commodities and
    horticultural products tend to be the most sensitive to swings in
    the U.S. dollar's value, because they face more global trade
    competition.

![](media/image7.wmf){width="4.7in" height="2.997916666666667in"}

Crude oil prices rose sharply from late 2002 through 2007, largely
reflecting increased crude oil demand due to a robust world economic
recovery and rapid manufacturing growth in China and India. In 2008
through 2009, crude oil prices are expected to continue to rise
modestly. Between 2010 and 2013, oil prices are expected to decline
slightly. This is followed by a period when they rise slightly faster
than inflation, reflecting rising world oil demand, due to strong global
economic growth, particularly in highly energy‑dependent economies in
Asia. By the end of the projection period, the refiner acquisition cost
for crude oil imports is projected at over \$85 per barrel.

Partly offsetting those effects, factors expected to constrain longrun
increases in oil prices include:

-   The ability to switch to non-oil energy sources, such as coal and
    natural gas, especially in industrial uses and electric power
    generation;

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-   Increasing energy efficiency due to the substitution of nonenergy
    inputs (such as microchip-driven equipment) for energy as well as
    improved energy-use technology;

-   Continued expansion and improvement in renewable energy, such as
    wind and water power, thermal energy, solar power, and biofuels;

-   Continued extraction of fossil fuels from unconventional sources
    such as oil shale and tar sands; and

-   New oil discoveries, along with new technologies for finding and
    extracting oil.

![](media/image8.wmf){width="4.7in" height="3.0972222222222223in"}

Oil prices have historically affected prices of natural gas and
nitrogen-based fertilizer. However, the links between the oil and
natural gas markets have weakened significantly due to dramatic growth
in the demand for natural gas and deregulation throughout the natural
gas supply and demand system. At the same time, fertilizer imports have
become more important in domestic supply. Prices for natural gas and
nitrogen-based fertilizer have become somewhat more volatile than prices
for oil, largely because natural gas is less transportable and, as a
result, its supply is more inelastic. Nevertheless, over a longer period
of time, oil and natural gas prices are expected to move more closely
together as the United States and other natural gas importers develop
the capacity to import more liquefied natural gas.

![](media/image9.wmf){width="6.5569444444444445in"
height="7.061111111111111in"}[]{#t1 .anchor}

[]{#t2 .anchor}

![](media/image10.wmf){width="6.5in" height="9.190972222222221in"}

[]{#t3 .anchor}

![](media/image11.wmf){width="5.997916666666667in"
height="8.660416666666666in"}

[]{#Crops .anchor}**Crops**

Strong expansion of corn-based ethanol production in the projections
affects virtually every aspect of the field crops sector, ranging from
domestic demand and exports to prices and the allocation of acreage
among crops. Additionally, steady U.S. and global economic growth
assumed in the projections provides a favorable setting for other uses
of field crops, which, following the initially large ethanol expansion,
supports longer run increases in consumption and trade and keeps prices
at historically high levels.

Although tempered somewhat by higher feed prices, global livestock
production rises in the projections in response to growing incomes and
demand for meats, which supports gains in world consumption and trade
for feed grains. Following a moderate depreciation of the U.S. dollar in
the first several years of the projections, the dollar (U.S.
agricultural export-weighted basis) is then projected to appreciate. The
strengthening U.S. dollar, combined with trade competition from Brazil,
Argentina, and the Black Sea region, constrains U.S. exports for some
crops. Additionally, strong domestic use of corn due to increased
ethanol production and the shift of land to corn from soybeans limit
U.S. exports in the early years of the projections, particularly for
corn and soybeans.

Assumptions for field crops reflect provisions of the Farm Security and
Rural Investment Act of 2002 (2002 Farm Act), which is assumed to
continue through the projection period. However, with high prices
projected, benefits from price-sensitive programs are reduced. For
example, marketing loan benefits and counter‑cyclical payments for feed
grains are minimal, even accounting for stochastic factors. High prices
also lead to a reduction in area enrolled in the Conservation Reserve
Program (CRP) through 2011. The CRP is then assumed to expand toward its
39.2 million acre maximum, reaching 37 million acres in 2017. CRP rental
rates will increase as farmers' bids for participation in the program
rise to reflect higher crop prices.

Projected plantings for the eight major field crops in the United States
increase from about 246.5 million acres in 2007 to over 252 million in
2008 as the market responds to current high prices prompted by strong
demand and lower global supplies of oilseeds and wheat. Although
plantings for these eight crops then fall, they level off near 244
million acres during most of the projection period, as continued high
prices and producer net returns hold land in production.

![](media/image12.wmf){width="4.459722222222222in"
height="3.1770833333333335in"}

![](media/image13.wmf){width="4.7in" height="2.997916666666667in"}

Plantings of different crops are influenced by expected net returns. Net
returns are determined by market prices, yields, and production costs,
with returns augmented by marketing loan benefits when prices are low.

-   Corn, wheat, and soybeans account for about 88 percent of acreage
    for the eight major field crops over the projection period. In 2008,
    there is some shift in the cropping mix toward wheat and soybeans
    and away from corn due to short-term global supply reductions for
    those crops. However, longer term shifts move acreage back to corn,
    reflecting the growth in domestic corn-based ethanol production that
    raises corn prices and producer returns.

-   Following a decline in 2008, corn acreage increases and remains
    above 90 million acres over the remainder of the projections as the
    expansion in ethanol production increases corn demand, prices, and
    net returns.

-   Soybean plantings decline to less than 70 million acres after 2008
    reflecting more favorable returns to corn production.

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-   Wheat plantings rise sharply in 2008 in response to high prices
    resulting from tight global supplies. Wheat acreage falls back to
    about 56 million acres in the longer run due to competition from
    other crops.

**Strong Ethanol Expansion Projected**

Ethanol production in the United States has increased rapidly over the
past several years, from less than 3 billion gallons in 2003 to over 6
billion gallons in 2007. Expansion in the industry is projected to
continue, particularly over the next few years, exceeding 12 billion
gallons by 2010. Although more moderate growth is projected in
subsequent years, over 14 billion gallons of ethanol are produced
annually by the end of the projection period. These projections assume
the tax credit available to blenders of ethanol and the
54-cent-per-gallon tariff on imported ethanol used as fuel remain in
effect. Provisions of the Energy Independence and Security Act of 2007
are not reflected in this report since the projections were completed
prior to enactment of that legislation (see box, Energy Independence and
Security Act of 2007, pages
[23](#Energy_Independence_and_Security_1)-24).

Most ethanol production in the United States uses corn as the feedstock.
The large ongoing expansion results in almost a third of the corn crop
used to produce ethanol by 2009/10, remaining near that share in
subsequent years. Nonetheless, even by 2017, ethanol production (by
volume) represents only about 8.5 percent of annual gasoline use in the
United States.

![](media/image14.wmf){width="3.692361111111111in"
height="2.359722222222222in"}Market adjustments to the increased demand
for corn to produce ethanol extend well beyond the corn sector.
Movements in relative prices trigger supply and demand adjustments for
other crops. Higher feed costs affect the livestock sector, slowing
increases in or reducing production of all meats over the next several
years.

![](media/image15.wmf){width="3.95in" height="2.7569444444444446in"}

[]{#Energy_Independence_and_Security_1 .anchor}**Energy Independence and
Security Act of 2007**

The Energy Independence and Security Act of 2007 was enacted on December
19, 2007, after projections in this report were completed. Although the
projections do not reflect the new energy act, major features of the
legislation that relate to the Renewable Fuel Standard are illustrated
in the following charts. Also, general qualitative effects are
highlighted below.

The first chart shows the new Renewable Fuel Standard (RFS) from the
2007 Energy Act. The overall standard calls for total renewable fuel
"sold or introduced into commerce in the United States" to reach 36
billion gallons by 2022. Within this standard, ethanol derived from corn
starch is to reach 15 billion gallons. The remainder is to consist of
"advanced biofuel" with specific volumes designated for cellulosic
biofuel and biomass-based diesel.

The second and third charts compare the corn-based ethanol and biodiesel
projections in this report with those designated in the RFS of the 2007
Energy Act. Ethanol derived from corn starch in the RFS reaches 15
billion gallons in 2015, about 2 billion gallons higher than projected
for 2015 in this report. With the RFS for ethanol derived from corn
starch holding at that level beyond 2015, the gap between it and the
2008 long-term projections narrows to about 1.5 billion gallons by 2018.
The RFS for biomass-based diesel reaches 1 billion gallons in 2012 and
"shall not be less than" that amount in later years. This compares with
soybean-oil based biodiesel production of about 600 million gallons in
the 2008 long-term projections.

Although a complete quantitative analysis of the effects of the 2007
Energy Act's RFS for ethanol derived from corn starch and biomass-based
diesel is not presented here, general qualitative effects would include:

-   Increased demand for corn and soybean oil raises prices for those
    commodities. Soybean prices would be higher as well.

-   Higher commodity prices raise overall acreage planted to crops, with
    a greater combined share of the total going to corn and soybeans.
    Acreage planted to competing crops, such as cotton and wheat, would
    be expected to be lower, raising their prices.

-   With a greater share of output going to biofuels, higher crop prices
    would lower other uses of crops, including exports and domestic feed
    use of feed grains. In contrast, soybean meal would be more
    plentiful as increased soybean crush for biodiesel production would
    raise soybean meal production as well.

-   Higher feed prices would lead to further adjustments in the
    livestock sector than those presented and discussed in the Livestock
    chapter of this report.

\--*Continued*

**Energy Independence and Security Act of 2007** *(Continued)*

![](media/image16.wmf){width="3.9902777777777776in"
height="2.636111111111111in"}
![](media/image17.wmf){width="3.9902777777777776in"
height="2.6319444444444446in"}

![](media/image18.wmf){width="3.9902777777777776in"
height="2.627083333333333in"}

![](media/image19.wmf){width="4.7in" height="2.997916666666667in"}

Domestic corn use grows throughout the projection period, primarily
reflecting increases in corn used in the production of ethanol. Global
economic growth underlies increases in U.S. corn exports after 2011/12.

-   Large increases are projected in corn used for ethanol production
    over the next several years. Relatively high prices for crude oil
    contribute to favorable returns for ethanol production, which
    combine with government programs to provide economic incentives for
    a continuation of the ongoing expansion in ethanol production
    capacity.

-   Feed and residual use of corn declines in the initial years and then
    rises only moderately as increased feeding of distillers grains, a
    coproduct of dry mill ethanol production, helps meet livestock feed
    demand.

-   Gains in food and industrial uses of corn (other than for ethanol
    production) are projected to be smaller than increases in
    population. Consumer dietary concerns and other changes in tastes
    and preferences limit increases in the combined use of corn for high
    fructose corn syrup, glucose, and dextrose to about half the rate of
    population gain.

-   U.S. corn exports fall over the next several years as global corn
    trade declines from the record 2007/08 level and as more corn is
    used domestically in the production of ethanol. After growth in
    ethanol production in the United States slows, U.S. corn exports
    rise in response to stronger global demand for feed grains to
    support growth in meat production.

-   Additionally, U.S. corn exports to Mexico are boosted because of the
    elimination of tariffs on corn imports from the United States. This
    shifts some U.S. exports to corn from sorghum and corn products,
    which already had tariff-free status.

-   Strong ethanol demand in the projections pushes U.S. corn stocks
    lower than current levels.

