United States Department of Agriculture

Office of the Chief Economist
World Agricultural Outlook Board
Long-term Projections Report OCE-2007-1
February 2007 

# USDA Agricultural Projections to 2016

Interagency Agricultural Projections Committee World Agricultural Outlook Board, Chair Economic Research Service Farm Service Agency Foreign Agricultural Service Agricultural Marketing Service Office of the Chief Economist Office of Budget a nd Program Analysis Risk Management Agency Natural Resources Conservation Service Cooperative State Research, Education, and Extension

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# USDA Long-term Projections

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USDA Long-term Projections February 2007

i USDA Agricultural Projections to 2016. 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-2007-1, 110 pp.
Abstract This report provides projections for the agri cultural sector through 2016. Projections cover agricultural commodities, agricultural trade, and aggr egate 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 abnorma l weather, further outbreak s of plant or animal diseases, or other fact ors 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 sect or for the next decade. As such, the report provides a point of departure for discussion of al ternative farm sector outcomes that could result under different assumptions. The projections in this report were prepared in October through December 2006, reflecting a composite of model results and judgment-based analyses. Longrun developments for global agriculture reflect increased demand for bi ofuels, particularly in the United States and the Eu ropean Union (EU). U.S. agricu ltural projections reflect large increases in corn-based ethanol production, whic h 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. Additio nally, steady domestic and international economic growth in the projections supports gains in c onsumption, trade, and prices. Although export competition is projected to continue, global ec onomic growth, particularly in developing countries, provides a foundation for gains in wo rld trade and U.S. agricultural exports. Combined with increases in domestic demand, pa rticularly related to growth in ethanol production, the results are generally higher market prices and cash receipts. Rising production expenses and lower government payments offset some of the gains in cash receipts and other sources of farm income, but overall net farm inco me remains strong through the projections. On average, consumer food prices are projected to rise more slowly th an the general rate of inflation over the next decade, although increases in meat pri ces push food prices up faster in some years. Keywords: Projections, crops, livestock, ethanol, trade, farm income, food prices.

The United States Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin , age, disability, and, where applicable, sex, marital status, familial status, parent al status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individ ual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program in formation (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
To file a complaint of discrimination write to USDA , Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or ca ll (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.ii USDA Long-term Projections Contents Page A Note to Users of USDA Long-term Projections ........................................................................ iii Long-term Projections on the Internet .......................................................................................... . iv Contacts for Long-term Projections............................................................................................. .. iv Acknowledgments................................................................................................................ .......... iv
Introduction................................................................................................................... ...................1 Overview of Assumptions and Results............................................................................................ 2 Macroeconomic Assumptions...................................................................................................... ....9 Crops.......................................................................................................................... ....................20
Livestock...................................................................................................................... ..................51 U.S. Agricultural Sector Aggregate Indicators: Farm Income, Food Prices and Expenditures, and U.S. Trade Value ...............................62 Agricultural Trade............................................................................................................. .............71
List of Tables ................................................................................................................. ..............110

Features in this Report Page Economic Growth in Energy-Intensive Econom ies Underlies Oil Price Projections............... 16
U.S. Biofuel Overview .......................................................................................................... ... 22 Biofuel Tax Credits and Import Tariffs .................................................................................... 24
Livestock Sector Use of Distillers Grai ns, a Coproduct of Ethanol Production ...................... 52
Global Demand for Biofuel Feedstocks ................................................................................... 73USDA Long-term Projections iii A Note to Users of USDA Long-term Projections
USDA’s long-term agricultural projections presente d 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 abou t what would be expected to happen under a continuation of current farm legislation and specific a ssumptions about external conditions.
The report uses as a starting point the shor t-term projections from the November 2006 World Agricultural Supply and Demand Estimates report. Critical long-term assumptions are made for U.S. and international macroeconomic conditio ns, U.S. and foreign agricultural and trade policies, and growth rates of agricultural product ivity 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.
Historically, projections in prior years’ releases of th is report have been the same as those used in preparing the President’s Budget baseline. Howe ver, the President’s Budge t baseline this year assumes that biofuel blending tax credits and th e ethanol import tariff are not extended beyond their currently legislated expiration dates. The pr ojections in this report assume those tax credits and tariff are extended.
The projections analysis was conducted by in teragency 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 repor t. 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 Econom ic Research Service, the Farm Service Agency, the Foreign Agricultural Service, the Ag ricultural 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.iv USDA Long-term Pro j ections, Februar y 200 7 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 proj ections are available electronically at:
http://usda.mannlib.cornell.edu/MannU sda/viewDocumentInfo.do?documentID=1192

Contacts for Long-term Projections
Questions regarding these proj ections may be directed to:

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

Ronald Trostle, Economic Research Service, Room 5160, 1800 M Stre et, 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 Agricu ltural 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 Agricultura l Projections Committee, thank the many analysts in different agencies of USDA for their contributi ons to the long-term projections analysis and to the prepar ation and review of this report.USDA Long-term Projections, February 2007 1 

# USDA Agricultural Projections to 2016
Interagency Agricultural Projections Committee

Introduction

This report provides longrun projections for th e agricultural sector th rough 2016. Projections cover agricultural commodities, agricultural trade, a nd aggregate indicators of the sector, such as farm income and food prices. This report identifie s major forces and uncertainties affecting future agricultural markets; prospects for global long-term economic grow th, consumption, and trade; and future price trends, trade flows, and U. S. exports of major farm commodities.
The projections are a conditional scenario with no shocks and are based on specific assumptions regarding the macroeconomy, agricultural and tr ade 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, a nd the Agricultural Reconciliation Act of 2005 remain in effect through the projection period. The projections are not intended to be a Departmental forecast of what the future will be , but instead a description of what would be expected to happen under a continua tion 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 discussi on of alternative farm sector ou tcomes that could result under different domestic or international assumptions.
Historically, projections in prior ye ars’ releases of this report have been the same as those used in preparing the President’s Budget baseline. Howe ver, the President’s B udget baseline this year assumes that biofuel blending tax credits and th e ethanol import tariff are not extended beyond their currently legislated expiration dates. The pr ojections in this report assume those tax credits and tariff are extended. (See box, page 24, for furt her discussion and a comparison of selected results of these alternative scenarios.)
The projections in this report were prepared in October through December 2006 and reflect a composite of model results and judgment-based an alyses. Normal weather is assumed. Also, the projections assume no further outbr eaks of plant or animal diseases. Short-term projections used as a starting point in this report are from the November 2006 World Agricultural Supply and Demand Estimates report.2 USDA Long-term Pro j ections, Februar y 200 7 Overview of Assumptions and Results

Key assumptions underlying the projections include the following:
Economic growth

• World economic growth is projected to in crease at a 3.4-percent average annual rate between 2007 and 2016, after averaging 2.9 percent annually in 2001-06. U.S. gross domestic product (GDP) slows over the next several years from 3.4 percent in 2006 toward a sustainable rate of about 3 percent over th e longer term. Strong economic growth in developing countries of 5.6 percent a nnually is projected for 2007-16.
Population

• Growth in global population is assumed to cont inue to slow to an average of about 1.1 percent per year over the projec tion period compared with an annual rate of 1.7 percent in the 1980s. Although slowing, population growth ra tes 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 increas es to over 83 percent by 2016, up from 82 percent in 2005.
The value of the U.S. dollar

• The U.S. dollar remains relatively strong by hist orical standards, depr eciating slightly in 2008 and then continuing a long-term pattern of slow appreciation through the rest of the projection period. A strengthening U.S. dollar assumes that capital moves into the United States because of well-functioning and diverse financial markets and high expected long-term productivity growth.
Oil prices

• Large increases in oil prices over the past several years re flected strong demand for crude oil resulting from world economic recovery and rapid manufacturing growth in China and India. In 2007 through 2011, crude oil prices are expected to drop modestly and then rise by less than the inflation rate as new crude supplies help offs et the rise in demand from Asia. After 2011, oil prices are projected to rise slightly faster than the general inflation rate.

• Underlying these longer term pri ce increases, world oil demand is expected to rise due to strong global economic growth, pa rticularly in highly energy-d ependent 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 nonpetroleum fuels, the ability to increase energy efficiency by substituting nonenergy inputs for energy, and continued expansion and improve ment in renewable energy.USDA Long-term Projections, February 2007 3 U.S. agricultural policy

• The 2002 Farm Act, as amended, and the Ag ricultural Reconci liation Act of 2005 are assumed to continue through the projection period.

• Area enrolled in the Conservation Reserve Pr ogram (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 gra dually rise to its legislated maximum of 39.2 million acres by the end of the projecti ons, with higher CRP rental rates.
U.S. biofuels

• The Renewable Fuel Program of the Energy Policy Act of 2005 mandates that renewable fuel use in gasoline (with credits for biodies el) reach 7.5 billion gall ons by calendar year 2012. The legislation also contributed to the elimination of methyl tertiary butyl ether (MTBE) as a gasoline additive. The projecti ons in this report assume the tax credits available to blenders of biof uels (ethanol and biodiesel) and the ethanol import tariff remain in effect through the projection period. These factors, along with relatively high prices for oil, contribute to favorable returns for ethanol production, providing economic incentives for a continued strong expansion in the production capacity of that industry over the next several years, primarily produced from corn. As a result, over 12 billion gallons of ethanol are assumed to be produced annually in the United States by the end of the projections. Biodiesel producti on is assumed to increase to 700 million gallons in 2011/12 and then level off.
Cattle and beef trade

• The projections assume a gra dual rebuilding of U.S. beef exports to Japan and South Korea. Canada’s exports of liv e cattle to the United States are assumed to remain limited to steers and heifers under 30 months old fo r immediate slaughter and Canadian feeder cattle that enter U.S. feedlots and are sla ughtered before reaching 30 months of age.
International policy

• Trade projections assume that countries co mply with existing b ilateral and multilateral agreements affecting agriculture and agricultura l trade. The report incorporates effects of trade agreements and domestic policy re forms in place in November 2006.

• Domestic agricultural and trad e policies in individual forei gn countries are assumed to continue to evolve along th eir current path, based on the consensus judgment of USDA’s regional and commodity analysts. In partic ular, economic and trade reforms underway in many developing countries are assumed to continue.

• The European Union (EU) expanded from 25 to 27 countries with the accession of Romania and Bulgaria on January 1, 2007. EU pr ojections in this re port pertain to the EU-25. Romania and Bulgaria are incl uded in the Other Europe region, although adjustments were made to account for accession.4 USDA Long-term Pro j ections, Februar y 200 7 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 2016.

Key results in the projections include the following:
Steady domestic and international economic grow th in the projections supports gains in consumption, trade, and prices of agricultural products. Additionally, the projections reflect increased demand for biofuels, particular ly in the United States and the EU.
U.S. aggregate indicators

• Net farm income is projected to be relative ly strong during the proj ection period, averaging about $67 billion. Increases in corn-based et hanol production provide a major impetus for this strong income projection. Growth in expo rt demand also contribut es to increases in agricultural commodity prices and gains in fa rm cash receipts. Higher commodity prices lower government payments for price-depende nt benefits, although annual CRP payments increase. Rising production expenses and lowe r government payments offset some of the gains in cash receipts and other sources of farm income. With lower government payments, the agriculture sector relies increa singly on the market for its income. Cash receipts represent about 90 pe rcent of gross cash income dur ing most of the projection period, up from about 85 percent in 2005. Strong and stable net farm income assists in asset accumulation and debt management. The debt-to-asset ratio falls moderately in the projections, continuing a generally declining trend si nce the mid-1980s.