> ![](media/image20.wmf){width="4.7in" height="2.997916666666667in"}

Overall demand in the U.S. wheat sector grows very slowly through the
projection period.

-   Domestic demand for wheat reflects a relatively mature market. Food
    use of wheat is projected to show moderate gains, generally in line
    with population increases.

-   Feed use of wheat, a lower-value use of the crop, rises in the
    initial years of the projections from the levels of recent years as
    higher corn prices encourage increases in wheat feeding. As price
    relationships between wheat and corn stabilize, wheat feeding levels
    off after 2010/11.

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-   U.S. wheat exports are steady over the projections period as
    competition continues from the European Union (EU), Canada,
    Argentina, Australia, and the Black Sea region. In particular, wheat
    prices are projected at levels high enough that the EU can export
    wheat without subsidies, thus permitting higher EU exports.
    Consequently, the U.S. market share declines through the projections
    to under 20 percent by 2017/18. Market shares for Australia,
    Argentina, the EU, and the Black Sea region increase, while the
    market share for Canada continues to decline.

-   Wheat stocks rebound from low 2007/08 levels as higher prices
    encourage additional acreage and production. Then in the later years
    of the projections, stocks decline as wheat acreage falls.

![](media/image21.wmf){width="4.7in" height="2.997916666666667in"}

Domestic use of soybeans continues to rise slowly. U.S. soybean exports
fall, however, as acreage declines and as more soybeans are processed
domestically.

-   Longrun growth in domestic soybean crush is mostly driven by
    increasing demand for domestic soybean meal for livestock feed. Some
    gains in crush also reflect increases in domestic soybean oil demand
    for biodiesel production through 2013/14. Increases in export demand
    for soybean oil and soybean meal also add to crush demand.

-   U.S. soybean exports fall below 900 million bushels as competition
    from Brazil strengthens and U.S. acreage shifts to corn to support
    ethanol production. Consequently, the U.S. market share of global
    soybean trade declines from 35 percent in 2007/08 to about
    21 percent at the end of the projections.

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-   Although U.S. exports of soybean oil and soybean meal increase
    modestly, the United States loses market share in global trade of
    these products against the strengthening competition from South
    American producers.

-   Following a decline in 2007/08 from historically high stocks, a
    rebound in soybean acreage in 2008 keeps stocks from falling
    further. After 2008, shifts in acreage to corn from soybeans keep
    soybean stocks from rebuilding and the stocks-to-use ratio declines.

![](media/image22.wmf){width="4.7in" height="2.997916666666667in"}

Projected farm-level prices for corn, wheat, and soybeans reflect, in
part, movements in U.S. stocks‑to‑use ratios.

-   Corn prices continue to rise through 2009/10 as increases in ethanol
    production strengthen corn demand. As ethanol expansion slows,
    stocks rebuild somewhat and corn prices decline. Then in the longer
    run, corn stocks-to-use ratios fall slowly as gains in corn used for
    ethanol production and moderate export growth outpace increases in
    production (resulting from generally higher acreage and gains in
    yields). Consequently, corn prices resume moderate growth and remain
    historically high.

-   With competition from corn keeping soybean acreage lower, stocks are
    held relatively constant, the stocks-to-use ratio falls, and soybean
    prices remain high throughout the projections.

[]{.mark}

-   Wheat prices decline from current levels in the early years of the
    projections as higher production facilitates the rebuilding of
    stocks. As wheat acreage declines in the latter years of the
    projections, stocks decline and push wheat prices up.

![](media/image23.wmf){width="4.7in" height="2.997916666666667in"}

Continued expansion in domestic food use of rice is projected over the
next decade. U.S. rice exports show moderate increases.

-   Domestic use of rice is projected to grow somewhat faster than
    population growth, although well below the rates in the 1980s and
    1990s when per capita use rose rapidly. Imports of aromatic
    varieties of rice from Asia account for a growing share of domestic
    use in the projections.

-   U.S. rice exports are projected to increase at a moderate pace after
    2008/09, as the U.S. price difference over Asian competitors falls,
    increasing U.S. competitiveness in global rice markets. Exports of
    rough rice to Latin America are expected to continue increasing, and
    account for most of the U.S. export expansion.

-   Stocks of rice initially fall, but then gradually increase after
    2008/09 as rice acreage rises.

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-   Global rice prices are projected to increase 2.5 to 3 percent per
    year, exceeding \$10.50 per hundredweight (rough basis) at the end
    of the projection period. These price increases largely reflect a
    tightening global stocks situation due to slow yield growth and
    little ability to expand area in most producing countries. This
    effect is partially offset by declining global per capita
    disappearance, largely due to dietary shifts away from staple foods
    in Asia as incomes rise.

-   U.S. rice prices rise through the projection period, reaching about
    \$12.50 per hundredweight by 2017. The U.S. price difference over
    Asian competitors declines, but still remains relatively high at
    \$2.00 at the end of the projection period.

![](media/image24.wmf){width="4.7in" height="2.997916666666667in"}

U.S. mill use of upland cotton declines in the projections while upland
cotton exports rise after 2009/10.

-   At the end of the projection period, domestic mill use is projected
    at less than 40 percent of its 1997/98 level. Textile and apparel
    import quotas that had been established under the Multifiber
    Arrangement (MFA) were eliminated at the start of calendar
    year 2005. As a result of this and other factors, apparel imports by
    the United States increase through the projections, reducing
    domestic apparel production and lowering the apparel industry's
    demand for fabric and yarn produced in the United States. Some
    increase in U.S. yarn and fabric exports is projected due to trade
    liberalization, but the net effect is for declining domestic mill
    use.

-   U.S. upland cotton exports decline in 2009/10 from levels in the
    previous 2 years that were facilitated by high stock levels. Exports
    then grow moderately, accounting for about 80 percent of U.S. cotton
    production throughout much of the projection period.

-   Growth in the textile industry in China slows from the rapid
    expansion of recent years, reducing growth in China's cotton
    imports. As a result, world cotton consumption and trade slow as
    well. With global trade growth slowing, gains in U.S. cotton exports
    after 2009/10 keep the U.S. cotton trade share at about one-third,
    down from 41 percent in 2003/04 and 2004/05.

-   Cotton stocks decline in the first several years of the projections
    as some acreage shifts to corn. Beyond 2009/10, cotton acreage
    increases and stocks rebuild through the end of the projections.

> ![](media/image25.wmf){width="4.7in" height="2.997916666666667in"}

The U.S. sugar price support program includes the loan rate program and
marketing allotments as set out in the 2002 Farm Act. Sugar projections
for the United States also are strongly interrelated with projections
for Mexico. Starting January 1, 2008, there are no duties or
quantitative restraints on sugar or high fructose corn syrup (HFCS)
trade between the United States and Mexico, in compliance with the North
American Free Trade Agreement (NAFTA).

-   Use of HFCS by Mexico's beverage industry is projected to increase
    beyond current levels, implying a higher exportable surplus of sugar
    in Mexico. Returns in Mexico from exporting sugar to the United
    States are projected to be higher than either delivering sugar to
    domestic food manufacturers for use in sugar-containing-product
    exports or exporting sugar to other countries at world prices. Over
    the period from fiscal year (FY) 2009 through 2018, annual U.S.
    sugar imports from Mexico are projected to average 1.568 million
    short tons, raw value (STRV), about 15 percent of human consumption
    of sugar in the United States.

-   U.S. sugar imports are projected to exceed the trigger (1.532
    million STRV) for suspension of marketing allotments in all years of
    the projections. U.S. sugar prices are driven down to the minimum
    level to avoid forfeiture to the Commodity Credit Corporation (CCC).
    It is assumed that the USDA uses all available measures to reduce
    CCC program costs. In spite of flat sugar prices, historical growth
    trends in productivity measures underlying domestic U.S. sugar
    production projections (sugar per acre, and beet and cane yields)
    are assumed to continue.

-   Long term sugar projections assume that the raw sugar tariff-rate
    quota (TRQ) is established each year at 1.231 million STRV, the
    World Trade Organization (WTO) minimum access level. The refined
    sugar TRQ is established each year at 94,251 STRV. The refined TRQ
    includes 71,826 STRV of specialty (mostly organic) sugar. Sugar
    imported under the Dominican and Central American Free Trade
    Agreement is projected at 121,761 STRV in FY 2009 and increases by
    2,237 STRV each year. The yearly raw sugar TRQ shortfall is assumed
    to equal 70,000 STRV.

-   Overall sweetener consumption in the United States is assumed to
    grow at about the same rate as population. Imports of
    sugar-containing product are expected to grow faster than
    population, so per capita consumption of domestically delivered
    sugar decreases slightly during the projections period.

> ![](media/image26.wmf){width="4.7in" height="2.997916666666667in"}

The total farmgate production value of U.S. horticultural crops for 2007
was \$55 billion, with about a third contributed by each of vegetables,
fruits and nuts, and nursery and greenhouse crops. The total production
value grows by 3.2 percent annually over the next decade, reaching
\$73.7 billion in 2017.

-   U.S. imports of horticultural products (fruit and nuts, vegetables,
    greenhouse and nursery products, essential oils, beer, and wine) are
    projected to continue outpacing exports, with net imports expected
    to increase about \$12 billion from 2007 to 2017. The appreciation
    of the U.S. dollar after 2011 is an important factor affecting
    trade, slowing export demand for U.S. horticultural products and
    raising U.S. import demand.

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-   U.S. horticultural imports are expected to grow by about 4 percent
    annually through 2017. Imports play an important role in domestic
    supply during the winter and, increasingly, during other times of
    the year. Reduced trade barriers offer U.S. consumers increased
    variety, with freer trade also enhancing global competition.

-   The EU is the top source of U.S. horticultural imports, accounting
    for \$9 billion out of a total \$32.4 billion in 2007. Mexico is the
    second biggest source of U.S. horticultural imports (\$7.4 billion
    in 2007) followed by Canada (\$3.5 billion). Chile and Brazil are
    also large sources of horticultural product imports by the United
    States. Key import commodities include potatoes, tomatoes, bananas,
    grapes, frozen concentrated orange juice, apple juice, melons, tree
    nuts (especially cashews), wine, beer, and essential oils.

-   U.S. horticultural exports are expected to grow by 3 percent a year
    through 2017, with the major export markets including Canada, the
    EU, Mexico, Japan, and Southeast Asia. Exports of almonds, other
    tree nuts, and noncitrus fruits will lead export growth of fruit and
    nuts. Exports of fresh vegetables will be stronger than processed
    vegetables. Exports of wine and essential oils are also expected to
    increase.

> ![](media/image27.wmf){width="4.239583333333333in"
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[]{#Livestock .anchor}**Livestock**

Projections for the livestock sector include production adjustments in
response to high grain and soybean meal prices resulting from the
expansion of corn-based ethanol production. Returns to U.S. meat and
poultry production fall below levels in recent years, slowing increases
in or reducing production of all meats over the next several years. Once
the sector adjusts, lower overall production combined with strong
domestic demand and some strengthening in meat exports result in higher
prices and higher returns, providing economic incentives for expansion
in the sector and a resumption in meat production gains.

![](media/image42.wmf){width="3.9854166666666666in"
height="2.547222222222222in"}

Production of all meats slows or declines in the first half of the
projection period, reflecting higher feed costs as more corn is used in
ethanol production. Distillers grains, a coproduct of ethanol
production, can be used in livestock rations, partially substituting for
corn and sometimes for soybean meal. However, distillers grains can more
easily be used by ruminants (such as cattle) compared to monogastric
animals (such as hogs and chickens). Beef cattle feedlots located close
to ethanol plants are best situated to benefit from a steady supply of
distillers grains, also reflecting the ability of those animals to use
the wet form of distillers grains. Meanwhile, distillers grains are less
suitable in poultry and hog rations.

-   Higher grain prices as well as effects of drought in recent years
    hold down cattle inventories, pushing U.S. beef production down in
    2008‑10. Production then rises in the remainder of the projection
    period as returns improve and herds are rebuilt. The cattle
    inventory remains in a range of 96‑99 million head throughout the
    projections. Rising slaughter weights contribute to the moderate
    expansion of beef production beyond 2010. Higher costs of feedlot
    gain will result in stocker cattle remaining on pasture to heavier
    weights before entering feedlots.

-   Pork production declines in 2009-11 in response to higher feed
    prices and then grows for the remainder of the projections as higher
    hog prices improve returns. Production coordination and market
    integration between the United States and Canada continue in the hog
    sector. Canada is the major supplier of live swine imported by the
    United States. Imported feeder pigs from Canada are finished and
    processed in the United States, where both finishing and processing
    costs are lower.

-   Poultry production slows in 2009-13 while adjusting to higher feed
    costs, but begins to rise towards the end of the projections period.
    During the period, rising exports account for a larger share of
    total production.

> ![](media/image43.wmf){width="4.7in" height="2.997916666666667in"}

Livestock sector production adjustments to higher feed costs as well as
gains in meat and poultry exports result in higher consumer prices and
lower per capita consumption. Annual per capita consumption of red meats
and poultry falls from 222 pounds in 2006 to a low of 214 pounds in
2012-14. Per capita consumption of red meats and poultry then resumes
growth to almost 217 pounds in 2017.

-   Per capita beef consumption declines through the projection period,
    reflecting production adjustments in the industry to higher feed
    costs. U.S. beef exports rise through the projection period, further
    limiting domestic per capita beef consumption. A gradual rebuilding
    of U.S. beef exports to Japan and South Korea is assumed.

-   Strong demand for consistent, high-quality beef continues in the
    domestic hotel and restaurant market, and increasingly in the retail
    market. Demand for U.S. beef in export markets is also primarily for
    high-quality beef.

-   Higher feed costs lead to reductions in pork production, which
    combine with rising pork exports to push per capita pork consumption
    down through 2012. A gradual rebound in per capita pork consumption
    occurs over the remainder of the projection period as production
    gains strengthen.

-   Due partly to higher feed conversion rates, poultry prices remain
    lower than red meat prices. However, as returns are squeezed, slower
    production growth and higher exports result in per capita
    consumption declines in 2010-12. Following these adjustments,
    production strengthens and per capita consumption slowly grows
    toward the end of the projection period.

> ![](media/image44.wmf){width="4.7in" height="2.997916666666667in"}

Livestock prices rise through most of the projection period reflecting
production adjustments in response to higher feed costs.

![](media/image45.wmf){width="4.7in" height="2.997916666666667in"}

Rising incomes facilitate gains in consumer spending on meat.
Nonetheless, overall meat expenditures represent a declining proportion
of disposable income, continuing a long-term trend.

![](media/image46.wmf){width="4.352083333333334in"
height="2.683333333333333in"}

The domestic market remains the dominant source of overall meat demand,
but exports account for a growing share of U.S. meat use. Despite higher
prices, U.S. meat exports rise throughout the projection period,
supported by global economic growth and a continued weak U.S. dollar.

**Beef**

-   U.S. beef exports primarily reflect demand for high-quality fed
    beef, with most U.S. beef exports typically going to Mexico, Canada,
    and markets in Pacific Rim nations. A gradual recovery of U.S. beef
    exports is assumed in the Japanese and South Korean export markets
    lost following the first U.S. case of bovine spongiform
    encephalopathy (BSE) in December 2003.

-   U.S. imports of processing beef from Australia and New Zealand
    increase in the projections. With more demand in East Asian markets
    being met by the United States, exports from Australia and New
    Zealand are reduced, resulting in more of their product being
    shipped to the United States. The United States is a net beef
    importer by volume throughout the projection period as the recovery
    of high‑quality fed beef exports does not reach levels of 2000-03
    until the last several years of the projections.

**Pork**

-   Pacific Rim nations and Mexico remain key markets for long-term
    growth of U.S. pork exports. Brazil is also a major pork exporter.
    However, no changes in the set of countries recognizing Brazil as
    free of foot‑and-mouth disease (FMD) are assumed, thus limiting
    Brazilian pork producers' ability to compete in some markets.
    Consequently, Brazil's pork exports expand to markets such as
    Russia, Argentina, and Asian markets other than Japan and South
    Korea.

-   Despite higher feed costs, increased efficiency in U.S. pork
    production enhances the competitiveness of U.S. pork products.
    Nonetheless, longer term gains in U.S. pork exports will be
    determined by costs of production and environmental regulations
    relative to competitors. Such costs tend to be lower in countries
    which are developing integrated pork industries, such as Brazil.

-   The value of the U.S. dollar relative to currencies of other pork
    exporting countries is expected to enhance U.S. pork export volumes,
    particularly in the early years of the projection period.

**Poultry**

-   U.S. broiler exports rise through the projection period, although at
    a slower pace than in earlier years. Major U.S. export markets
    include China, Russia, and Mexico. Gains in these markets reflect
    economic growth and increasing consumer demand. Demand for poultry
    also remains strong due to its lower cost relative to beef and pork.
    U.S. producers will continue to face strong competition from other
    major exporters, particularly Brazil. For most of the projection
    period, exports from avian influenza-affected countries are expected
    to be limited to fully cooked products.

![](media/image47.wmf){width="4.7in" height="2.997916666666667in"}

In 2007, U.S. prices for farm-level milk and for dairy products, such as
cheese, nonfat dry milk, and dry whey, were high relative to historic
levels due in part to the international dairy situation. Relatively high
prices are expected to extend into 2008. As incomes in developing
countries have grown, so has the global demand for dairy products. World
milk supplies have been tight, however, due in part to reform of the
Common Agricultural Policy (CAP) in the European Union and drought
conditions in Australia. The U.S. dairy industry has become a major
commercial exporter of nonfat dry milk, dry whey products, and cheese.
Although U.S. milk production grew significantly in 2007, the growth was
limited by high feed costs relative to historic levels and tight
supplies of dairy heifers.

-   Despite higher feed costs, strong farm-level milk prices are
    projected to encourage further increases in milk cow numbers
    through 2009. Combined with an upward trend in output per cow, the
    results are relatively strong gains in milk production in 2008 and
    2009 and decreases in milk prices. Smaller production gains are
    projected on average over the rest of the projection period because
    milk cow numbers decline after 2009.

-   Milk output per cow is projected to increase, although some slowing
    in these gains occurs in 2009 and 2010 in response to higher feed
    costs. Nonetheless, further development of large, specialized
    operations in most regions will contribute to a continuation of
    gains in output per cow.

-   Milk cow numbers are expected to decline after 2009, although
    reductions are moderate as increasing specialization of dairy farms
    over time slows exit rates from milk production compared with past
    decades.

-   Commercial use of dairy products increases slightly faster than the
    growth in population. Cheese demand benefits from greater
    consumption of prepared foods and increased away‑from-home eating.
    However, per capita consumption of fluid milk is expected to
    continue to decline slowly.

-   Farm-level milk prices decrease in 2009 from recent high levels as
    milk production gains are relatively strong. Milk prices then rise
    through the rest of the projections, but increases are projected to
    be less than the general inflation rate. Efficiency gains in
    production accommodate moderately higher overall per capita
    consumption at declining real prices.

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[]{#US_Ag_sector_agg_indicators .anchor}**U.S. Agricultural Sector
Aggregate Indicators**

**Farm Income, Food Prices and Expenditures, and U.S. Trade Value**

Steady domestic and international economic growth supports gains in
consumption, trade, and prices. In addition, large increases in
corn-based ethanol production affect production, use, and prices of farm
commodities throughout the sector. These factors combine to result in
higher market prices and increasing cash receipts. Rising production
expenses and lower government payments offset some of the gains in cash
receipts and other sources of farm income, although net farm income
remains strong and reaches record levels in the second half of the
projections. Similarly, U.S. agricultural export values are robust
through the projections and set new records beyond 2012. On average,
consumer food prices are projected to rise more slowly than the general
rate of inflation over the next decade, although continuing adjustments
due to higher energy-related costs and agricultural commodity prices
push food prices up faster in some years.

![](media/image56.wmf){width="4.7in" height="2.997916666666667in"}

Strong domestic use and export demand push U.S. net farm income from a
projected record of about \$90 billion in 2008 to almost \$100 billion
by 2017.

-   Expansion of corn-based ethanol production is a major factor
    underlying large increases in cash receipts in 2006-08. Continuing
    demand strength in domestic and international markets result in
    further gains in cash receipts through the projections. Lower
    government payments, due to higher commodity prices, and rising farm
    production expenses offset some of the gains in cash receipts,
    although net farm income remains historically high.

## 

> ![](media/image57.wmf){width="4.7in" height="2.997916666666667in"}

Direct government payments to farmers are projected to fall from \$13
billion in 2008 to an average of less than \$10 billion annually in 2009
to 2017, largely due to higher commodity prices and correspondingly
lower price-dependent program benefits.

-   Strong domestic and international demand for crops, including corn
    for ethanol production, causes projected market prices for crops to
    be at levels that result in very low government payments for
    price-sensitive income-support programs. For example, even with
    stochastic considerations included here to capture potential
    variation in farm program benefits due to shocks to production
    yields, payments for marketing loan benefits and counter-cyclical
    payments for feed grains are minimal, totaling less than \$500
    million over calendar years 2008-17 for the projections scenario in
    this report.

-   In contrast, with higher crop prices, use of land for production is
    more valuable, so rental rates for land in the Conservation Reserve
    Program (CRP) rise and push overall annual CRP payments to close to
    \$3 billion toward the end of the projections. As a result, fixed
    direct payments under the 2002 Farm Act and conservation payments
    account for a larger share of total direct government payments in
    the farm income accounts, over 80 percent in 2015-17.

[]{.mark}

-   With lower government payments, the agriculture sector relies on the
    market for more of its income, and the share of income provided by
    government payments falls. Government payments, which represented
    more than 8 percent of gross cash income in 2005, account for less
    than 3 percent during most of the projection period. Conversely,
    cash receipts plus farm-related income rises to over 97 percent of
    gross cash income.

> ![](media/image58.wmf){width="4.7in" height="2.997916666666667in"}

Total production expenses increase at less than the general inflation
rate from 2009-17, following the adjustments to higher energy costs that
started in 2004. These expenses are divided into three categories in the
chart above: farm-origin (seed, feed, and feeder livestock),
manufactured (fuel, fertilizer, pesticides, and electricity), and other
(labor, interest, net rent to nonoperator landlords, and other
expenses).

-   The largest percentage increase is for "other" expenses, reflecting
    increases in labor expenses, interest costs, and net rent to
    nonoperator landlords. Labor expenses rise as sector output
    increases and wage rates rise. Projected increases in interest costs
    reflect higher interest rates, as well as increased debt facilitated
    by higher income. Increases for net rent reflect higher cash
    receipts and profitability as well as larger sector output.