• The value of U.S. agricultural exports rise s in the projections as steady global economic growth and stronger world trade lead to gains for U.S. agricu ltural export volumes and higher commodity prices. Higher commodity prices du e to expansion of global biofuel demand also contribute to the gains in export values. Increases in U.S. consumer income and demand for a large variety of foods underlie growth in U.S. agricultural imports.

• On average, consumer food prices are projected to rise more sl owly than the general rate of inflation over the next decade, although increa ses in meat prices push food prices up faster in some years. 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.
Commodity price relationships

• During the next 3-4 years, rapid expansion in global production of biofuels changes the price relationships among various agricultura l commodities. Increased demand for grain (especially corn) used to produce ethanol in the United States raises the price of cornUSDA Long-term Projections, February 2007 5 relative to prices for other gr ains and soybeans, although prices for those crops also rise, buoyed by acreage adjustments and production cha nges and/or by their feed value as a replacement for corn.

• Expansion of biodiesel production globally results in prices fo r vegetable oils rising in comparison to prices for oilseeds and protein me als as more of the crush value of oilseeds derives from the oil. As a consequence, prices of protein feeds (such as soybean meal) rise relatively less than prices of feedstuffs used pr imarily as a source of energy (such as corn).

• Prices of poultry and pork in the United Stat es rise relative to the price of beef because cattle can more effectively use the increasing su pply of distillers gr ains, a coproduct of dry mill ethanol production. Corn, needed for bro ilers and swine, becomes more expensive while distillers grains, used for cattle, become more abundant and relatively less expensive.
U.S. agricultural commodities

• Strong expansion of corn-based ethanol produc tion in the United Stat es affects virtually every aspect of the field crops sector, ranging from domestic demand and exports to prices and the allocation of acreage among crops. Ov erall plantings expand and a higher portion of the total is planted to cor n. Higher feed costs and the incr eased availability of distillers grains also affect the livestock sector.

• Corn used to produce ethanol in the United States continues strong expansion through 2009/10, with slower growth in subsequent year s. By the end of th e projections, ethanol production exceeds 12 billion gallons per year, usi ng more than 4.3 billion bushels of corn. The projected large increase in ethanol pr oduction reflects the Ener gy Policy Act of 2005, the elimination of use of MT BE as a gasoline additive, ongoing ethanol plant construction, and economic incentives provided by continued hi gh 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, partic ularly for beef cattle.

• Growth in the food use of wheat is projected to be somewhat slower than the rate of population increases, reflecting dietary adjustment s by some consumers. Feed use of wheat rises sharply in the initial years of the projec tions as higher corn pric es encourage increases in wheat feeding, particularly in the summer quarter. As corn prices fall, wheat feeding declines after 2010/11 due to relatively higher wheat pri ces compared with corn.

• Soybean acreage falls in the proj ections as more favorable re turns to corn production draw land from soybeans. 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 through 2011/12.

• 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 produ ction and lowering the apparel industry’s demand for fabric and yarn produced in the United States.6 USDA Long-term Pro j ections, Februar y 200 7 • Slow expansion of domestic food use of rice is projected. Growth is only slightly faster than population growth, well below the rates of growth in the 1980s and 1990s when per capita use rose rapidly.

• The sugar projections assume the elimination of Mexico’s soft drink and distribution taxes, resulting in higher levels of us e of high fructose corn syrup by Mexico’s beverage industry and higher exports of sugar from Mexico to the United States.

• The tobacco sector continues to adjust to the ending of the U.S. tobacco marketing quota and price support program. After declining in 2005 when nearly half of tobacco producers exited the industry, tobacco leaf production increases in the projections as many remaining growers expand operations. Dec lining cigarette consumption in the United States is an important factor underlying projected decreases in domestic use of tobacco leaf. Exports of tobacco leaf are projected to increase moderately.

• The production value of U.S. horticultural cr ops is projected to grow by 2.5 percent annually over the next decade. Consumption of horticultural products continues to rise in the projections. Imports play an important ro le in domestic supply during the winter and, increasingly, during other times of the year, pr oviding U.S. consumers with a larger variety of horticultura l products.

• Production of all meats slows or declines in the first half of the projections, reflecting higher feed costs and lower pr oducer returns as more corn is used in the production of ethanol. After those productions adjust ments, strong domestic demand and some strengthening in meat exports result in higher prices and highe r returns, providing economic incentives for expansion in the sector . How the sector adjusts to the increased availability of distillers grai ns will also be important.

• Per capita meat consumption declines in the first half of the projections as the sector lowers overall production, but then rebounds somewhat in subsequent years. Rising incomes facilitate gains in consumer spending on meat . Nonetheless, overall meat expenditures represent a declini ng proportion of disposable income.

• Productivity gains are expected to boost milk output per co w and total milk production, although some slowing in these increases occurs early in the projection period due to higher feed costs. Milk cow numbers are ex pected to decline afte r 2006, particularly in 2008-10 as feed costs rise.
Agricultural trade

• Population and income are two important factors underlying global demand for food and agricultural products, world trad e, and U.S exports. With population growth in the world continuing to slow in the projections compar ed with previous decades, income growth becomes a relatively more important factor underlying strengthening food and agricultural demand. Economic growth in developing count ries is especially important because consumption of food and feed are particular ly responsive to income growth in those countries, with movement away from staple f oods and increased diversification of diets.USDA Long-term Projections, February 2007 7 • Increases in global demand for food and agri cultural products provi de the foundation for gains in agricultural trade and U.S. exports. The United States will remain competitive in global agricultural markets, a lthough 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. A strengthening U.S. dollar assumed in the projections also is a constraining factor for U.S. agricultural competitivene ss and export growth in the longer run. Nonetheless, increases in exports contribute to gains in cash receipts for U.S. farmers.

• Steady longrun growth in the livestock sect ors 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 increa sing use of corn for U.S. ethanol production, particularly over the next seve ral years, U.S. corn exports show very little growth through 2010/11 and prices rise. In re sponse, increased corn producti on and exports are assumed for Argentina, Bulgaria, Romania, Ukraine, Repu blic of South Africa, and Brazil. China is also assumed to increase corn production, whic h 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 relative to prices fo r oilseeds and protein meals because of expanding biodiesel production in a number of countries. This relatively new source of oilseed products demand amplifies already rising uses of vege table oils for food consumption and protein meals for livestock production in developing countries, resulting from strong income and population growth. 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 soyb ean oil, reflecting th e country’s large and growing crush capacity, its small domestic mark et for soybean products, and an export tax structure that favors exports of soybean products rather than soybeans. The former Soviet Union, Eastern Europe, and Southeast Asia incr ease rapeseed and palm oil production for use as biodiesel feedstocks.

• The United States, Australia, the EU, Canada, and Argentina have hi storically been the primary exporters of wheat, although exports fr om 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, hi gh year-to-year volatility in these countries’ production and trade can be exp ected due to weather extremes and related yield variation.

• 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 Chin a’s cotton imports are expected to grow more slowly than the rapid gains since 2001, th ese increases account fo r the gains in global cotton trade in the projections. The United Stat es continues as the world’s leading cotton exporter, reflecting its large production capacity and its reduced domestic mill use of cotton as textile imports continue to grow.8 USDA Long-term Pro j ections, Februar y 200 7 • Long-grain varieties of rice ac count for around three-fourths of global rice trade and are expected to account for the bulk of trade grow th over the next decade. Long-grain rice is imported by a broad spectrum of countries in South and Southeast Asia, much of the Middle East, nearly all of Sub-Saharan Afri ca, and most of Latin America. Thailand, Vietnam, India, and the United States remain the world’s largest rice -exporting countries.

• U.S. meat exports benefit from strong forei gn economic growth. Although U.S. beef exports to Japan and South Korea are projected to grad ually rebuild, total U.S. beef exports do not return to the levels attained prior to the first U.S. case of bovine spongiform encephalopathy (BSE) in December 2003.

• Mexican pork imports rise rapidly, driven by increases in income and population. Higher income countries of East Asia increase por k imports as their dome stic hog sectors are constrained by environmental concerns and high imported feed costs. Brazil continues to be a major pork exporter, although the presence of foot-and-mouth disease in Brazil limits Brazilian pork exports to some markets.

• Avian influenza is assumed to not significantl y affect overall consumer demand for poultry. However, poultry exports from c ountries affected by the disease, such as Thailand and China, are expected to be limited to fully cooked pr oducts. Brazil remains a leading poultry exporter as low production costs allow the Brazilian poultr y sector to remain competitive in global trade.USDA Long-term Projections, February 2007 9 

### Macroeconomic Assumptions

Macroeconomic assumptions underl ying USDA’s long-term projections reflect steady growth at near-average historical rates over most of the projection period. Mo st of the world will be moving toward longrun sustainable economic growth, with trend rates in 2008 and beyond. Overall, world economic growth is projected to increase at a 3.4-percent average rate between 2007 and 2016, after averaging below 3 percent annually between 2001 and 2006. The projections have moderating growth in developed countries and accelerating growth in developing and former Soviet Union countries. Ongoing computing and telecommunications advan ces support worldwide productivity gains thro ughout the projections.
U.S. gross domestic product (GDP) growth slows over the next several years from 3.4 percent in 2006 toward a sustainable rate of about 3 percent over the longer term. Nonetheless, the United States continues to maintain its share of global GDP at around 30 pe rcent. While the United States plays a large role in determining economic c onditions around the world, strong growth in China and in India are becoming increasingly important.
Improved global economic performance and con tinuing, although slowing, population growth are expected to boost food demand in the projectio ns. Increased global purchasing power and population growth, competing against demand for bi ofuels and other domestic uses, are important factors shaping the projections for U.S. agricultural exports.

-1 0 1 2 3 4 5

1990 1995 2000 2005 2010 2015 U.S. and world gross domestic product (GDP) growth

Percent

World United States10 USDA Long-term Pro j ections, Februar y 200 7 -2 -1 0 1 2 3 4 5 6

1990 1995 2000 2005 2010 2015 GDP growth for developed countries, European Union-25, and Japan

Percent

Developed countries

Japan European Union-25

Developed economies are projected to grow at rates similar to those of the 1990s, averaging around 2.5 percent in 2007-16. European and Japane se growth increases from recent levels, but remains around 2 percent per year in the projection period.

• Enlargement of the European Union (EU) to in clude more countries of Central and Eastern Europe creates additional trade and investme nt opportunities within the expanded EU. The EU economy, however, does not grow as rapidl y as the U.S. economy because of lingering EU structural rigidities, partic ularly rigid labor laws and a ve ry expensive social security system. Political difficulties also constr ain the benefits of economic integration, particularly with continued re strictions on labor mobility betw een EU countries and a very cumbersome EU decisionmaking process.

• Japan continues to face constraints to econom ic growth, largely the result of long-term structural rigidities, a difficu lt political process of economi c reform, and a rapidly aging population. Japan’s labor market liberalization partly offset s these constraints, aiding productivity growth. The projections assume sustained economic growth in Japan at 2 percent a year, with the country’s share of world GDP declining to around 12 percent by 2016, down from almost 18 percent in 1991.USDA Long-term Projections, February 2007 11 -15 -12

-9 -6 -3 0 3 6 9

1990 1995 2000 2005 2010 2015 GDP growth for developing economies and the former Soviet Union

Percent Developing Asia

Former Soviet Union Latin America Africa

Economic growth in developing countries is projected to average 5.6 percent annually in 2007-16. Developing countries will play an increasingly im portant 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 in clude more meat, fruits, vegetables, and processed foods (including vegetable oils). These consumpti on shifts increase import demand for feedstuffs and high-value food products.

• Long-term growth of 3.9 percent is projected for Latin America. An overall improvement in macroeconomic policies should attract foreign capital inflows, particularly foreign direct investment, and sustain growth.

• Projected growth for Southeast Asia exceeds 5 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 1971-2006.

• China’s economic growth has been consistently the strongest in Asia, exceeding 10 percent between 2003 and 2006. While some slowing is expected, China’s growth is expected to average above 8 percent over the next decade, despite problems with the structure of the banking system.

• India’s projected average economic growth of around 7 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 around $600 in 2006. Continued high income growth is expected to bring India’s real per capita income to more than $1,000 by 2016 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 almost 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 the other oil-rich FSU countries also benefit from high oil prices.12 USDA Long-term Pro j ections, Februar y 200 7 0 1 2 3 1980-89 1990-99 2000-06 2007-16 Population growth 1/

Percent

1/ Population projections from the U.S. Department of Commerce, Census Bureau.

World

Developed United States Developing

Former Soviet Union Africa Middle East

Asia Latin America

A continued slowing of population growth aroun d 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 percen t in the 1980s to an av erage of about 1.1 perc ent per year for the projection period.

• Developed and FSU countries have very low projected rates of popul ation growth, at 0.4 percent and 0.1 percent, respec tively. The projected annual average population growth rate for the United States is the highest among de veloped countries, at 0.9 percent, in part reflecting large immigration. Population grow th rates in developi ng 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 83 percent by 2016.

• 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 2007-16. The population growth rate in India, the world’s second most populous nation, is projected to decline from 2.1 percent to 1.3 percent per year between the same periods. This 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 0.9 percent annually in 2007-16. Sub-Sahara n Africa’s population growth rate declines from 2.9 percent to 2.2 percent per year over the same period, leav ing this impoverished region with the highest population growth ra tes in the world, on average.

• There are a number of countries with declin ing 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 declini ng populations resulting from the devastating impacts of the AIDS epidemic, including the Republic of South Africa, Botswana, Lesotho, and Swaziland.USDA Long-term Projections, February 2007 13 60 70 80 90 100 110 120

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 U.S. agricultural trade-weighted dollar projected to strengthen 1/ Index values, 2000=100

1/ Real U.S. agricultural trade-weighted dollar exchange rate, using U.S. agricultural export weights.

The U.S. dollar remains relatively strong in the projections by historical standards, depreciating slightly in 2008 and then continuing a long-term pattern of slow real ap preciation. The relatively high real exchange rate—expressed in this report as local currency per U.S. dollar, in inflationadjusted terms—will be a constrai ning factor on the growth in U.S. exports. Nonetheless, strong long-term economic growth, particul arly in developing countries, will result in an overall increase in the demand for U.S. farm exports.

• Strong GDP growth in the United States relativ e to the EU and Japan strengthens the dollar relative to the euro and offs ets much of the trade-driv en appreciation of the yen.

• The U.S. dollar stays strong because capital moves into the United States to benefit from well-functioning and diverse financial mark ets, a relatively risk-free environment, transparent financial accounting standards, and high expected long-term productivity growth and corporate profitabil ity. The dollar also stays high because developing countries that pursue export-led economic growth strategies often use fi scal and monetary policies that tend to produce depreciating currencies.

• Among agricultural products, U.S. exports of bulk commodities and horticultural products tend to be the most sensitive to a strong U.S. dollar, because they face relatively more global trade competition.

• China initiated a process for appreciating it s currency in 2005 after a long period of an undervalued exchange rate and substantial politic al pressure from its trading partners. To date, the appreciation has been limited to 5-6 pe rcent. This compares with most estimates of undervaluation of at least 30 to 40 percent. The projections assume that China allows its real exchange rate to slowly appreciate. The appreciation of the yuan also leads to appreciation in other Asian currencies.14 USDA Long-term Pro j ections, Februar y 200 7 0 10 20 30

Wo r ld Devel o p ed

United S t a tes F S

U Developing Asia

L a t i n Am

er

ic

a Middl e Ea s t Africa 1980-89 1990-99 2000-06 2007-16 Inflation rates

Percent

Global inflation rates are projected to remain relatively low through 2016.

• The U.S. and world economies are moving in to a steady growth phase of the business cycle. Some inflationary pressures have be gun as a result of energy price increases and the movement towards full employment and full cap acity utilization. In response, the U.S. Federal Reserve Board and central banks in other countries have increased short-term interest rates aggressively to constrain inflation, and are assu med to continue such policies in the projection period.

• While inflation in the United States and th e world exceeded 3 percent in 2005 and 2006, a modest reduction in inflation is assumed in the projections. U.S. inflation as measured by the Consumer Price Index is projected at about 2.5 percent, while global inflation is around 3 percent.

• Inflation rates in developing countries are projected to fall from 7 percent to under 5 percent. Inflation in Asia declines to rate s comparable to those in developed countries. Rates in Latin America, Africa, and the Middle East, while declining, will remain substantially above inflation ra tes in the rest of the world.

• In the FSU, inflation rates come down from the high transition rates of the 1990s to an average projected to be below 5 percent.

• Relatively low inflation rates will keep nominal interest rates from moving to the high levels seen in the 1980s. However, as wo rld economies grow more rapidly, demand for credit will rise and further boos t interest rates over the longe r term. In addition, long-term U.S. interest rates rise in the short run to c ontinue financing the curr ent account deficit.USDA Long-term Projections, February 2007 15 0 10 20 30 40 50 60 70 80

1990 1995 2000 2005 2010 2015 Crude oil prices
Dollars per barrel

Refiners' acquisition cost, crude oil imports

Refiners' acquisition cost, adjusted for inflation

Crude oil prices rose sharply from late 2002 th rough 2006, largely reflecting increased crude oil demand due to a robust world economic recovery and rapid manufacturing growth in China and India. In 2007 through 2011, crude o il prices are expected to drop m odestly and then rise less than the inflation rate as new crude supplies help offset the rise in demand from Asia. After 2011, oil prices are projected to rise sligh tly faster than the general inflation rate, reflecting rising world oil demand, due to strong global economic growth, part icularly in highly en ergy-dependent economies in Asia (see box, page 16).
Partly offsetting those effects, factors expected to constrain longrun increases in oil prices include:

• The ability to switch to nonpetroleum fuels, such as coal and natural gas, especially in industrial uses and elect ric power generation;

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

• Continued expansion and improvement in re newable energy, such as wind and water power, thermal energy, solar power, and biofuels;

• Continued extraction of fossil fuels from unconv entional sources such as oil shale and tar sands; and

• New oil discoveries, along with new tec hnologies for finding and extracting oil. Oil prices have historically affect ed 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 dere gulation throughout the na tural gas supply and demand system. At the same time, fertilizer im ports 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 becau se natural gas is less transportabl e 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 St ates and other natural gas importers develop the capacity to import more liquefied natural gas.16 USDA Long-term Pro j ections, Februar y 200 7 Economic Growth in Energy-Intensive Ec onomies Underlies Oil Price Projections
Strong economic growth in highl y energy-dependent economies in Asia, including China, India, and other rapidly growing Asian economies, is a major factor pus hing oil prices higher in the projections. Reductions in energy intensity in these economies are expected, however. Most of China’s energy is from coal, but as c onsumer incomes and automobile demand grow, an increasing share of its energy use will be petroleum. China has be come increasingly efficient in energy use over the past 25 years, reducing its energy intensity by over 50 percent since the 1980s (based on a measure of energy used to produce a dollar’s worth of GDP, from the Department of Energy’s Energy Information Administration). None theless, even with this improvement, China’s energy intensity is over four times as high as that of the United States. China’s energy intensity is expected to decline further w ith the adoption of more energy -efficient manufacturing technology and rapid growth of the less-en ergy-intensive service sector. The energy intensity of India’s economy rose in the 1980s, but has fallen more than 15 percent since the early 1990s. Although less energy-intensive than China’s economy, India uses more than two and a half times as much energy as the Unite d States to produce a dollar’s worth of GDP. As India continues to develop its in frastructure, especially the hi ghway system and electric power grid, energy intensity is expected to rise. The rapidly growing and newly i ndustrialized East and Southeas t Asian economies of Taiwan, South Korea, Malaysia, Hong Kong, Singapore, and Thailand have become more energy-intensive since the 1980s. Energy used to produce a dollar of GDP has ri sen by about 15 percent compared with the 1980s, and is now about 50 percent more than in the United States. Taiwan and South Korea have been leaders in developing Asia in re ducing their energy intensit y. Reductions in their energy intensity are expected as more effici ent manufacturing technology is adopted and their service sectors continue to grow rapidly.USDA Long-term Projections, February 2007 17 Table 1. U.S. macroeconomic assumptions Item 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

GDP, billion dollars Nominal 12,456 13,279 13,992 14,729 15,519 16,352 17,213 18,120 19,074 20,078 21,115 22,206 Real 2006 chained dollars 11,049 11,424 11,756 12,096 12,471 12,858 13,244 13,641 14,050 14,472 14,892 15,323 percent change 3.2 3.4 2.9 2.9 3.1 3.1 3.0 3.0 3.0 3.0 2.9 2.9

Disposable personal income Nominal (billions) 9,036 9,560 10,110 10,681 11,269 11,888 12,542 13,232 13,960 14,728 15,538 16,392 percent change 5.8 5.8 5.8 5.7 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 Nominal per capita, dollars 30,457 31,934 33,468 35,047 36,652 38,334 40,097 41,942 43,874 45,896 48,016 50,237 percent change 3.1 4.9 4.8 4.7 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 Real (billion 2000 chained) 8,105 8,308 8,573 8,848 9,122 9,405 9,696 9,997 10,307 10,626 10,956 11,295 percent change 1.2 2.5 3.2 3.2 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 Real per capita, 2000 dollars 27,319 27,750 28,382 29,031 29,670 30,326 30,999 31,688 32,393 33,116 33,857 34,617 percent change 0.2 1.6 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2
Consumer spending Real (billion 2000 chained) 7,841 8,069 8,319 8,560 8,808 9,064 9,326 9,597 9,875 10,162 10,446 10,739 percent change 3.5 2.9 3.1 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.8 2.8