-   Projected manufactured-input expenses reflect high oil prices and
    larger crop production. After increases in 2004-08 that were mostly
    due to rising oil prices, these expenses increase moderately through
    2013 during a period of relatively stable oil prices. Then as oil
    prices rise faster than the general inflation rate over the
    remainder of the projection period, production expenses for
    manufactured inputs rise more rapidly.

-   Farm-origin expenses rise less than the general inflation rate. Feed
    expenses, which have risen sharply in recent years with higher corn
    prices, are relatively flat in the projections period as corn prices
    stabilize. Seed expenses increase only moderately as acreage
    declines from 2008 highs and then stabilizes. Expenses for purchased
    livestock also increase moderately as the livestock sector continues
    to adjust to higher feed costs.

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-   Cash operating margins remain relatively stable over the projections
    period at about 73 percent as cash receipts and gross cash incomes
    rise at close to the same pace as cash expenses.

![](media/image59.wmf){width="4.229861111111111in"
height="2.6972222222222224in"}

Adjustments in retail prices due to higher energy and agricultural
commodity prices are projected to continue for the next 2 years and lead
to food price increases somewhat larger than general inflation in 2008
and 2009. For the rest of the projections period, however, retail food
prices increase less than the general inflation rate.

-   Relatively large price increases are expected in 2008 for fats and
    oils and for cereals and bakery products, reflecting higher prices
    for vegetable oils and wheat. Consumer prices for red meats,
    poultry, and eggs exceed the general inflation rate in 2009 as the
    livestock sector adjusts to higher feed costs due to the expansion
    in corn‑based ethanol production. Smaller increases in meat prices
    are then projected as production growth resumes.

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-   Prices for food away from home reflect the overall inflation rate as
    well as some effect of price movements for retail meat and poultry.
    Income growth supports continuing gains in prices for food
    consumption away from home, although competition in the fast-food
    and foodservice industries tend to moderate these price increases.

> ![](media/image60.wmf){width="4.229861111111111in"
> height="2.6972222222222224in"}

-   Expenditures for meals prepared away from home account for a growing
    share of food spending, reaching about 52 percent of total food
    expenditures by 2017.

> ![](media/image61.wmf){width="4.7in" height="3.5055555555555555in"}

The value of U.S. agricultural exports rises in the projections due to
increases in both export volumes and prices. Strong domestic economic
growth and consumer demand boost agricultural imports.

-   The value of U.S. agricultural exports is projected to grow from
    \$82 billion in fiscal year 2007 to more than \$103 billion in 2017.
    The lower value U.S. dollar is an important factor underlying recent
    export gains and the projected growth. In addition, steady world
    economic growth, particularly in developing countries, provides a
    foundation for gains in trade and U.S. agricultural exports. Higher
    commodity prices due to expansion of global biofuel demand also
    contribute to the gains in export values.

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-   Recent increases in bulk commodity prices have strengthened bulk
    export values, pushing the share of exports accounted for by
    high-value products (HVP) down through fiscal year 2008. In the
    longer run, however, HVP export values grow in importance again,
    representing about 65 percent of the value of U.S. exports by the
    end of the projection period. Much of the growth in HVP exports is
    for animal products and horticultural products.

-   U.S. agricultural import values rise to almost \$105 billion in
    2017, boosted by gains in consumer income and demand for a large
    variety of foods. Strong growth in horticultural imports is assumed
    to continue, contributing over half of the overall agricultural
    import increase.

-   Overall, the U.S. agricultural trade surplus is projected at \$15.5
    billion in fiscal year 2008, largely due to recent gains in bulk
    commodity prices and bulk export values. The agricultural trade
    balance declines from this level over the projections period, as
    bulk exports remain relatively flat while imports continue steady
    gains.

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[]{#Agricultural_trade .anchor}**Agricultural Trade**

World consumption of many grain, oilseed, and meats has exceeded
production in the past several years. As a result, global stocks have
dropped sharply---to record lows in some cases---and prices have risen.
Tight market conditions are projected to persist for many commodities
over most of the coming decade, keeping agricultural commodity prices
high.

Robust global economic growth provides a foundation for gains in world
demand for agricultural products. Rapid expansion of ethanol and
biodiesel production in some countries also adds to the growth in global
agricultural demand.

The growing economies of developing countries are the main source of
growth in world agricultural demand and trade. Food consumption and feed
use are particularly responsive to income growth in those countries,
with movement away from staple foods and increased diversification of
diets. The import demand of developing countries is further reinforced
by population growth rates that remain nearly twice that of developed
countries.

International trade in animal products, however, remains heavily
dependent on demand from developed countries and from the market access
achieved under existing trade agreements. Strong policy support for
domestically produced meat is expected to motivate growth in feed grain
imports, especially in regions where limited land availability or
agroclimatic conditions preclude expanding domestic crop production,
such as North Africa, the Middle East, and East and Southeast Asia.

Traditional exporters of a wide range of agricultural commodities, such
as Argentina, Australia, Canada, the European Union (EU-27), and the
United States, remain important in the coming decade. But countries that
are making significant investments in their agricultural sectors,
including Brazil, Russia, Ukraine, and Kazakhstan, are expected to have
an increasing presence in export markets for basic agricultural
commodities.

World agricultural production rises in response to high prices and
technology enhancements. However, limited ability to expand planted area
in many countries and higher input costs, particularly for energy
intensive inputs such as fuel and fertilizer, constrain production
growth and raise uncertainties about future supply response.

**General International Assumptions**

Trade projections to 2017 are founded on assumptions concerning trends
in foreign area, yields, and use and on the assumption that countries
comply with existing bilateral and multilateral agreements affecting
agriculture and agricultural trade. The projections incorporate the
effects of trade agreements and domestic policy reforms in place or
signed by November 2007.

Domestic agricultural and trade policies in individual foreign countries
are assumed to continue to evolve along their current paths, based on
the consensus judgment of USDA's regional and commodity analysts. In
particular, economic and trade reforms underway in many developing
countries are assumed to continue. Similarly, the development and use of
technology and changes in consumer preferences are assumed to continue
evolving based on past performance and analysts' judgments regarding
future developments.

![](media/image66.wmf){width="4.7in" height="3.2993055555555557in"}

Global trade in soybeans and soybean products has risen rapidly since
the early 1990s, and has surpassed not only wheat---the traditional
leader in agricultural commodity trade---but also total coarse grains
(corn, barley, sorghum, rye, oats, millet, and mixed grains). Continued
strong growth in global demand for vegetable oil and protein meal,
particularly in China, is expected to maintain soybean and
soybean-product trade well above wheat and coarse grains trade
throughout the next decade.

-   Wheat, coarse grains, and oilseeds (including soybeans) compete with
    each other and with other crops for limited cropland. Higher prices
    for vegetable oils, partially the result of increased demand for
    biodiesel, are bringing previously uncropped land in Brazil and
    Indonesia into soybean and palm oil production.

-   In the projections, the growth in total area planted to all crops
    rises less than a half-percent per year in most countries. Area
    expansion occurs more rapidly in countries with a reserve of
    available land and policies that enable farmers to respond to higher
    projected world prices. Such countries include Brazil, Argentina,
    other South American countries, some Eastern European countries, and
    Ukraine. About two-thirds of the growth in global production is
    derived from rising yields. The growth rate in crop yields has
    slowed somewhat during the last several decades and is projected to
    continue to do so.

-   The impact of slowing growth in total crop production is partially
    offset by slowing growth in world population. Nonetheless,
    population is a significant factor driving overall growth in demand
    for agricultural products. Additionally, rising per capita income in
    many countries generates growth in demand for vegetable oils,
    livestock products, and horticultural products.

-   In the coming decade, overall gains in global grain trade come from
    a broad range of countries, particularly from countries in Africa
    and the Middle East. Also, China exports less grain and imports
    more.

**Global Demand for Biofuel Feedstocks**

Investments in biofuel production capacity are occurring in many
countries. Although the main feedstocks used are corn and sugarcane for
ethanol and rapeseed and soybean oils for biodiesel, other feedstocks
are also being used, such as barley, wheat, rye, wine, and cassava for
ethanol production and a variety of other vegetable oils, recycled oils,
and fats from the food industry for biodiesel.

**Assumptions Used for the USDA Projections**

Biofuels production and the demand for biofuels feedstocks are projected
to continue growing in a number of countries. The projections are based
on a combination of historical biofuel production data, USDA
interpretation of statements by foreign governments about their plans
for biofuel development, and other information about potential
investments in biofuel production capacity.

**Country Assumptions**

**EU:** The EU has a "target" to obtain 5.75 percent of transportation
fuel from biofuels by 2010.  Additionally, EU policy has provided a
per-acre subsidy for the production of energy crops, although the
subsidy level has been reduced recently.  Individual member states also
offer tax credits on biofuels. The projections assume that about
two-thirds of the EU target is met by 2010 and that, with increasing
total fuel use, the 2010 target is still not quite reached by 2017. The
projections further assume that biodiesel accounts for two-thirds of
total biofuels and ethanol accounts for the other third. Rapeseed oil is
the feedstock for nearly all EU biodiesel production. In the EU, area
planted to rapeseed and oilseed crushing capacity are both projected to
increase sharply.  In addition, the EU increases rapeseed oil imports
from Russia and Ukraine. It also imports some palm oil from Southeast
Asia, as well as some biodiesel (processed from palm oil) from Southeast
Asia. Some biodiesel is also imported from the United States. Since the
5.75 percent "target" was set, the EU has established a "mandate" that
biofuels account for 10 percent of transportation fuel use by 2020.
USDA's assumptions imply progress toward this mandate would be behind
schedule throughout the projections period.

**Brazil:** Sugarcane is the feedstock for nearly all of Brazil's
ethanol production. In southern Brazil, some land has already been
shifted from grain and oilseeds production to sugarcane. The projections
assume this trend continues, but at a slower pace. As a result of
implementation of a domestic fuel mandate in 2008, biodiesel production
is assumed to increase sharply during the next several years before
leveling off. Much of the new capacity will be in the soybean production
areas in the Central-West region of the country, which will reduce
petroleum-based diesel fuel that has to be trucked to the interior.

**Canada:** Canadian biodiesel production is projected to more than
double between 2007 and 2017. Most of the increased production will be
from rapeseed produced and processed in the Prairie Provinces. Ethanol
production is projected to continue expanding rapidly also. The amount
of corn and wheat used for feedstocks is expected to rise sharply during
the next half decade.

*\--Continued*

**Global Demand for Biofuel Feedstocks** *(Continued)*

**Argentina:** The production of biodiesel in Argentina is assumed to
more than double between 2007 and 2017. Argentina has a system of
differential export taxes that has lower tax rates for biofuels exports
than the tax rate on exports of feedstocks such as corn or soybean oil.
In turn, the export tax on soybean oil is lower than the tax on soybean
exports. For biodiesel, this provides an incentive for further
investments in Argentina's already large crushing industry. Argentina is
projected to import some soybeans from other South American countries to
keep its crushing facilities running at near full capacity.

**Other Europe and the former Soviet Union:** This region is assumed to
respond to the EU's expanding demand for biodiesel by rapidly increasing
rapeseed production. In Russia and Ukraine, rapeseed production more
than triples in the projections. Much of the production gains are
destined for export to the EU, either as rapeseed oil or as rapeseed for
crushing in the EU.