Inflation measures GDP price index, chained 112.7 116.2 119.0 121.8 124.4 127.2 130.0 132.8 135.8 138.7 141.8 144.9 percent change 3.0 3.1 2.4 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 CPI-U, 1982-84=100 195.3 202.1 207.6 213.0 218.3 223.7 229.3 235.1 240.9 247.0 253.1 259.5 percent change 3.4 3.5 2.7 2.6 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 PPI, finished goods 1982=100 155.7 161.0 164.7 167.4 169.7 172.1 174.5 176.9 179.4 181.9 184.5 187.0 percent change 4.9 3.4 2.3 1.6 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4 PPI, crude goods 1982=100 182.2 183.3 184.0 184.6 186.4 188.3 190.2 192.1 194.0 196.0 197.9 199.9 percent change 14.6 0.6 0.4 0.3 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Crude oil price, $/barrel Refiner acq. cost, imports 48.9 59.0 57.7 57.5 58.0 59.0 60.0 62.4 64.9 67.6 70.3 73.1 percent change 36.0 20.5 -2.2 -0.3 0.9 1.7 1.7 4.0 4.0 4.0 4.0 4.0 Real 2000 chained dollars 43.4 50.7 48.5 47.2 46.6 46.4 46.2 47.0 47.8 48.7 49.6 50.5 percent change 32.0 16.9 -4.5 -2.5 -1.3 -0.5 -0.5 1.8 1.8 1.8 1.8 1.8

Labor compensation per hour nonfarm business, 92=100 162.7 170.5 177.7 183.7 190.0 196.4 203.1 210.0 217.1 224.5 232.2 240.1 percent change 4.4 4.8 4.2 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4

Interest rates, percent 3-month T-bills 3.2 4.7 5.1 5.5 5.5 5.6 5.6 5.6 5.6 5.6 5.6 5.6 3-month commercial paper 3.4 5.1 5.4 5.8 5.9 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Bank prime rate 6.2 8.0 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 Treasury bonds (10-year) 4.3 4.9 5.5 5.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Moody's Aaa bonds 5.2 5.7 6.4 6.4 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5

Civilian unemployment rate, percent 5.1 4.7 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 4.8 Nonfarm payroll emp., millions 133.5 135.3 137.1 138.6 140.1 141.5 142.9 144.4 145.8 147.3 148.7 150.2 percent change 1.5 1.4 1.3 1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Total population, million 296.7 299.4 302.1 304.8 307.4 310.1 312.8 315.5 318.2 320.9 323.6 326.3 percent change 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.8 0.8 Domestic macroeconomic assumptions were completed in October 2006.18 USDA Long-term Pro j ections, Februar y 200 7 Table 2. Global real GDP growth assumptions

2005 2006 2007 2008 2009 2010 1991-2000 2001-2006 2007-2016 Percent Percent change World 100.0 5,786 3.6 3.8 3.5 3.5 3.5 3.4 2.8 2.9 3.4 less United States 69.3 4,209 3.7 4.0 3.7 3.7 3.6 3.5 2.7 3.0 3.6

North America 32.9 37,388 3.3 3.4 2.9 2.9 3.1 3.1 3.3 2.6 3.0

Canada 2.3 25,731 4.6 3.2 2.8 2.9 2.9 2.9 3.1 3.0 2.9 United States 30.7 38,681 3.2 3.4 2.9 2.9 3.1 3.1 3.3 2.6 3.0

Latin America 6.3 4,293 4.5 4.6 4.2 4.0 4.0 3.9 3.5 2.8 3.9

Caribbean & Central America 0.6 3,090 2.9 3.8 3.5 3.8 4.0 4.0 4.0 3.0 3.8 Mexico 1.8 6,215 3.8 3.9 3.8 3.6 3.5 3.5 3.7 2.4 3.5 South America 3.9 4,007 5.1 5.0 4.5 4.2 4.2 4.1 3.3 2.9 4.0

Argentina 0.8 8,403 9.2 7.0 5.9 5.1 4.8 4.7 4.7 3.1 4.7 Brazil 1.9 3,690 2.3 3.5 4.0 4.0 4.0 3.8 2.8 2.4 3.7 Other 1.2 3,222 6.7 5.7 4.4 3.9 4.0 4.2 3.2 3.7 4.1

Europe 27.3 18,699 1.8 2.4 2.2 2.3 2.3 2.2 2.1 1.8 2.2

European Union-25 25.7 20,201 1.7 2.4 2.2 2.3 2.3 2.2 2.2 1.8 2.2 Other Europe 1.6 8,601 2.7 3.2 2.5 2.5 2.5 2.3 1.4 2.3 2.3

Former Soviet Union 1.3 1,860 6.9 6.5 6.0 5.3 4.9 4.7 -4.1 6.7 4.7

Russia 0.9 2,594 6.4 6.0 5.2 4.5 4.1 4.0 -3.6 6.1 4.2 Ukraine 0.1 997 2.6 3.0 5.0 6.0 6.0 5.5 -7.7 6.9 4.9 Other 0.2 1,148 11.0 10.0 9.1 7.8 7.3 6.9 -3.6 9.1 6.5

Asia and Oceania 27.7 2,952 4.8 5.1 4.7 4.6 4.5 4.4 3.3 3.9 4.5

East Asia 22.2 5,538 4.6 5.0 4.5 4.4 4.2 4.1 3.0 3.6 4.3

China 4.6 1,579 10.1 9.9 9.8 9.8 8.7 8.0 10.5 9.6 8.4 Hong Kong 0.5 31,071 7.3 6.4 6.0 5.6 5.5 5.3 4.5 4.6 5.2 Japan 14.3 40,906 2.6 3.0 2.3 2.0 2.0 2.0 1.4 1.6 2.0 Korea 1.7 13,767 4.0 5.5 5.3 5.3 5.2 5.0 6.0 4.7 5.0 Taiwan 1.0 16,369 5.3 5.3 3.8 4.0 4.1 4.2 6.4 3.5 4.1 Southeast Asia 2.0 1,363 5.6 5.5 5.5 5.4 5.4 5.3 5.2 4.8 5.2

Indonesia 0.6 891 5.6 5.0 6.0 5.9 5.8 5.7 4.4 4.8 5.8 Malaysia 0.3 4,858 5.2 5.5 5.6 5.6 5.7 5.7 7.2 4.6 5.4 Philippines 0.3 1,091 5.0 5.0 4.3 4.3 4.3 4.3 3.1 4.3 4.3 Thailand 0.4 2,547 4.5 5.0 5.2 5.3 5.5 5.1 4.6 5.0 5.2 Vietnam 0.1 572 8.4 8.0 7.2 7.1 7.3 7.2 7.4 7.6 7.0 South Asia 2.1 584 8.1 7.6 7.0 6.7 6.6 6.4 5.2 6.5 6.5

Bangladesh 0.2 426 5.4 6.5 5.9 5.7 5.6 5.3 4.8 5.5 5.3 India 1.6 621 8.4 8.0 7.3 7.0 7.0 6.9 5.5 6.9 7.0 Pakistan 0.2 600 8.4 6.6 6.1 5.5 4.9 4.1 4.0 5.2 4.3 Oceania 1.5 15,943 2.5 3.0 3.0 3.2 3.4 3.4 3.5 3.3 3.3

Australia 1.3 23,163 2.5 3.1 3.1 3.2 3.4 3.4 3.6 3.2 3.4 New Zealand 0.2 15,639 1.9 2.4 2.6 2.8 3.1 3.0 2.9 3.4 2.8 Other Asia and Oceania 0.1 1,070 6.2 6.1 5.1 4.8 4.6 4.4 6.1 4.1 4.4

Middle East 2.6 3,912 6.4 5.3 4.9 4.7 4.5 4.5 4.0 4.3 4.4

Iran 0.4 2,029 5.6 4.5 4.6 4.5 4.4 4.4 4.0 5.5 4.3 Iraq 0.1 944 17.0 12.8 11.7 9.2 7.5 6.1 9.5 3.4 6.3 Saudi Arabia 0.6 8,972 6.6 5.8 5.6 4.9 4.3 4.2 2.6 4.3 4.3 Turkey 0.6 3,659 7.4 4.6 4.6 4.6 4.6 5.3 3.6 4.5 4.9 Other 1.0 5,092 5.5 5.1 4.4 4.4 4.3 4.1 4.9 4.2 4.0

Africa 1.9 842 4.9 5.8 5.5 5.3 5.2 5.1 3.0 4.5 5.0

North Africa 0.8 1,965 4.2 5.8 5.4 5.2 5.1 5.0 3.9 4.5 4.8

Algeria 0.2 2,179 5.1 6.4 6.4 6.4 6.0 6.0 1.7 5.0 5.4 Egypt 0.3 1,639 4.9 5.1 5.1 5.0 5.0 4.9 4.5 4.0 4.5 Morocco 0.1 1,296 3.5 6.7 5.2 4.7 4.5 4.4 8.4 5.3 5.0 Tunisia 0.1 2,515 1.5 5.5 4.5 4.1 4.0 4.0 2.4 4.4 4.1 Sub-Saharan Africa 1.1 593 5.5 5.8 5.7 5.4 5.3 5.2 2.4 4.5 5.1

Republic of South Africa 0.4 3,747 4.9 4.7 4.5 4.6 4.9 5.2 1.8 3.7 5.1 Other Sub-Saharan Africa 0.7 406 5.8 6.5 6.4 5.8 5.5 5.2 2.8 5.0 5.1 Average Share of world GDP 2001-2005 Region/country

International macroeconomic assumptions were completed in October 2006. Per capita income,

2006USDA Long-term Projections, February 2007 19 Table 3. Population growth assumptions

2005 2006 2007 2008 2009 2010 1991-2000 2001-2006 2007-2016 Millions Percent change World 1 6,528 1.2 1.2 1.1 1.1 1.1 1.1 1.4 1.2 1.1 less United States 6,230 1.2 1.2 1.2 1.1 1.1 1.1 1.4 1.2 1.1

North America 332 0.9 0.9 0.9 0.9 0.9 0.9 1.2 0.9 0.9

Canada 33 0.9 0.9 0.9 0.9 0.9 0.8 1.2 0.9 0.8 United States 298 0.9 0.9 0.9 0.9 0.9 0.9 1.2 0.9 0.9

Latin America 562 1.2 1.2 1.2 1.2 1.1 1.1 1.6 1.3 1.1

Caribbean & Central America 79 1.6 1.5 1.5 1.5 1.5 1.5 1.8 1.6 1.4 Mexico 107 1.2 1.2 1.2 1.2 1.1 1.1 1.6 1.2 1.1 South America 376 1.2 1.2 1.2 1.1 1.1 1.1 1.6 1.3 1.0

Argentina 40 1.0 1.0 1.0 0.9 0.9 0.9 1.3 1.0 0.8 Brazil 188 1.1 1.1 1.0 1.0 1.0 0.9 1.5 1.2 0.9 Other 148 1.4 1.4 1.4 1.3 1.3 1.3 1.9 1.5 1.2

Europe 526 0.2 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.1

European Union-25 458 0.2 0.1 0.1 0.1 0.1 0.1 0.3 0.2 0.1 Other Europe 68 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.1 0.0

Former Soviet Union 278 0.0 0.0 0.0 0.1 0.1 0.1 0.0 -0.1 0.1

Russia 142 -0.4 -0.4 -0.4 -0.4 -0.4 -0.4 -0.1 -0.4 -0.4 Ukraine 47 -0.7 -0.6 -0.6 -0.6 -0.6 -0.6 -0.5 -0.8 -0.6 Other 90 0.9 0.9 1.0 1.0 1.1 1.1 0.6 0.9 1.1

Asia and Oceania 3,655 1.1 1.1 1.1 1.1 1.1 1.1 1.4 1.1 1.0

East Asia 1,547 0.5 0.5 0.5 0.6 0.6 0.6 0.9 0.6 0.6

China 1,314 0.6 0.6 0.6 0.6 0.6 0.7 1.0 0.6 0.6 Hong Kong 7 0.6 0.6 0.6 0.5 0.5 0.5 1.6 0.7 0.4 Japan 127 0.1 0.0 0.0 0.0 -0.1 -0.1 0.3 0.1 -0.2 Korea 49 0.4 0.4 0.4 0.4 0.4 0.3 1.0 0.5 0.3 Taiwan 23 0.6 0.6 0.6 0.6 0.6 0.5 0.9 0.7 0.5 Southeast Asia 567 1.4 1.3 1.3 1.3 1.3 1.2 1.7 1.4 1.2

Indonesia 232 1.5 1.4 1.4 1.4 1.3 1.3 1.8 1.5 1.2 Malaysia 24 1.8 1.8 1.8 1.8 1.7 1.7 2.2 1.9 1.7 Philippines 89 1.9 1.8 1.8 1.8 1.7 1.7 2.2 1.9 1.6 Thailand 65 0.7 0.7 0.7 0.7 0.6 0.6 1.1 0.7 0.6 Vietnam 84 1.1 1.0 1.0 1.0 1.0 1.0 1.6 1.1 1.0 South Asia 1,507 1.6 1.6 1.6 1.5 1.5 1.5 1.9 1.7 1.4

Bangladesh 147 2.1 2.1 2.1 2.1 2.0 2.0 1.7 2.1 1.9 India 1,112 1.4 1.4 1.4 1.3 1.3 1.3 1.8 1.5 1.3 Pakistan 166 2.0 2.1 2.1 2.0 2.0 1.9 2.5 2.1 1.9 Oceania 35 1.3 1.2 1.2 1.2 1.2 1.1 1.5 1.4 1.1

Australia 20 0.9 0.9 0.8 0.8 0.8 0.8 1.2 0.9 0.8 New Zealand 4 1.0 1.0 1.0 0.9 0.9 0.9 1.3 1.1 0.8 Other Asia and Oceania 191 2.0 1.7 1.5 1.5 1.5 1.5 2.1 1.9 1.5

Middle East 260 1.7 1.8 1.8 1.8 1.7 1.7 2.1 1.8 1.7

Iran 65 0.8 1.0 1.1 1.1 1.1 1.2 1.4 0.8 1.1 Iraq 27 2.8 2.7 2.7 2.6 2.6 2.5 2.3 2.8 2.4 Saudi Arabia 27 2.4 2.3 2.2 2.0 1.9 1.8 3.7 2.6 1.7 Turkey 70 1.1 1.1 1.1 1.0 1.0 1.0 1.6 1.2 0.9 Other 70 2.7 2.6 2.6 2.6 2.6 2.5 2.9 2.7 2.5

Africa 915 2.2 2.2 2.2 2.1 2.1 2.1 2.5 2.2 2.1

North Africa 161 1.6 1.6 1.6 1.5 1.5 1.5 2.1 1.7 1.4

Algeria 33 1.3 1.2 1.2 1.2 1.2 1.2 1.9 1.3 1.2 Egypt 79 1.8 1.8 1.7 1.7 1.7 1.6 2.2 1.9 1.6 Morocco 33 1.6 1.6 1.6 1.5 1.5 1.5 2.0 1.7 1.4 Tunisia 10 1.0 1.0 1.0 1.0 1.0 1.0 1.5 1.0 1.0 Sub-Saharan Africa 754 2.3 2.3 2.3 2.3 2.3 2.2 2.6 2.3 2.2

Republic of South Africa 44 -0.2 -0.4 -0.4 -0.5 -0.5 -0.5 1.4 0.0 -0.5 Other Sub-Saharan Africa 710 2.5 2.5 2.5 2.4 2.4 2.4 2.7 2.5 2.4

Ethiopia 75 2.4 2.4 2.3 2.3 2.2 2.2 3.0 2.4 2.1 Nigeria 132 2.4 2.4 2.4 2.4 2.4 2.4 2.6 2.4 2.4 Average Population

in 2006 Region/country

1/ Totals for the world and world less United States include countries not otherwise listed in the table. Source: U.S. Department of Commerce, Bureau of the Census and U.S. Department of Agriculture, Economic Research Service. The p opulation assumptions were completed in August 2006.20 USDA Long-term Pro j ections, Februar y 200 7 225 250 275 300

1980 1985 1990 1995 2000 2005 2010 2015 Planted area: Eight major crops 1/

Million acres

1/ The eight major crops are corn, sorghum, barley, oats, wheat, rice, upland cotton, and soybeans. 

### 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 (see box, page 22). Additi onally, steady U.S. and global economic growth assumed in the projections provide a favorable setting for other uses of field crops, which, following the initially large etha nol expansion, supports longer r un increases in consumption and trade and keeps prices at historically high levels. Although tempered somewhat by higher feed pri ces, global livestock production rises in the projections in response to grow ing 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 projec tions, the dollar (U.S. ag ricultural export-weighted basis) is then projected to appreciate. The stronger 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. Assumptions for field crops reflect provisions of the Farm Security and Rural Investment Act of 2002 (2002 Farm Act), which is assumed to conti nue through the project ion period. However, with high prices projected, benefits for price-sensitive programs are reduced. For example, marketing loan benefits and c ounter-cyclical payments for feed grains are minimal, even accounting for stochastic factors. High prices also lead to a re duction in area enrolled in the Conservation Reserve Program (CRP) through 2009, but the CRP is then assumed to rise to 39.2 million acres by the end of the proj ection period, with highe r CRP rental rates. About two-thirds of the land in the reserve is allocated to the ei ght major field crops (cor n, sorghum, barley, oats, wheat, rice, upland cotton, and soybean s), based on historical plantings. Projected plantings for the eight major field cr ops in the United States increase from about 243 million acres in 2006 to more than 247 million du ring most of the projection period, as higher prices and producer net return s bring land into production.USDA Long-term Projections, February 2007 21 40 50 60 70 80 90 100

1980 1985 1990 1995 2000 2005 2010 2015 Planted area: Corn, wheat, and soybeans

Million acres

Corn

Wheat Soybeans

Plantings of different crops are in fluenced 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 pe rcent of acreage for the eight major field crops over the projection period. The cropping mi x shifts more to co rn and away from soybeans as growth in global supply and demand is reflected in prices and net returns. In particular, growth in domestic ethanol produc tion from corn increases demand, raising corn prices and returns.

• Corn acreage rises sharply in the projections, reaching 90 million acres by 2010 as rapid expansion in ethanol production increases corn demand, prices, and producer returns. As growth in ethanol use stabilizes, annual increas es in corn production from yield gains outpace increases in corn use for ethanol, allowing corn stocks to grow modestly and corn prices to ease somewhat. This supports renewed expansi on in domestic corn feeding and exports. Stable, but moderate growth in corn ethanol demand combine with growth in feeding and exports to support producer return s and stabilize acreage at this higher level. Corn plantings are also facilitated by adjustments in soybean area.

• Wheat plantings rebound to 60 million acres in 2007 in response to high prices, but then fall back to 58-59 million acres due to competition from other crops.

• Soybean plantings decline to less than 69 million acres as more favorable returns to corn production draw land from soybeans.22 USDA Long-term Pro j ections, Februar y 200 7 U.S. Biofuel Overview The Energy Policy Act of 2005 mandat es that renewable fuel use in gasoline (with credits for biodiesel) reach 7.5 billion gallons by calendar year 2012. However, high oil prices combined with blender tax credits and import tariffs (see bo x, page 24, on tax credits and tariffs), elimination of methyl tertiary butyl ether (MTBE) as an additive in gasoline blending, State programs, and other factors have provided economic incentives fo r a biofuel expansion th at exceeds the Act’s mandate.
Biofuel Large in Agriculture but Re latively Small in Energy Sector
Most of the ongoing and projected bi ofuel expansion in the United Stat es is for ethanol. Ethanol production is assumed to expand sharply through 2009/10, reflecting ongoing pl ant constr uction in response to strong profit incentive s. Although more moderate grow th is assumed in subsequent years, over 12 billion gallons of ethanol are produced annually by th e end of the projection period. Most of this expansion is dry mill production which primarily uses corn as the feedstock. Consequently, more than 30 per cent of the corn crop is used to produce ethanol by 2009/10. Nonetheless, even by the end of the projection period, ethanol production ( by volume) represents less than 8 percent of annual gaso line use in the United States.
Biodiesel production capacity and ou tput have increased rapidly in the past 2 years and are projected to rise rapidly again in 2007/08. Slower growth is then projected for several years, with biodiesel output leveling off beyond 2010/11 as higher soybean oil pr ices reduce profitability. At its projected high of 700 million gallons, biodies el uses about 23 percent of soybean oil production, but accounts for less than 2 percent of hi ghway diesel fuel use in the United States.
Cellulosic-based production of rene wable fuels is assumed to meet the minimum specified in the Energy Policy Act of 2005 of 250 million gallons in 2013 and subsequent years.

Biofuel Conversion Factors
New dry mill ethanol plants are assumed in the projections to have a production yield of 2.80 gallons of ethanol from a bushel of corn, raising the industry average to 2 .76 gallons per bushel at the end of the projection period. It takes sligh tly more than a pound of refined soybean oil to produce a pound of biodiesel, close to a one-to-one physical conversion factor. This implies that about 7.35 pounds of soybean oil are used to produce 1 gallon of biodiesel.
Acreage Expands and Shifts to Corn
Strong demand for ethanol production results in hi gher corn prices and provides incentives to increase corn acreage. Much of this increase occurs by adjusting crop rotations between corn and soybeans, causing a decline in soybean plantings . Other sources of land for increased corn plantings include cropland used as pasture, reduced fallow, acreag e returning to production from expiring CRP contracts, and shifts from other crops such as cotton.