**China:** In 2007, approximately 3.5 million tons of corn were used to
produce fuel ethanol in China. About five times as much corn was used to
produce ethanol for industrial and beverage uses. Because of its food
security policy, the government is trying to slow the growth in overall
corn-based ethanol production, attempting to focus on the use of
nongrain feedstocks such as sweet potatoes and cassava. Consequently,
increases in corn-based ethanol production for industrial and beverage
uses are expected to slow and no further growth is projected for
corn-based fuel ethanol.

**Malaysia and Indonesia:** Growing worldwide demand for vegetable oils
for human consumption and biodiesel production stimulates further
expansion of the area planted to oil palm. The projections assume
moderate growth in Malaysian and Indonesian palm oil production and
exports for biodiesel use.

![](media/image67.wmf){width="4.7in" height="3.3979166666666667in"}

Growth in wheat imports is concentrated in those developing countries
where robust growth in income and population underpins increases in
demand. Important growth markets include Sub-Saharan Africa, Egypt,
Pakistan, Algeria, Indonesia, the Philippines, and Brazil. World wheat
trade (including flour) expands by more than 26 million tons (23
percent) between 2008 and 2017 to 137 million tons.

-   Egypt maintains its position as the world's largest importing
    country, as imports climb slowly to nearly 9 million tons. Imports
    by Brazil, another large importer, are projected to exceed 8 million
    tons. Brazil's climate generally does not favor wheat, and in some
    key wheat-producing states, winter corn is expected to have better
    returns than wheat.

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-   Imports by developing countries in Sub-Saharan Africa, North Africa,
    and the Middle East rise nearly 12 million tons and account for 45
    percent of the total increase in world wheat trade. In most
    developing countries, little change in per capita wheat consumption
    is expected but imports expand modestly because of population growth
    and limited potential to expand production.

-   Changing consumption patterns will boost wheat imports by some major
    importing countries. In Indonesia, strong economic growth and
    diversification of diets are projected to increase per capita wheat
    consumption. Mexican consumers are projected to continue
    substituting wheat for corn in their diets as incomes rise.

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-   Lower wheat-to-corn price ratios during most of the projection
    period enable wheat to compete effectively with corn for feed use in
    a number of countries. Europe is expected to continue to account for
    the largest share of global wheat feeding.

-   China has been a small net exporter of wheat in recent years, but
    production constraints cause it to become a small net importer
    toward the end of the projections.

> ![](media/image68.wmf){width="4.7in" height="3.501388888888889in"}

The top five wheat-exporting nations (the United States, Australia, the
EU, Argentina, and Canada) account for 70 percent of world trade in
2008-17. This is down from 89 percent in 1997/98, mostly due to
increased exports from the Black Sea area. U.S. wheat exports are
projected to account for less than 19 percent of global wheat trade at
the end of the projection period, down from 25 percent in the past 5
years. The global stocks-to-use ratio has declined sharply during the
last half decade to the lowest level on record. Despite a significant
rebound in global production, low stocks and relatively high prices are
projected to persist for most of the next decade.

-   Shares of the world wheat market held by Canada and the United
    States decline slightly, while shares increase for the EU, Ukraine,
    Russia, Australia, and Argentina.

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-   In Canada, increased demand for vegetable oils, especially rapeseed
    oil for biodiesel production, and increasing demand for barley are
    expected to reduce wheat area, and limit any growth in wheat
    exports.

-   Ukraine, Russia, and Kazakhstan have become significant wheat
    exporters in recent years. Low costs of production and new
    investment in their agricultural sectors have enabled their combined
    world market share to climb to about 20 percent in the last 2 years.
    Exports from Ukraine and Russia are projected to continue gaining
    market share, more than offsetting a slight decline in the share
    held by Kazakhstan. However, because of the region's highly variable
    weather and yields, year-to-year volatility in production and trade
    can be expected. Also, continued real appreciation of these
    countries' currencies, caused mainly by strong foreign exchange
    earnings and domestic inflation, could moderate the rise in exports.

-   Wheat exports by Turkey and other smaller exporters change little or
    trend slowly downward during the projection period. Although India
    has exported some wheat in recent years, exports are expected to be
    minimal and imports to increase as domestic demand outpaces
    production and stocks remain relatively low.

![](media/image69.wmf){width="4.7in" height="3.2993055555555557in"}

Growth in coarse grain trade is strongly linked to expansion of
livestock production in regions unable to meet their own feed needs. Key
growth markets include China, Mexico, North Africa, the Middle East, and
Southeast Asia. Japan and South Korea are large but mature import
markets for coarse grains.

-   Corn is the dominant feed grain traded in international markets.
    Corn accounts for an average of 79 percent of all coarse grain trade
    through the projection period, followed by barley (15 percent) and
    sorghum (4 percent).

-   Commercialization of livestock feeding has been a driving force
    behind the growing dominance of corn in international feed grain
    markets. Hogs and ruminants, such as cattle and sheep, are capable
    of digesting a broad range of feedstuffs, making demand relatively
    price-sensitive across alternate feed sources. However, as pork and
    poultry production become increasingly commercialized, higher
    quality feeds are used, boosting the demand for corn and soybean
    meal.

-   Mexico's composition of coarse grain imports is expected to change
    during the early part of the projection period. Under the North
    American Free Trade Agreement (NAFTA), Mexico's over-quota tariff on
    U.S. and Canadian corn ended on January 1, 2008. Consequently,
    Mexico's grain imports shift more to corn rather than sorghum. Also,
    after 2008/09, Mexico's imports of kibbled and cracked corn
    (processed corn that has already been tariff free) are projected to
    be increasingly replaced by whole-grain corn. Mexico's corn imports
    continue to rise through the rest of the projections, while sorghum
    imports resume growth after 2009/10.

![](media/image70.wmf){width="4.46875in"
height="3.232638888888889in"}World coarse grain trade expands nearly 21
million tons (18 percent) from 2008 to 2017. About two-thirds of global
coarse grain production is used as animal feed. Industrial uses, such as
starch, ethanol, and malt production, are smaller but growing. Food use
of coarse grains, concentrated in parts of Latin America, Africa, and
Asia, is projected to continue declining.

-   World prices for grains have risen during the last several years as
    global stocks of grain declined sharply. Although the higher prices
    are projected to stimulate grain production, neither stocks-to-use
    ratios nor prices return to levels common during the last 3 decades.

-   Steady longrun growth in the livestock sectors of developing
    countries in Asia, Latin America, North Africa, and the Middle East
    is projected to account for most of the growth in world coarse grain
    imports during the next decade.

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-   Mexico's corn imports are projected to rise from 8.8 million tons in
    2006/07 to 15 million tons in 2017. Imports will be stimulated by
    rising poultry production and the elimination of Mexico's over-quota
    tariff on U.S. and Canadian corn on January 1, 2008. Some corn
    imports will substitute for imports of kibbled corn and sorghum,
    which already had tariff‑free status.

-   North Africa and the Middle East experience continued growth in
    import demand for grain and protein meals through 2017 as rising
    populations and increasing incomes sustain strong demand growth for
    domestically-produced animal products. In Egypt, government policy
    has shifted toward allowing more poultry meat imports. Still,
    poultry production is projected to rise, boosting corn imports more
    than 1 million tons.

-   In Japan, South Korea, and Taiwan, environmental regulations
    constrain meat production, which results in increasing meat imports
    and no growth in coarse grain imports.

-   The EU's corn and sorghum imports decline in 2008 as production
    returns to normal levels, but in subsequent years corn imports from
    Other Europe, particularly Serbia, are expected to increase.

-   Countries in Southeast Asia raise corn imports more than 1.5 million
    tons (30 percent) during the projection period as their increased
    demand for livestock products exceeds their capacity to grow more
    feed grains.

![](media/image71.wmf){width="4.7in" height="3.2993055555555557in"}

The United States dominates world trade in coarse grains, particularly
corn. However, increasing use of corn for U.S. ethanol production and
reduced world trade are assumed to limit U.S. export growth early in the
projection period. During the next half decade, some countries respond
to higher world prices by increasing corn production and exports---most
notably Argentina and Ukraine. Still, U.S. corn exports are projected to
resume growth during the middle part of the projection period after the
ramp-up in domestic ethanol production slows. The U.S. share of world
corn trade stays close to 60 percent as few countries have the
capability to respond to rising international demand for corn.

-   Argentina, with a small domestic market, remains the world's
    second-largest corn exporter. Argentina's corn planted area
    gradually increases in response to higher prices. Corn exports rise
    steadily by 27 percent to more than 21 million tons. Argentina and
    other South American countries increase corn exports to Chile to
    support its expanding pork exports to South Korea.

-   Corn exports from some countries of the former Soviet Union,
    primarily Ukraine, double to 7 million tons by 2017. Favorable
    resource endowments, increasing economic openness, and greater
    investment in their agricultural sectors stimulate corn production,
    and combined with increasing meat imports, leave a corn surplus
    available for export.

-   Brazil's corn exports are at record high levels during the early
    years of the projections in response to higher corn prices relative
    to soybean prices. In the last several years, Brazil has targeted
    the EU's demand for non-genetically modified grain. This ability is
    assumed to diminish as Brazil legalizes planting genetically
    modified varieties of corn and the EU reduces imports. Also, strong
    growth in domestic demand from its livestock and poultry sectors and
    the profitability of growing soybeans limits corn exports.

-   China's corn exports decline in the projections, reflecting
    strengthening domestic demand driven by its expanding livestock and
    industrial sectors.

![](media/image72.wmf){width="4.7in" height="2.997916666666667in"}

Although Chinese corn production is projected to increase, China becomes
a net corn importer midway through the projection period as demand for
livestock feed overtakes China's internal supplies of corn. Due to
regional supply and demand differences, China continues to export corn
throughout the projection period, although in declining amounts (see
note below).

-   Corn is the favored crop in northeast China. Proximity to Asian
    markets, especially South Korea, provides a nearby source of demand,
    while various government measures---including waivers of certain
    transportation construction taxes---keep corn exports competitively
    priced in international markets. High ocean-freight rates raise the
    delivered cost of U.S. corn to Asian markets, another factor that
    keeps Chinese corn competitive. Shipments of corn from northeast
    China to the country's southern markets are limited by China's high
    internal transportation costs.

-   As China's corn consumption continues to grow, the country is
    projected to increase imports and reduce exports, and to eventually
    become a net corn importer by the middle of the projection period.
    Livestock feeding continues to increase as income growth raises meat
    demand. Industrial use of corn, especially for starch, is also
    expected to grow robustly in China, but direct human consumption
    declines.

> **Note**: Projections do not reflect China's December 2007 policy
> changes that reduce incentives to export grains and grain products.
> The first policy change eliminated an export subsidy (refunds of
> value-added taxes on exports of various grain and grain products). A
> second policy change imposed export taxes on shipments of a similar
> set of grain and grain products.

![](media/image73.wmf){width="4.7in" height="3.5in"}

Global barley trade expands 3.6 million tons (22 percent) during the
projection period. Rising demand for both malting and feed barley
underpin the increased trade.

-   Feed barley imports by North African and Middle Eastern countries
    grow steadily over the next decade. In the mid-1990s, corn overtook
    barley as the principal coarse grain imported by these countries,
    due mainly to rising poultry production. This pattern is expected to
    continue through the projection period. However, the North Africa
    and Middle East region is expected to remain the world's largest
    barley importing area.