--ContinuedUSDA Long-term Projections, February 2007 23 U.S. Biofuel Overview (Continued)
Demand Effects As the ethanol industry absorbs a larger share of the corn crop, higher prices will affect both domestic uses and exports, providing for more intense competition between and among the domestic industries and foreign buyers in the demand for feed grains. U.S. feed use of corn typically accounts for 50-60 percent of total corn use and the United States typically accounts for 60-70 percent of world corn exports. Market adjustments to higher prices result in a reduced share of corn used directly for domestic livestock feeding and a lower U.S. share of global corn trade. Corn used for animal feeding declines and represents 40-50 percent of total use in the projections, while the U.S. share of global corn trade falls to 55-60 percent. Use of Coproducts of Ethanol Production Although higher prices will lower direct corn feed us e, distillers grains, a coproduct of dry mill ethanol production, can be used in livestock rations, particular ly in diets of ruminants such as beef and dairy cattle. Distillers grains are less suitable in rations for monogastric animals, such as hogs and poultry. Thus, the growth of ethanol production and increased supply of distillers grains result in different adjustments across U.S. livestock industries. For each 56-pound bushel of corn used in the production of ethanol, about 17.5 pounds of dried distillers grains are produced. Distillers grains produced in a dry mill ethanol plant are relatively wet, with as much as 65-70 percent moisture content. This coproduct can be used in livestock feed in this wet form or can be dried and used in a form with lower moisture content. Using wet di stillers grains avoids costs of drying the product, but involves increased per-unit handling costs. Wet distillers grains also must be used relatively quickly, thus limiting how far they can be transported. Dried dist illers grains incur costs of drying, but facilitate the shipment of this coproduct over greater distances, including for exports. Whether used in a wet or dried form, distillers grains used in livestock feed replace some direct corn use, as well as soybean meal in some animal rations. Based on assumptions regarding the use of distillers grains in the livestock sector, each bushel of corn used to produce ethanol results in a reduction of about a fifth of a bushel of corn feed use. (See box, page 5 2, for further discussion of livestock sector uses of distillers grains.) Crop Prices and Farm Program Costs Increased demand for corn to produce ethanol leads to higher prices for corn and other crops, which, in turn, results in smaller government outlays under current farm commodity programs. For example, with the prices projected in this report, program costs fo r price-sensitive marketing loan benefits and countercyclical payments for feed grains are minimal, even with stochastic considerations included. In contrast, higher market prices result in increases in CRP rental rates and overall costs for the CRP. Government costs for crop insurance also increase because of higher market prices for several of the major insured commodities. Additionally, government tax revenues are reduced due to higher total blender tax credits for biofuels. Short Crop Sensitivity Ethanol demand is very inelastic (unresponsive to price changes) in the range of prices projected in this report. Although the projections assume no shocks to commodity markets from production shortfalls due to weather, pests, or other factors, an important issue is how agricultural markets might respond should a production shortfall occur. With inelastic demands representing a greater share of the market and smaller levels of stocks projected, increased price variability and market volatility are likely.24 USDA Long-term Pro j ections, Februar y 200 7 Biofuel Tax Credits and Import Tariffs Under current law, tax credits are available to ble nders of biofuels equal to 51 cents per gallon for ethanol and $1 per gallon for biodi esel (50 cents for biodiesel made from recycled vegetable oil and animal fats). Additionally, an import tari ff of 54 cents per gallon is assessed on imported ethanol, with duty-free status on up to 7 percent of the U.S. et hanol market for imports from designated Central American and Caribbean countries. The ethanol tax credit is scheduled to expire at the end of calendar year 2010 and the ethanol import tariff was recently extended through the end of calendar year 2008. The biodiesel tax cr edit is scheduled to expire at the end of calendar year 2008.
The long-term projections in this report assume the biofuel tax credit s and the ethanol tariff continue beyond their currently legislated expira tion dates. However, an analysis was also conducted under the alternative assu mption that those provisions expire as scheduled. The table on page 25 shows some of the key differences, focu sing on domestic markets for corn, soybeans, and soybean products.

Without the biofuel tax credits and ethanol tari ff, demands for corn and soybean oil to produce ethanol and biodiesel are reduced. Prices for corn, soybeans, and soybean products are lower, so other domestic demands and exports are increased. Since ethanol changes in the corn market are relatively larger than biodiesel impacts in the soybean and soybean products markets, acreage is reduced for corn, with some of that land shifting to soybeans. With lower prices, stochastic budget costs for farm programs and direct g overnment payments would be higher.

--ContinuedUSDA Long-term Projections, February 2007 25 Biofuel Tax Credits and Import Tariffs (Continued)

Corn and soybean projections under alternative biofuel policy assumptions Item 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Ethanol and biodiesel tax credit and ethanol import tariff assumed to be extended

Corn plantings 86.0 89.0 89.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 Fuel alcohol use 3,200 3,700 3,900 4,000 4,075 4,150 4,200 4,250 4,300 4,350 Feed & residual 5,825 5,775 5,725 5,750 5,775 5,800 5,850 5,900 5,950 5,975 Exports 1,925 1,850 1,850 1,925 2,000 2,050 2,100 2,150 2,200 2,250 Ending stocks 660 620 580 640 670 700 725 750 765 805 Farm price, corn 3.50 3.60 3.75 3.55 3.50 3.45 3.40 3.35 3.35 3.30

Soybean plantings 71.0 69.5 69.0 69.0 69.0 69.0 69.0 68.8 68.8 68.8 Exports 1,150 980 845 845 850 850 855 865 875 875 Ending stocks 355 237 235 237 234 232 235 233 229 230 Farm price, soybeans 7.00 7.25 7.30 7.00 6.90 6.80 6.80 6.75 6.75 6.75

Biodiesel use, soybean oil 4,410 4,594 4,778 4,961 5,145 5,145 5,145 5,145 5,145 5,145 Food use, soybean oil 16,090 16,231 16,348 16,464 16,580 16,880 17,180 17,480 17,780 18,080 Exports, soybean oil 975 875 700 700 775 775 775 775 750 725 Ending stocks, soybean oil 2,088 1,888 1,878 1,883 1,883 1,903 1,883 1,818 1,738 1,703 Soybean oil price 0.300 0.315 0.320 0.315 0.310 0.305 0.305 0.305 0.305 0.305 Soybean meal price 200.00 205.00 205.00 195.00 192.50 190.00 188.50 186.50 185.00 185.00

Ethanol and biodiesel tax credit and ethanol import tariff assumed to end

Corn plantings 86.0 89.0 88.3 88.9 88.5 87.7 87.7 87.6 87.6 87.6 Fuel alcohol use 3,200 3,600 3,700 3,600 3,500 3,525 3,550 3,575 3,600 3,625 Feed & residual 5,825 5,806 5,781 5,852 5,922 5,956 6,010 6,065 6,119 6,149 Exports 1,925 1,876 1,887 1,979 2,086 2,139 2,193 2,246 2,299 2,352 Ending stocks 660 663 620 749 883 919 962 1,002 1,045 1,124 Farm price, corn 3.50 3.50 3.60 3.35 3.20 3.15 3.10 3.05 3.05 3.00

Soybean plantings 71.0 69.5 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 Exports 1,150 980 870 885 890 895 900 915 925 925 Ending stocks 355 236 247 247 247 243 243 238 232 235 Farm price, soybeans 6.95 7.10 7.20 6.85 6.60 6.45 6.40 6.35 6.35 6.30

Biodiesel use, soybean oil 3,675 2,205 1,103 735 551 368 368 368 368 368 Food use, soybean oil 16,675 17,245 17,598 17,965 18,299 18,683 19,033 19,433 19,833 20,132 Exports, soybean oil 1,200 2,200 3,000 3,400 3,600 3,725 3,675 3,575 3,475 3,475 Ending stocks, soybean oil 2,013 1,863 1,978 2,008 2,058 2,103 2,108 2,068 1,988 1,928 Soybean oil price 0.2975 0.3075 0.310 0.3025 0.290 0.285 0.285 0.285 0.285 0.285 Soybean meal price 200.00 203.00 203.50 193.50 190.00 186.00 182.50 180.00 177.00 175.00

Difference

Corn plantings 0.0 0.0 -0.7 -1.1 -1.5 -2.3 -2.3 -2.4 -2.4 -2.4 Fuel alcohol use 0 -100 -200 -400 -575 -625 -650 -675 -700 -725 Feed & residual 0 31 56 102 147 156 160 165 169 174 Exports 0 26 37 54 86 89 93 96 99 102 Ending stocks 0 43 40 109 213 219 237 252 280 319 Farm price, corn 0.00 -0.10 -0.15 -0.20 -0.30 -0.30 -0.30 -0.30 -0.30 -0.30

Soybean plantings 0.0 0.0 1.0 1.0 1.0 1.0 1.0 1.2 1.2 1.2 Exports 0 0 25 40 40 45 45 50 50 50 Ending stocks 0 -1 12 10 13 11 8 5 3 5 Farm price, soybeans -0.05 -0.15 -0.10 -0.15 -0.30 -0.35 -0.40 -0.40 -0.40 -0.45

Biodiesel use, soybean oil -735 -2,389 -3,675 -4,226 -4,594 -4,778 -4,778 -4,778 -4,778 -4,777 Food use, soybean oil 585 1,014 1,250 1,501 1,719 1,803 1,853 1,953 2,053 2,052 Exports, soybean oil 225 1,325 2,300 2,700 2,825 2,950 2,900 2,800 2,725 2,750 Ending stocks, soybean oil -75 -25 100 125 175 200 225 250 250 225 Soybean oil price -0.0025 -0.0075 -0.010 -0.0125 -0.020 -0.020 -0.020 -0.020 -0.020 -0.020 Soybean meal price 0.00 -2.00 -1.50 -1.50 -2.50 -4.00 -6.00 -6.50 -8.00 -10.00 Units for plantings are million acres; corn and soybean uses, million bushels; farm prices, dollars per bushel; soybean oil use s, million pounds; soybean oil price, dollars per pound; and soybean meal price, dollars per ton.26 USDA Long-term Pro j ections, Februar y 200 7 0 2 4 6 8 10 12

1980 1985 1990 1995 2000 2005 2010 2015 Corn: Domestic use and exports

Billion bushels

Total domestic use

Exports Ethanol

Domestic corn use grows throughout the projection period, primarily reflecting increases in corn used in the production of ethanol. Global econo mic growth underlies increases in U.S. corn exports after 2009/10.

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

• Feed and residual use of corn de clines in the initial years and then rises only moderately as increased feeding of distillers grains, a copr oduct of dry mill ethanol production, helps meet livestock feed demand.

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

• U.S. corn exports fall over the next several y ears 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, which already has tariff-free status.USDA Long-term Projections, February 2007 27 0.0 0.5 1.0 1.5 2.0

1980 1985 1990 1995 2000 2005 2010 2015 Wheat: Domestic use and exports

Billion bushels

Domestic use

Exports

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

• Domestic demand for wheat refl ects a relatively mature market. Food use of wheat is projected to show moderate gains. Growth is somewhat slower than population increases, reflecting adjustments by some consumer s to reduce carbohydrates in diets.

• Feed use of wheat, a low-value use of the cr op, rises sharply in the initial years of the projections as higher corn pric es encourage increases in whea t feeding, particularly in the summer quarter. As corn prices fall, wheat feeding declines after 2010/11 due to relatively higher wheat prices compared with corn.

• U.S. wheat exports are steady over the next several years, but increase after 2009/10 as income and population in developing countri es grow, raising globa l wheat consumption and trade. Competition continues from the European Union (EU), Canada, Argentina, Australia, and the Black Sea region. The U.S. ma rket share initially d eclines but then holds relatively constant near 22 pe rcent once U.S. exports resume their growth. Market shares for Australia, Argentina, and the Black Sea re gion increase, while shares for Canada and the EU decline.28 USDA Long-term Pro j ections, Februar y 200 7 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2

1980 1985 1990 1995 2000 2005 2010 2015 Soybeans: Domestic use and exports

Billion bushels

Domestic use

Exports

Domestic use of soybeans continues to rise slowly , but U.S. soybean exports initially fall and then grow very slowly.

• Longrun growth in domestic soybean crush is mostly driven by increasing demand for domestic soybean meal for livestock feed. So me gains in crush also reflect increasing domestic soybean oil demand for biodiesel production through 2011/12.

• U.S. soybean exports fall below 900 million bushels as U.S. acreage is shifted to corn to support ethanol production and competition from Brazil strengthens. Consequently, the U.S. market share of global soybean trade declines to less than 25 percent.

• U.S. exports of soybean oil and soybean meal face strengthening competition from South American producers. U.S. exports of soybean oil are also limited by increases in domestic consumption, while soybean meal exports benefit from rising domestic supplies.USDA Long-term Projections, February 2007 29 0 2 4 6 8 10 12 14 16 18

1980 1985 1990 1995 2000 2005 2010 2015 Upland cotton: Domestic mill use and exports

Million bales

Domestic mill use Exports

U.S. mill use of upland cotton declines in the projections while upland cotton exports rise after 2008/09.

• 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 impor t 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 pr oduction and lowering the apparel industry’s demand for fabric and yarn produced in the Unite d States. Some increase in U.S. yarn and fabric exports is projected due to trade liber alization, but the net effect is for declining domestic mill use.

• U.S. upland cotton exports decline in 2008/09 as supplies are reduced due to acreage shifts to corn. Exports then gr ow moderately, accounting for 80 percent of U.S. cotton production throughout much of the projection period.

• Growth in the textile industry in China slow s 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 2008/09 keep the U.S. cotton trade share at 37-38 percent, down from over 40 percent in 2003/04 and 2004/05.30 USDA Long-term Pro j ections, Februar y 200 7 0 20 40 60 80 100 120 140 160

1980 1985 1990 1995 2000 2005 2010 2015 Rice: Domestic use and exports
Million hundredweight

Domestic use

Exports

Slow expansion in domestic food use of rice is proj ected over the next decade. U.S. rice exports show moderate increases.

• Growth in domestic use of rice is projected at only slightly faster than population growth, well below the rates of growth in the 1980s a nd 1990s when per capita use rose rapidly. Imports of aromatic varieties of rice from As ia account for a growing share of domestic use in the projections.

• U.S. rice exports are projected to increase at a moderate pace over the next decade as the U.S. price difference over Asian competitors falls, increasing U.S. competitiveness in global rice markets. Rough rice exports to Latin America are expected to continue increasing and account for most of the U.S. export expansion.

• Global rice prices are projected to increase about 2 percen t per year, exceeding $8.60 per hundredweight (rough basis) at the end of the projection period and remaining above the loan rate of $6.50 throughout. Despite slow er production growth in Asia and growing worldwide import demand for rice, increases in global prices are limited by moderate consumption growth, reflecting dietary shifts away from staple foods in Asia as incomes rise. U.S. rice prices drop slightly early in the projection period, and then slowly increase to nearly $10 per hundredweight by 2016. The U.S. price difference over Asian competitors declines for most of the projection period.USDA Long-term Projections, February 2007 31 0 20 40 60 80 100

1980 1985 1990 1995 2000 2005 2010 2015 Stocks-to-use ratios: Corn, wheat, and soybeans

Percent

Corn Wheat

Soybeans

Strong ethanol demand sharply lowers U.S. corn stoc ks in the projections. Shifts in acreage to corn from soybeans push soybean stocks down from th eir record levels of recent years. After the ethanol expansion slows later in th e projections, stocks rebuild some what for corn and stabilize at lower levels for soybeans. Wheat stocks rebound from 2006/07 levels as higher prices encourage additional acreage and production. As wheat exports strengthen in subsequent years, stocks decline.

0 20 40 60 80 100 120

1980 1985 1990 1995 2000 2005 2010 2015 Stocks-to-use ratios: Cotton and rice

Percent

Cotton

Rice

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 re build through the end of the projections. Similarly, stocks of rice fall as acreage initially declines, but rice stocks gradually increase after 2010/11 as rice acreage rises.32 USDA Long-term Pro j ections, Februar y 200 7 0 1 2 3 4 5 6 7 8

1980 1985 1990 1995 2000 2005 2010 2015 Corn, wheat, and soybean prices
Dollars per bushel

Corn Wheat Soybeans

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

• Corn prices rise sharply thr ough 2009/10 as increases in etha nol production strengthen corn demand. In the longer run, higher acreage and gains in yields ar e sufficient to meet slower ethanol production gains and moderate export growth, resulting in rising stocks-to-use ratios and falling prices for corn. No netheless, corn prices remain high.

• Acreage reductions for soybeans and declines in stocks from initially large levels lead to large soybean price increases th rough the early years of the pr ojections. In the longer run, soybean prices are projected to fall back somewhat due to supply response in South America.

• Wheat prices are held high in the early year s of the projections despite somewhat higher production as higher corn prices support wheat prices by enc ouraging increased wheat feed use. Later in the projections, wheat exports increase moderately, lowering the stocks-touse ratio and raising wheat prices further.USDA Long-term Projections, February 2007 33 0 2 4 6 8 10 12

1990 1995 2000 2005 2010 2015 Fiscal year Sugar: Domestic produc tion, use, and imports

Million short tons

Domestic use

Imports Production

Sugar projections for the United States and Mexico ar e strongly interrelated. For additional discussion of projections for Mexico, see Sugar and Sweeteners Outlook , February 2007, available at http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1386.

• On July 27, 2006, the United States and Mexico announced an agreement that resolves disputes related to each nation’s interpretation of sweetener provisions of the North American Free Trade Agreement (NAFTA). Effective on January 1, 2008, there will be no duties or quantitative restraints on sugar or high fructose corn syrup (HFC S) trade between the two countries. Mexico’s over-quota tariff on U.S. sugar will be eliminated on January 1, 2008, as required by the NAFTA. The United States and Mexico confirmed that on Ju ly 3, 2006, they submitted a joint letter to the World Trade Organization (WTO) Dispute Settlement Body in which both countries accepted in principle the elimination of Mexico’s soft drink and distribution taxes.

• Mexico’s beverage industry is assumed to shift to higher use of HFCS in 2008 and subsequent years in the projection period. This implies a higher exportable surplus of sugar from Mexico. Returns from exporting sugar to the United States are 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. As a result, Mexican sugar exports are projected to rise to 889,000 metric tons, raw value (MTRV) in 2008. After 2008, Mexican s ugar exports decrease about 40,000 MTRV per year as more production is used to satisfy expanding Me xican sweetener demand. (In Mexico, per capita sweetener consumption is assumed to grow about 0.9 percent a year.)

• The U.S. sugar price support program includes the loan rate program and marketing allotments. With high imports of sugar projected, the import trigger (1.532 million short ton, raw value--STRV) for suspension of allotments is likely to be exceed ed in all years of the projections. Downward price pressures implied by NAFTA sugar imports indicate forfeitures to the Commodity Credit Corporation (CCC) throughout the projection pe riod, which average 164,000 STRV per year. Historical growth trends in U.S. sugar sector productivity measures (sugarbeet yields, sugarcane yields, and sugar per acre) are assumed to continue throughout the projections.

• The raw sugar tariff-rate quota (TRQ) is established e ach year in the projections at 1,117,195 MTRV, the WTO minimum access level. The refined sugar TRQ is established each year at 57,000 MTRV. The yearly raw sugar TRQ shortfall is assumed to equal about 45,000 MTRV.

• The sugar projections assume that sweetener cons umption in the United States grows at the same rate as does population. Because growth in impor ts of sugar-containing pr oducts is higher than population growth, per capita consumption of dom estically delivered sugar decreases slightly during the projection period.34 USDA Long-term Pro j ections, Februar y 200 7 0 200 400 600 800

1990 1995 2000 2005 2010 2015 U.S. flue-cured and burley tobacco: Domestic use and exports
Million pounds

Flue-cured domestic use 1/

Flue-cured exports

Burley exports Burley domestic use 1/

1/ Domestic use includes domestically grown and imported tobacco.
The tobacco sector is continuing to adjust to the post-program era. Legislation enacted in October 2004 ended the U.S. tobacco marketing quota and price support program beginning with the 2005 crop year. During the first season without a pr ogram (2005/06), nearly half of the tobacco producers pulled out of production. Remaining grower s grew similar levels as previously. During the second season after the program, many of t hose remaining growers expanded operations and tobacco acreage and production increased. Producti on during the 2006 crop year is expected to be about 13 percent greater than the first post-program crop.

• Tobacco leaf production expands starting in 2006 as costs decline due to the elimination of costs associated with acquiring quota and as economies of scale are achieved on fewer, larger farms. Additionally, production shifts to areas such as the Coastal Plain of North Carolina and western Kentucky, where producer s can achieve more economically viable scales of operation. Pennsylvania has become a major burley producing State. Leaf prices recovered slightly in 2006/07 and are projec ted to remain favorable for growers with marketing contracts.

• Tobacco exports are projected to increase moderately over the next decade. U.S. leaf remains competitive on the global market although the tobacco industry also faces competition from foreign producer s, particularly Brazil.

• Declining cigarette consumption in the United States is an importa nt factor underlying projected decreases in domestic use of tobacco leaf. Cigarette sales in the United States are expected to continue to fa ll 2-3 percent per year for th e projection period. Per capita consumption declines as restri ctions on smoking become more widespread and as the cost of cigarettes increases due to higher prices and taxes. Exports of cigarettes will likely stabilize near current levels.USDA Long-term Projections, February 2007 35 0 10 20 30 40 50 60 70

1990 1995 2000 2005 2010 2015 Nursery and greenhouse

Fruit and nuts Vegetables and melons Billion dollars Value of horticultural production

The total farmgate production va lue of horticultural crops for 2006 is $50 billion, with about a third of the total accruing to each of the following three categories: fruits and nuts; vegetables and melons; and nursery, greenhouse, and other crop s. The production value grows by 2.5 percent annually over the next decade, reaching $64 billion.

• U.S. imports of horticultural products (fruit and nuts, vegetables, greenhouse and nursery products, essential oils, beer, and wine) are pr ojected to continue outpacing exports, with net imports expected to increase about $7 billion from 2006 to 2016. The dollar’s appreciation after 2008 is an important factor affecting trade, slow ing export demand for U.S. horticultural products and raising U.S. import demand.

• U.S. horticultural imports are expected to gr ow by about 4 percent annually through 2016. Imports play an important role in domes tic supply during the wi nter and, increasingly, during other times of the year. Reduced tr ade 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, acc ounting for $8.4 billion out of a total $29.2 billion in 2006. Mexi co is the second biggest so urce of U.S. horticultural imports, which amounted to $6.7 billion in 2006. Chile, Canada, and Brazil are also large sources of horticultural product imports by the United States. Key import commodities include potatoes, tomatoes, bananas, grapes, froz en concentrated orange juice, apple juice, melons, tree nuts (especially cashew s), wine, beer, and essential oils.

• U.S. horticultural exports are ex pected to grow by 3 percen t a year through 2016, with the major export markets including Canada, Japan, and Southeast Asia. Exports of almonds, other tree nuts, and noncitrus frui ts will lead export growth of fruit and nuts. Exports of fresh vegetables will be stronge r than processed vegetables. Exports of wine and essential oils are also expected to increase.36 USDA Long-term Pro j ections, Februar y 200 7 Table 4. Summary policy variables for major field crops, 2005-2016 Direct payment rate Marketing assistance loan rate Target price
Dollars 1

Corn 0.28 1.95 2.63 Sorghum 0.35 1.95 2.57 Barley 0.24 1.85 2.24 Oats 0.024 1.33 1.44 Wheat 0.52 2.75 3.92 Rice 2.35 6.50 10.50 Upland cotton 0.0667 0.52 0.724 Soybeans 0.44 5.00 5.80 1/ Units are dollars per bushel except fo r upland cotton (per pound) and rice (per hundredweight).