-   Saudi Arabia---the world's foremost barley importer---accounts for
    over 35 percent of world barley trade through the coming decade.
    Saudi Arabia's barley imports are used primarily as feed for camels,
    goats, and sheep.

-   International demand for malting barley is boosted by strong growth
    in beer demand in many developing countries, notably China---the
    world's largest malting barley importer. China's beer demand is
    rising steadily due to growth in incomes and population. Expansion
    in China's brewing capacity is being aided by foreign investment.
    China's breweries also use rice and other grains to produce
    alcoholic beverages. Australia and Canada are China's main sources
    of malting barley imports.

![](media/image74.wmf){width="4.7in" height="3.3979166666666667in"}

Historically, global barley exports have originated primarily from the
EU, Australia, and Canada. However, Ukraine and, to a lesser extent,
Russia have emerged as important competitors in international feed
barley markets and remain so throughout the projection period.

-   Barley production is expected to increase in the EU as a result of
    Common Agricultural Policy (CAP) reform. The abolition of EU
    intervention for rye, combined with high barley prices, will
    stimulate the allocation of more area to barley production. EU
    exports to non-EU countries are projected to climb nearly 50 percent
    to 4.7 million tons over the projection period (24 percent of world
    trade), as projected prices are high enough that the EU is able to
    export barley without subsidies.

-   The FSU remains a major barley exporter throughout the coming decade
    as exports surpass 8 million tons. Together, the FSU and EU account
    for nearly 65 percent of world barley exports by 2017.

-   Malting barley is a different quality than feed barley and commands
    a substantial price premium over feed barley. This premium is
    expected to influence planting decisions in Canada and Australia
    and, in both countries, malting barley's share of total barley area
    rises during the projection period. However, some of Canada's total
    barley area shifts to canola because of stronger prices due to the
    demand for biodiesel feedstocks, and total barley exports trend
    downward during the coming decade.

![](media/image75.wmf){width="4.7in" height="2.997916666666667in"}

World sorghum trade, which averaged nearly 6.5 million tons during the
last decade, declines to below 5 million tons in the middle of the
projection period before rising slightly through the remainder of the
coming decade. This trade is driven almost entirely by U.S. exports to
Mexico and Japan.

-   Mexico is the world's leading sorghum importer in most years. Some
    sorghum imports are expected to be replaced by corn imports because,
    under NAFTA, Mexico's over-quota tariff on U.S. and Canadian corn
    ended on January 1, 2008. Mexico's sorghum imports are projected to
    increase slightly in the later years, but remain below 2.7 million
    tons. Even at this reduced import level, Mexico accounts for more
    than 45 percent of world sorghum imports.

-   The EU normally imports small quantities of sorghum, but became the
    world's largest importer in 2007/08. As the EU's corn production
    declined in 2006 and again in 2007, the region increased imports of
    nongenetically modified corn, generally from Brazil. However, as
    exportable world supplies of nongenetically modified corn became
    more limited and corn prices jumped, the EU began to import sorghum
    as an alternative. EU corn production is assumed to return to normal
    levels in 2008 and its 2008/09 imports of both corn and sorghum are
    projected to recede.

-   Japan imports a fairly constant volume of sorghum (1.3 million tons)
    throughout the period to maintain diversity and stability in its
    feed grain supplies.

-   The United States is the largest exporter of sorghum, accounting for
    more than 80 percent of world trade in recent years. During most of
    the projection period, the U.S. share remains in the 80-83 percent
    range even though some of its sorghum exports to Mexico shift to
    corn.

-   The primary sorghum markets for Argentina, the world's second
    largest exporter, are Japan, Chile, and Europe. In Argentina, prices
    and profitability are expected to favor planting soybeans and corn,
    so sorghum exports remain relatively flat during the projection
    period.

-   Brazil has begun to export small quantities of sorghum and the
    volume is projected to rise during the projection period. In the
    Central-West region of Brazil, sorghum is increasingly planted
    during the dry season between crops of soybeans or cotton.

![](media/image76.wmf){width="4.7in" height="2.997916666666667in"}

Strong income and population growth in developing countries generate
increasing demand for vegetable oils for food consumption and for
protein meals used in livestock production. Additional demand is
generated by the use of vegetable oils in biodiesel production in some
countries. As a result, world trade in soybeans and soybean oil each
grow at an average annual rate of 3.3 percent through the projection
period, compared with 3.1 percent for soybean meal.

-   Prices for vegetable oils rise due to increasing consumer demand in
    developing countries and the expansion of biodiesel production. As
    more of the value of oilseeds derives from the oil content relative
    to the protein meal content, vegetable oil prices rise in comparison
    to prices for oilseeds and protein meals.

-   Many countries with limited opportunity to expand oilseed production
    continue investment in oilseed crushing capacity, such as China and
    some countries in North Africa, the Middle East, and South Asia. As
    a result, import demand for soybeans and rapeseed grows rapidly.
    However, strong competition in international protein meal markets is
    expected to shift some of the import demand from oilseeds to cheaper
    meals. The competitive pressure of new oilseed crushing capacity is
    expected to result in some inefficient crushers going out of
    business.

-   China's expansion of domestic crushing capacity instead of importing
    protein meal and vegetable oil significantly influences the
    composition of world trade by raising global import demand for
    soybeans and other oilseeds rather than for oilseed products.

-   Brazil's rapidly increasing soybean area enables it to gain a larger
    share of world soybean and soybean meal exports, despite increasing
    domestic feed use. Its share of world exports of soybeans plus the
    soybean equivalent of soybean meal rises from about 30-35 percent in
    recent years to 43 percent by 2017.

-   The expansion in Argentine soybean area slows as incentives to grow
    corn and sunflower seed improve and the conversion of pasture land
    to crop land slows.

-   The EU set-aside rate is assumed to be zero during the projections.
    Except in 2008, most land previously set aside will be planted to
    rapeseed destined for biodiesel production.

> ![](media/image77.wmf){width="4.600694444444445in"
> height="3.2993055555555557in"}

World soybean trade is projected to rise rapidly, climbing more than 27
million metric tons (35 percent) during the next decade.

-   The EU was the world's leading importer of soybeans until 2002.
    However, increases in grain and rapeseed meal feeding and rising
    imports of soybean meal have resulted in declining soybean imports
    since then.

-   China will face policy decisions regarding tradeoffs in producing or
    importing corn and soybeans. The projections assume that Chinese
    policies will support maintaining domestic corn production and
    importing soybeans. Thus, China accounts for 80 percent of the
    world's 27-million-ton growth in soybean imports over the next 10
    years. Significant investments in oilseed crushing infrastructure by
    China drive strong gains in soybean imports as China seeks to
    capture the value added from processing oilseeds into protein meal
    and vegetable oil. The use of vegetable oils for biofuels production
    is assumed to have a negligible impact on China's total vegetable
    oil use.

-   East Asia's trade outlook is dominated by a continuing shift from
    importing feedstuffs to importing meat and other livestock products.
    As a result, this region's import demand for protein meal and
    oilseeds does not rise during the coming decade despite rising meat
    consumption.

-   As Argentina seeks to operate its expanding crushing facilities at
    full capacity, it is projected to import 4 million tons of soybeans
    from Brazil, Paraguay, Uruguay, and Bolivia by the end of the
    period.

![](media/image78.wmf){width="4.7in" height="3.1013888888888888in"}

> The three leading soybean exporters---the United States, Brazil, and
> Argentina---have accounted for more than 90 percent of world trade in
> recent years. Their market share is projected to decline to slightly
> less than 90 percent as exports rise from minor exporting countries,
> such as Uruguay, Paraguay, and Bolivia.

-   With continuing area gains, Brazil maintains its position as the
    world's leading exporter of soybeans and soybean products. Combating
    soybean rust disease increases production costs. However, because of
    increased domestic demand for soybean meal for feed and soybean oil
    for human consumption and biodiesel production, soybeans remain more
    profitable than other crops in most areas of Brazil. It is assumed
    that some land in southern Brazil will shift from oilseed to corn
    production during the middle of the projection period in response to
    higher corn prices and more limited competition from U.S. corn
    exports. Still, with expanded soybean plantings in the Cerrado
    regions, the growth rate for Brazil's soybean planted area is
    projected to average nearly 3.5 percent a year, reaching about 31
    million hectares by 2017. Soybean exports are projected to almost
    double.

-   Argentina's export tax rates are higher for soybeans than for
    soybean products. This favors domestic crushing of whole seeds and
    exporting the products. Also, Argentina is projected to divert some
    land from soybeans to corn. As a result, Argentina's soybean exports
    remain around 8 to 9 million tons.

-   Other South American countries, principally Uruguay, Paraguay, and
    Bolivia, expand exports 40 percent to more than 9 million tons. Four
    million tons are destined for the crushing industry in Argentina.

-   Russia and Ukraine respond to higher international market prices for
    oilseeds by increasing production of rapeseed and soybeans. Although
    rapeseed production will be most affected, soybean exports are
    projected to increase somewhat.

-   In the United States, reduced soybean acreage and increased domestic
    crush limit exportable supplies, but their competitiveness is aided
    by depreciation of the U.S. dollar.

![](media/image79.wmf){width="4.7in" height="3.5in"}World trade in
soybean meal grows briskly during the projections, rising more than 18
million tons (over 30 percent) by 2017. Continuing growth in the demand
for livestock products and limited capability to increase oilseed
production boost demand for soybean meal by a number of countries with
rising middle-income populations. Lower import prices of soybean meal
relative to soybeans and grains provide incentives for countries to
import soybean meal for inclusion at a higher rate in livestock feed
rations.

-   The EU remains the world's largest destination for soybean meal
    throughout the projection period, despite increased domestic feeding
    of grains. Growth in soybean meal imports is expected to continue
    even though there will be more rapeseed meal available as a result
    of the biofuels expansion. Also, an increase in the dairy production
    quota increases soybean meal feeding.

-   The regions of Southeast Asia, Latin America, and North Africa and
    the Middle East all become larger importers of soybean meal as the
    demand for livestock feed boosts import demand in a number of
    countries.

-   Mexico's strong growth in demand for protein feed and vegetable oils
    is projected to continue. The crushing industry in Mexico is also
    expected to continue expansion. This will boost soybean imports, but
    soybean meal imports from the United States are also expected to
    grow rapidly.

![](media/image80.wmf){width="4.7in" height="3.1013888888888888in"}

> Argentina, Brazil, and the United States remain the three major
> exporters in international protein meal markets. Together they account
> for around 90 percent of total world soybean meal trade during the
> next 10 years. Argentina, the world's largest soybean meal exporter,
> increases its share of the world market from around 45 percent in
> recent years to more than 55 percent after 2008/09. Brazil's share of
> world exports remains in the 20-25 percent range while the shares held
> by the United States and other exporters fall.

-   Argentina imposes higher export taxes on soybeans than on soybean
    products. This has provided an incentive for the country to develop
    a large oilseed crushing capacity. Argentina maintains high
    utilization of its growing crushing capacity by importing soybeans
    from Brazil and other South American countries.

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-   In Brazil, strong growth in domestic meal consumption due to rapid
    expansion of the poultry and pork sectors limits increases in
    soybean meal exports. Also, domestic soybean crushing capacity is
    not expected to grow as fast as soybean production because Brazil's
    differential export tax structure favors exporting soybeans rather
    than soybean meal or soybean oil.

-   U.S. soybean meal exports hold steady at around 8 million tons
    throughout the projections, but the U.S. share of world trade
    declines steadily from more than 14 percent in recent years to less
    than 11 percent by 2017.

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```
-   The EU continues to be a small but steady exporter of soybean meal
    to Russia and other East European countries. India remains an
    exporter, although export volume declines as domestic use,
    especially for poultry feed, rapidly expands.

![](media/image81.wmf){width="4.7in" height="3.2993055555555557in"}

> World demand for soybean oil imports climbs 3.8 million metric tons
> (33 percent) in the projections, bolstered by rising food use and
> increased demand for use in biofuel production. China and India are
> the world's two largest soybean oil importers---importing primarily
> for food use. In recent years, their combined imports have been around
> 3.5 million tons, nearly 40 percent of the world total.

-   Import demand for soybean oil rises in nearly all countries and
    regions. Income and population growth in North Africa, the Middle
    East, and Latin America (particularly Central America and the
    Caribbean) drive rapid gains in soybean oil imports. Although rising
    international prices for soybean oil will temper consumption,
    especially in developing countries, imports by the North Africa and
    the Middle East region are projected to be exceeded only by those of
    China.

-   India is one of the world's largest soybean oil importers. Factors
    that contribute to continued growth in imports include burgeoning
    domestic demand for vegetable oils and limited capacity for domestic
    production of oilseeds. Low yields, associated with erratic rainfed
    growing conditions and low input use, inhibit growth of oilseed
    production in India. Lower Indian tariffs on soybean oil (held down
    by World Trade Organization (WTO) tariff-binding commitments)
    compared with tariffs for other vegetable oils support continued
    large imports of soybean oil.

-   China experiences a growing demand for vegetable oils. However,
    land-use competition from other crops constrains area planted to
    oilseed crops. Even with strong increases in soybean imports for
    crush, domestic demand outpaces domestic vegetable oil production
    and fuels a moderate expansion in soybean oil imports.

-   The EU imports more soybean oil to replace some of the rapeseed oil
    that is used in the production of biodiesel.

![](media/image82.wmf){width="4.7in" height="3.2993055555555557in"}

Argentina's and Brazil's combined share of world soybean oil exports
rises from less than 80 percent in recent years to more than 85 percent
by the end of the projections.

-   Argentina is the leading exporter of soybean oil, reflecting the
    country's large crushing capacity, its small domestic market for
    soybean oil, and an export tax structure that favors exports of
    soybean products rather than soybeans. Increases in soybean crush
    and soybean oil exports are supported by gains in Argentine soybean
    production due to extensive double-cropping, further adjustments to
    crop-pasture rotations, and the addition of marginal lands in the
    northwest part of the country. Argentina also increases soybean
    imports from other South American countries in order to more fully
    utilize its crushing capacity. Growth in Argentina's biodiesel
    production capacity, with incentives from a lower export tax for
    biodiesel than for soybean oil, may constrain growth in soybean oil
    exports in the future.

-   Brazil's expansion of soybean production into new areas of
    cultivation enables it to increase both its volume of soybean oil
    exports and its share of world trade.

-   The United States remains the world's next largest soybean oil
    exporter. U.S. soybean oil exports are initially constrained by
    increased use for biodiesel production but expand moderately after
    2010/11 as output gains exceed growth in domestic consumption.
    However, the U.S. share of world trade is projected to be well below
    the average of recent years.

-   In the EU, exportable supplies of vegetable oils are limited by the
    growth in biodiesel production.

![](media/image83.wmf){width="4.7in" height="3.1013888888888888in"}

Global rice trade is projected to grow 2.2 percent per year from 2008 to
2017. By 2017, global rice trade exceeds 37 million tons, nearly 24
percent above the record set in 2005. The main factors driving the
expansion in global trade are a steady growth in demand---largely due to
population growth in developing countries---and the inability to
significantly boost production in key importing nations.

-   Long-grain varieties account for around three-fourths of global rice
    trade and are expected to account for the bulk of trade growth over
    the next decade. Medium- and short-grain rice account for 10-12
    percent of global trade, with Northeast Asia the largest market.
    Aromatic rice, primarily basmati and jasmine, makes up most of the
    rest of global rice trade.

-   Indonesia, the Philippines, and Bangladesh become the three largest
    rice-importing countries by the end of the projection period. By
    2017, each country is projected to import 1.9 million tons or more.
    These three countries have limited ability to expand production and
    are expected to account for nearly 30 percent of the increase in
    global rice imports over the next decade.

-   In Sub-Saharan Africa and the Middle East, strong demand growth is
    driven by rapidly expanding populations. Production growth is
    limited by climate in the Middle East and by infrastructure
    deficiencies in Sub-Saharan Africa. Sub-Saharan Africa accounts for
    27 percent of the increase in world rice trade between 2008
    and 2017. Iraq and Saudi Arabia account for most of the increase in
    imports by the Middle East.

-   The Central American and Caribbean region is projected to expand
    imports over the next decade, increasing about 0.5 million tons to
    2.2 million by 2017. Population growth and rising per capita incomes
    boost rice consumption and raise this region's imports.

-   The EU will remain a major market for rice, although import growth
    will be modest. Consumption growth will be driven by a larger
    immigrant population. North American imports will also expand over
    the next decade, with both total and per capita consumption rising.
    Imports by the former Soviet Union are projected to decline as
    result of strong production growth and stagnant demand.

![](media/image84.wmf){width="4.7in" height="2.997916666666667in"}

Asia remains the largest rice-exporting region throughout the projection
period.

-   Thailand and Vietnam, the world's largest rice-exporting countries,
    account for half of all rice exports and nearly three-fourths of the
    growth in world exports in the coming decade. Thailand's exports
    increase 3.6 million tons to more than 13 million by 2017. Both area
    and yield are projected to increase in Thailand. Vietnam's export
    expansion is smaller, from 5.3 to 6.5 million tons, as the area
    planted to rice is not expected to expand. Per capita consumption
    declines for both exporters.

-   India is currently the third-largest rice exporter. India has been a
    major exporter since the mid-1990s, although export levels have been
    rather volatile, primarily due to fluctuating production and stock
    levels. Exports are projected to decline about 300,000 tons to 3.3
    million as consumption growth outpaces production. Inability to
    expand area is the main production constraint. India's export volume
    is surpassed by the United States in 2011 and by Pakistan in 2012.

-   The United States is currently the fourth-largest rice-exporting
    country and is expected to increase exports from 3.4 million tons in
    2007 to 4.2 million by 2017. Modest area expansion, continued yield
    growth, and slow growth in domestic consumption result in larger
    exportable supplies. By 2011, the United States is expected to
    become the third-largest exporting country. The Western Hemisphere
    remains the top market for U.S. rice.

-   Pakistan is currently the world's fifth-leading rice exporter and
    exports are projected to slightly increase over the next decade to
    3.5 million tons by 2017. Pakistan has boosted rice area and
    production in the past few years. However, Pakistan can expand rice
    area only a little beyond its current record level, and its
    agricultural sector is confronting a growing water shortage and a
    decaying infrastructure, limiting production and export gains.

-   China, the sixth-largest rice exporting country, is projected to
    raise exports by 0.8 million tons to more than 2.4 million tons
    by 2017. The increase in exports is primarily due to a long-term
    decline in stocks. Little change in production or total
    disappearance is expected. Higher yields are projected to offset
    declining area. Reductions in per capita consumption, a result of
    continued diet diversification resulting from higher incomes, are
    expected to offset population growth.

> ![](media/image85.wmf){width="4.7in" height="3.2006944444444443in"}

With global cotton consumption growing dramatically, international trade
has become increasingly important in world cotton markets. During the
last decade, world consumption climbed at a\
4.7-percent growth rate while world trade rose 6.5 percent a year. Not
only has textile trade liberalization helped boost world cotton demand
through increased efficiency, but geographic shifts in mill use of
cotton have increased the role of trade in meeting the global textile
industry's need for cotton. Trade's importance has rebounded in recent
years as the textile sectors in China and, to a lesser extent, Pakistan
have grown substantially faster than domestic cotton production.

-   The textile industries in China, India, and Pakistan are the major
    beneficiaries of textile trade liberalization through the
    elimination of Multifiber Arrangement (MFA) quotas.

-   China has been importing record amounts of cotton as its textile
    industry's growth rapidly accelerated with a booming economy and WTO
    accession. Both its textile industry and its cotton imports are
    expected to grow more slowly than the rapid increases since 2001.
    However, during the next decade, the increase in cotton imports by
    China is projected to more than offset the decline in imports by
    other countries, and China accounts for almost half of world imports
    by 2017.

-   Pakistan has emerged as a major importer in recent years and is
    projected to be the world's third largest importer during the next
    10 years.

-   In recent years, Turkey's textile industry has benefited from
    favorable trade access to the EU, its major market for textile and
    apparel exports. However, the end of the MFA quotas gives lower cost
    competitors more favorable access to EU markets. Turkey's cotton
    imports are projected to rise slowly over the next 10 years, but not
    enough to keep its share of world trade from falling slightly.

-   The EU, Japan, Taiwan, and South Korea all steadily reduce their
    cotton imports as textile trade reforms and/or higher wages in these
    countries drive textile production to countries with lower wages and
    other costs.

    **China's Cotton Supply and Demand Estimates and the Residual
    Component**

China and its role in the world economy have been transformed beyond
recognition in the last decade. Nevertheless, a textbook on cotton
marketing from the 1920s highlights a problem that remains all too
familiar to this day:

"The size of the Chinese cotton crop has always been a puzzle, owing to
the lack of

reliable statistics." W. Hustace Hubbard, *Cotton and the Cotton
Market*, D. Appleton

and Company, New York, 1923.

Now, 85 years after this observation, the world continues to face
uncertainties in how to interpret information on China's cotton. The
data available to the world at large have developed severe
inconsistencies in recent years. As a result, there have been some
official revisions to the cotton production estimates produced by
China's National Bureau of Statistics. However, a large inconsistency
remains, and USDA publishes supply-and-demand estimates for cotton in
China that include an unexplained residual.

The inconsistency is a shortfall between net imports and estimated
excess demand (consumption minus production). Since 1999, China's net
cotton imports have been smaller than excess demand every year.
Ordinarily, a gap between net imports and excess demand would be made up
by drawing down stocks from earlier years. China's gap has persisted for
so long, and at such a high level, that it has become clear that
previous estimates of stocks were not sufficient to account for this
shortfall. Therefore, either the estimates of cotton production from
China's government were too low, or the widely accepted estimates of
cotton consumption in China were too high.

China's international demand for cotton has historically been both
volatile and crucial in global price determination. Given this, and the
ambiguity of the historical data for supply and demand, USDA has
traditionally sought to link its historical data estimates to official
data from China. In the interest of transparency, USDA has sought to
minimize its deviations from this official data even though this
necessitates the inclusion of an unexplained residual. Therefore,
production and consumption for China in these projections start from
China's official historical data.

Although the residual has grown significantly in recent years, the
absence of good information to explain the residual makes its future
movements uncertain. Thus, in the projections, the unexplained residual
is held constant throughout the coming decade. This methodology
simplifies an understanding of the projections. Further, it allows
readers who feel they have insights about future trends in the factors
causing the residual to easily adjust the USDA forecasts for alternative
assumptions. Hopefully, in the future, improved data and a better
understanding of China's cotton sector will prevail so there will no
longer be a need for either ad hoc adjustments or unexplained residuals.

(For further information see: MacDonald, Stephen, *China's Cotton Supply
and Demand: Issues and Impact on the World Market*, Outlook Report No.
CWS-07I-01, U.S. Department of Agriculture, Economic Research Service,
November 2007.)

> ![](media/image86.wmf){width="4.7in" height="2.997916666666667in"}

Globalization is expected to continue to move raw cotton production to
countries with favorable resource endowments and technology. Traditional
producers with large land bases suitable for cotton production continue
to benefit from post-MFA trade patterns. Such producer/exporter regions
include the United States, Sub-Saharan Africa, and Brazil. The
importance of technology has been highlighted by the impact of India's
rapid adoption of genetically modified cotton, nearly all *Bacillus
thuringiensis* (Bt) cotton.

-   The United States continues as the world's leading cotton exporter
    throughout the projections. Exports climb 16 percent to more than 19
    million bales by 2017/18.

-   The Central Asian countries of the former Soviet Union have been the
    principal U.S. competitors since the early 1990s. However,
    government policies in Central Asia promoting investment in textiles
    have resulted, to some extent, in exports of textile products rather
    than exports of raw cotton. Furthermore, the region's cotton
    production is expected to grow only slowly.

-   Sub-Saharan Africa's exports rose rapidly during the last decade in
    large part due to economic reforms. West Africa's 1994 currency
    devaluation led to nearly a decade of growth within the region's
    monetary union. As West Africa's production gains began to lag at
    the end of the 1990s, several southern African countries began
    increasing their cotton production, aided by reforms such as
    eliminating marketing board monopolies. Continued increases in
    output are expected as these economies develop and Bt cotton is
    adopted by the region's producers. The region's exports are
    projected to rise more than 50 percent during the next 10 years.

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```
-   Improved cotton yields in India, in part due to the adoption of Bt
    cotton, have raised India's output in recent years. Rapid yield
    growth is projected to continue as the area planted to Bt cotton
    expands rapidly. The increase in cotton output is expected to enable
    India to increase domestic textile production as well as
    significantly raise cotton exports. By 2009/10, India's cotton
    exports are projected to surpass those of Central Asia, making India
    the principal competitor to the United States in world markets.

> ![](media/image87.wmf){width="4.7in" height="2.997916666666667in"}

Growth rates of exports from major exporters of beef, pork, and poultry
meat average 1.1, 2.1, and 1.9 percent a year, respectively, between
2008 and 2017. During this period, exports rise 0.8 million tons for
beef, 1.0 million for pork, and 1.2 million for poultry. Rising per
capita incomes combined with population growth in a number of countries
are the driving forces behind the projected growth in global meat
demand.

-   Bovine spongiform encephalopathy (BSE) in Canada and the United
    States affected Canada's beef and live cattle exports to the United
    States in recent years. After falling in 2006 and 2007, Canadian
    beef exports are expected to recover once again in 2008, rising to a
    level just below their 2002 record. Additionally, recent changes in
    U.S. regulations, the projections assume Canadian cattle and beef
    from cattle over 30 months of age can be exported to the United
    States under the conditions that they are age-verifiable and born
    after March 1, 1999.

-   EU beef exports remain well below the annual WTO limit on subsidized
    exports (817,000 tons) as a stronger euro limits their
    competitiveness in international markets and policy changes lower
    both beef production and the need to remove beef from the domestic
    market.

-   Argentine beef exports rose sharply in 2004 and 2005. However,
    export taxes on beef and changes in other policies have made
    Argentina's exports less competitive. Beef production and exports
    are projected to decline and remain below their 2004 level.

-   The projections assume no changes in the set of countries
    recognizing Brazil as free of foot-and-mouth disease (FMD), thus
    limiting Brazilian pork's ability to compete in some markets.
    However, exports from Brazil's expanding pork sector are expected to
    be competitive in price-sensitive markets such as Russia and Asian
    countries other than Japan and South Korea.

-   Canada is projected to remain the world's third largest pork
    exporter.

-   During the coming decade, Brazil is expected to continue to be the
    largest exporter of poultry products, bolstered by low production
    costs and competitive export prices.

-   U.S poultry meat exports are projected to increase, due in part to a
    weak dollar that increases the competitiveness of U.S. exports.

-   Poultry exports from countries affected by avian influenza, such as
    Thailand and China, are expected to be mostly fully cooked products.

![](media/image88.wmf){width="4.7in" height="3.4in"}Beef imports by
major importers expand about 1.3 million tons (23 percent) between 2008
and 2017. Traditionally, developed countries were the primary importers
of beef. However, Brazil has become a large exporter of lower quality
beef that is imported by lower income countries. The projections assume
gradual recovery of U.S. and Canadian exports to Japan and South Korea.

-   Higher income countries, such as Japan and South Korea, increase
    beef imports, reflecting domestic cattle sectors that are
    constrained by land availability. These imports are primarily of
    grain-fed beef. U.S. beef exports to these countries are projected
    to rebuild over the next 10 years. Also, there continues to be a
    strong presence of Australia and New Zealand in these East Asian
    markets.

-   U.S. beef imports, primarily of grass-fed lean beef from Australia
    and New Zealand for use in ground beef and processed products, rise
    slightly through the period. Even with decreases in exports due to
    weather and land availability in the early part of the projection
    period, strong Asian imports of beef from Australia and New Zealand
    enable these countries to maintain significant levels of exports
    over the projection period.

-   Robust import growth of higher quality beef from the United States
    is projected for Mexico.

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```
-   The projections assume that Russia's tariff-rate quota (TRQ) for
    beef, first imposed in 2003, remains in effect until 2009. In the
    longer run, the growth in Russia's beef imports resumes as rising
    consumer demand outpaces gains in domestic production. Russia
    remains a large market for EU and Brazilian beef exports.

![](media/image89.wmf){width="4.7in" height="3.2993055555555557in"}

> The major pork importers are projected to increase trade by nearly 1
> million tons (24 percent) between 2008 and 2017.

-   Mexican pork imports increase more than 150,000 tons (38 percent)
    between 2008 and 2017, making Mexico one of the fastest growing pork
    importers. Increases in income and population are the primary
    drivers of Mexico's increasing demand for pork.

```{=html}
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```
-   Higher income parts of East Asia, such as Japan, Hong Kong, and
    South Korea, increase pork imports as their domestic hog sectors are
    constrained by environmental concerns. In South Korea and Japan,
    BSE-related concerns regarding beef also boost pork demand.

```{=html}
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```
-   As with beef, the projections assume the TRQ that Russia imposed for
    pork in 2003 remains in effect until 2009. Although the TRQ
    initially lowered pork imports, Russia remains a major destination
    for competitively priced pork exports from the EU and Brazil as
    demand growth continues to exceed Russian pork production gains. By
    2017, Russia is projected to import over 200,000 tons more pork than
    in 2008, a larger increase than any other country.

-   In China, increasing incomes boost per capita pork consumption and
    raise imports in the projections. However, China's pork production
    and exports also continue to rise.

![](media/image90.wmf){width="4.7in" height="3.1486111111111112in"}

Poultry meat imports by major importers are projected to increase by
about 1.0 million tons (18 percent) from 2008 to 2017.

-   Russia is expected to remain the world's largest poultry importer.
    Despite slow population growth, rising consumer income increases
    demand for poultry products. However, increased consumption is
    expected to be met by rising domestic production, so imports are not
    expected to change much during the coming decade.

-   In Mexico, economic growth raises poultry consumption and imports.
    Domestic poultry production continues to increase, but lags rising
    consumer demand.

-   China's rising consumption of poultry meat is met by expanding
    domestic production, while the country's poultry imports and exports
    each grow by more than 25 percent.

-   East Asia, a major importing region, is projected to import 20
    percent more poultry meat in 2017 than in 2008. Most of the increase
    is imported by South Korea.

-   Because of avian influenza, some major poultry-exporting countries
    such as Thailand and China have shifted most of their exports to
    fully cooked products. Due to their higher costs, these cooked
    poultry products will be marketed to developed or high-income
    countries in Asia, Europe, and the Middle East.

-   Poultry imports by Saudi Arabia and the Other North Africa and the
    Middle East region are projected to grow throughout the projection
    period. Animal disease issues in a number of countries is expected
    to slow growth in domestic production and increase demand for
    imports.

-   Rising consumer incomes increase poultry demand and imports in a
    number of Central America and Caribbean countries. Poultry products
    remain relatively less expensive than beef or pork, further
    stimulating demand. Together with Mexico, these countries form one
    of the largest markets for poultry imports.

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[]{#List_of_tables .anchor}**List of Tables**

Page

Table 1. U.S. macroeconomic assumptions [17](#t1)

Table 2. Global real GDP growth assumptions [18](#t2)

Table 3. Population growth assumptions [19](#t3)

Table 4. Summary policy variables for major field crops, 2005-2016
[33](#t4)

Table 5. Conservation Reserve Program acreage assumptions [33](#t5)

Table 6. Planted and harvested acreage for major field crops, long-term
projections [34](#t6)

Table 7. Selected supply, use, and price variables for major field
crops, long-term projections [35](#t7)

Table 8. U.S. corn long-term projections [36](#t8)

Table 9. U.S. sorghum long-term projections [37](#t9)

Table 10. U.S. barley long-term projections [38](#t10)

Table 11. U.S. oats long-term projections [39](#t11)

Table 12. U.S. wheat long-term projections [40](#t12)

Table 13. U.S. soybean and products long-term projections [41](#t13)

Table 14. U.S. rice long-term projections, rough basis [42](#t14)

Table 15. U.S. upland cotton long-term projections [43](#t15)

Table 16. U.S. sugar long-term projections [44](#t16)

Table 17. Horticultural crops long-term projections: Production, values,
and prices, calendar years [45](#t17)

Table 18. Horticultural crops long-term projections: Exports and
imports, fiscal years [46](#t18)

Table 19. Per capita meat consumption, retail weight [52](#t19)

Table 20. Consumer expenditures for meats [52](#t20)

Table 21. Beef long-term projections [53](#t21)

Table 22. Pork long-term projections [54](#t22)

Table 23. Young chicken long-term projections [54](#t23)

Table 24. Turkey long-term projections [55](#t24)

Table 25. Egg long-term projections [55](#t25)

Table 26. Dairy long-term projections [56](#t26)

Table 27. Farm receipts, expenses, and income, long-term projections
[62](#t27)

Table 28. Consumer food price indexes and food expenditures, long-term
projections [63](#t28)

Table 29. Changes in consumer food prices, long-term projections
[63](#t29)

Table 30. Summary of U.S. agricultural trade long-term projections,
fiscal years [64](#t30)

Table 31. Coarse grains trade long-term projections [94](#t31)

Table 32. Corn trade long-term projections [95](#t32)

Table 33. Sorghum trade long-term projections [96](#t33)

Table 34. Barley trade long-term projections [96](#t34)

Table 35. Wheat trade long-term projections [97](#t35)

Table 36. Soybean trade long-term projections [98](#t36)

Table 37. Soybean meal trade long-term projections [99](#t37)

Table 38. Soybean oil trade long-term projections [99](#t38)

Table 39. Rice trade long-term projections [100](#t39)

Table 40. All cotton trade long-term projections [101](#t40)

Table 41. Beef trade long-term projections [102](#t41)

Table 42. Pork trade long-term projections [102](#t42)

Table 43. Poultry trade long-term projections [103](#t43)