Table 5. Conservation Reserve Program acreage assumptions 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Million acres

Corn 6.0 6.2 6.4 5.9 5.7 5.8 6.0 6.2 6.4 6.6 6.6 6.8 Sorghum 0.9 0.9 1.0 0.9 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.0 Barley 0.8 0.9 0.9 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 Oats 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 Wheat 8.4 8.7 9.0 8.2 7.9 8.1 8.3 8.7 8.9 9.1 9.2 9.4 Upland cotton 1.5 1.6 1.6 1.5 1.4 1.5 1.5 1.6 1.6 1.6 1.7 1.7 Soybeans 5.5 5.7 5.9 5.4 5.2 5.3 5.5 5.7 5.9 6.0 6.1 6.2

Subtotal 23.6 24.4 25.2 23.1 22.2 22.7 23.5 24.4 25.2 25.7 26.0 26.4
Other 11.4 11.7 11.8 10.5 10.0 10.3 10.7 11.1 11.5 11.7 11.9 12.8

Total 35.0 36.1 37.1 33.6 32.2 33.0 34.1 35.6 36.7 37.4 37.9 39.2 Crop allocationUSDA Long-term Projections, February 2007 37 Table 6. Planted and harvested acreage for major field crops, long-term projections 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Million acres Planted acreage, eight major crops

Corn 81.8 78.6 86.0 89.0 89.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 Sorghum 6.5 6.3 6.0 5.8 5.8 5.8 5.7 5.7 5.6 5.6 5.5 5.5 Barley 3.9 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 Oats 4.2 4.2 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 Wheat 57.2 57.3 60.0 59.5 59.0 58.5 58.5 58.5 58.5 58.5 58.5 58.5 Rice 3.4 2.8 3.1 3.0 3.0 3.1 3.1 3.1 3.1 3.1 3.1 3.1 Upland cotton 14.0 15.0 13.7 13.5 13.5 13.6 13.7 13.7 13.8 13.8 13.8 13.8 Soybeans 72.0 75.6 71.0 69.5 69.0 69.0 69.0 69.0 69.0 68.8 68.8 68.8
Total 243.0 243.3 247.4 247.9 246.9 247.6 247.6 247.6 247.6 247.4 247.3 247.3

Harvested acreage, eight major crops

Corn 75.1 71.0 78.8 81.8 81.8 82.8 82.8 82.8 82.8 82.8 82.8 82.8 Sorghum 5.7 5.3 5.1 4.9 4.9 4.9 4.9 4.9 4.8 4.8 4.7 4.7 Barley 3.3 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Oats 1.8 1.6 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 Wheat 50.1 46.8 51.0 50.6 50.2 49.7 49.7 49.7 49.7 49.7 49.7 49.7 Rice 3.4 2.8 3.1 3.0 3.0 3.0 3.0 3.1 3.1 3.1 3.1 3.1 Upland cotton 13.5 12.5 12.4 12.3 12.3 12.4 12.5 12.5 12.5 12.5 12.6 12.6 Soybeans 71.3 74.5 69.9 68.4 67.9 67.9 67.9 67.9 67.9 67.7 67.7 67.7
Total 224.2 217.5 225.2 225.9 225.0 225.6 225.7 225.8 225.7 225.5 225.5 225.538 USDA Long-term Pro j ections, Februar y 200 7 Table 7. Selected supply, use, and price variables for major field crops, long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Yields 1 Corn 147.9 151.2 153.1 155.0 156.9 158.8 160.7 162.6 164.5 166.4 168.3 170.2 Sorghum 68.7 54.2 64.8 65.2 65.6 66.0 66.4 66.8 67.2 67.6 68.0 68.4 Barley 64.8 61.0 64.8 65.4 66.0 66.6 67.2 67.8 68.4 69.0 69.6 70.2 Oats 63.0 59.5 62.9 63.3 63.7 64.1 64.5 64.9 65.3 65.7 66.1 66.5 Wheat 42.0 38.7 42.5 42.8 43.1 43.4 43.7 44.0 44.3 44.6 44.9 45.2 Rice 6,636 6,847 6,916 6,991 7,060 7,130 7,192 7,256 7,321 7,379 7,437 7,496 Upland cotton 825 788 800 810 820 830 840 850 855 860 865 870 Soybeans 43.0 43.0 41.5 42.0 42.4 42.9 43.3 43.8 44.2 44.7 45.1 45.6

Production 2 Corn 11,112 10,745 12,065 12,680 12,835 13,150 13,305 13,465 13,620 13,780 13,935 14,095 Sorghum 394 288 330 320 320 325 325 325 325 325 320 320 Barley 212 180 195 195 200 200 200 205 205 205 210 210 Oats 115 94 120 120 120 120 125 125 125 125 125 125 Wheat 2,105 1,812 2,170 2,165 2,165 2,155 2,170 2,185 2,200 2,215 2,230 2,245 Rice 223.2 193.3 213.0 211.1 213.6 216.0 219.0 221.3 223.7 225.8 227.9 230.1 Upland cotton 23,260 20,510 20,700 20,800 21,000 21,400 21,900 22,100 22,300 22,400 22,700 22,800 Soybeans 3,063 3,204 2,900 2,870 2,880 2,910 2,940 2,970 3,000 3,025 3,055 3,085

Exports 2 Corn 2,147 2,200 1,925 1,850 1,850 1,925 2,000 2,050 2,100 2,150 2,200 2,250 Sorghum 195 165 160 150 150 150 150 150 150 150 150 150 Barley 28 20 20 20 20 20 20 20 20 20 20 20 Oats 2 2 3 3 3 3 3 3 3 3 3 3 Wheat 1,009 925 950 950 950 975 1,000 1,025 1,050 1,075 1,100 1,125 Rice 115.8 97.0 107.0 108.0 108.0 108.0 109.0 111.0 113.0 114.5 116.0 117.5 Upland cotton 17,437 15,450 16,700 16,300 16,400 16,500 16,900 17,300 17,600 17,800 18,000 18,150 Soybeans 947 1,145 1,150 980 845 845 850 850 855 865 875 875 Soybean meal 7,950 8,500 9,000 9,950 10,100 10,200 10,450 10,500 10,500 10,600 10,600 10,700

Ending stocks 2 Corn 1,971 935 660 620 580 640 670 700 725 750 765 805 Sorghum 65 39 34 34 34 34 34 34 34 34 34 34 Barley 108 93 93 93 98 97 96 100 99 97 100 98 Oats 53 49 51 53 50 47 49 51 48 50 52 49 Wheat 571 418 493 517 517 482 462 442 427 422 422 427 Rice 43.0 34.5 34.2 30.4 28.3 27.9 28.8 29.4 29.7 29.9 30.2 30.4 Upland cotton 5,981 5,912 4,850 4,400 4,150 4,300 4,650 4,900 5,150 5,300 5,550 5,750 Soybeans 449 565 355 237 235 237 234 232 235 233 229 230

Prices 3 Corn 2.00 3.00 3.50 3.60 3.75 3.55 3.50 3.45 3.40 3.35 3.35 3.30 Sorghum 1.86 3.00 3.30 3.35 3.50 3.30 3.25 3.20 3.15 3.10 3.10 3.05 Barley 2.53 2.89 3.50 3.60 3.70 3.55 3.45 3.45 3.40 3.35 3.35 3.35 Oats 1.63 1.85 2.40 2.45 2.50 2.35 2.25 2.20 2.15 2.10 2.10 2.10 Wheat 3.42 4.35 4.45 4.25 4.25 4.35 4.40 4.45 4.50 4.55 4.55 4.55 Rice 7.62 9.25 8.95 8.95 9.20 9.35 9.41 9.43 9.50 9.60 9.70 9.83 Soybeans 5.66 5.90 7.00 7.25 7.30 7.00 6.90 6.80 6.80 6.75 6.75 6.75 Soybean oil 0.234 0.260 0.300 0.315 0.320 0.315 0.310 0.305 0.305 0.305 0.305 0.305 Soybean meal 174.2 177.5 200.0 205.0 205.0 195.0 192.5 190.0 188.5 186.5 185.0 185.0 1/ Bushels per acre except for upland cotton and rice (pounds per acre). 2/ Million bushels except for upland cotton (thousand bales), rice (million hundredweight), and soybean meal (thousand tons). 3/ Dollars per bushel except for soybean oil (per pound) , rice (per hundredweight), a nd soybean meal (per ton).USDA Long-term Projections, February 2007 39 Table 8. U.S. corn long-term projections Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area (million acres):

Planted acres 81.8 78.6 86.0 89.0 89.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 Harvested acres 75.1 71.0 78.8 81.8 81.8 82.8 82.8 82.8 82.8 82.8 82.8 82.8

Yields (bushels per acre):

Yield/harvested acre 147.9 151.2 153.1 155.0 156.9 158.8 160.7 162.6 164.5 166.4 168.3 170.2

Supply and use (million bushels):

Beginning stocks 2,114 1,971 935 660 620 580 640 670 700 725 750 765 Production 11,112 10,745 12,065 12,680 12,835 13,150 13,305 13,465 13,620 13,780 13,935 14,095 Imports 9 10 15 20 25 20 20 20 20 20 20 20 Supply 13,235 12,725 13,015 13,360 13,480 13,750 13,965 14,155 14,340 14,525 14,705 14,880

Feed & residual 6,136 6,050 5,825 5,775 5,725 5,750 5,775 5,800 5,850 5,900 5,950 5,975 Food, seed, & industrial 2,981 3,540 4,605 5,115 5,325 5,435 5,520 5,605 5,665 5,725 5,790 5,850 Fuel alcohol use 1 1,603 2,150 3,200 3,700 3,900 4,000 4,075 4,150 4,200 4,250 4,300 4,350 Domestic use 9,117 9,590 10,430 10,890 11,050 11,185 11,295 11,405 11,515 11,625 11,740 11,825 Exports 2,147 2,200 1,925 1,850 1,850 1,925 2,000 2,050 2,100 2,150 2,200 2,250 Total use 11,264 11,790 12,355 12,740 12,900 13,110 13,295 13,455 13,615 13,775 13,940 14,075

Ending stocks 1,971 935 660 620 580 640 670 700 725 750 765 805 Stocks/use ratio, percent 17.5 7.9 5.3 4.9 4.5 4.9 5.0 5.2 5.3 5.4 5.5 5.7

Prices (dollars per bushel):

Farm price 2.00 3.00 3.50 3.60 3.75 3.55 3.50 3.45 3.40 3.35 3.35 3.30 Loan rate 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95

Variable costs of production (dollars):

Per acre 194 207 216 222 225 228 230 233 236 239 242 245 Per bushel 1.31 1.37 1.41 1.43 1.43 1.43 1.43 1.44 1.44 1.44 1.44 1.44

Returns over variable costs (dollars per acre):

Net returns 132 247 319 336 363 336 332 328 323 318 321 316 Note: Marketing year beginning September 1 for corn. 1/ Corn used in ethanol production is accounted for in fuel alcohol use. Distillers grains, a coproduct of ethanol production, is not accounted for in the balance sheet for corn.40 USDA Long-term Pro j ections, Februar y 200 7 Table 9. U.S. sorghum long-term projections Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area (million acres):

Planted acres 6.5 6.3 6.0 5.8 5.8 5.8 5.7 5.7 5.6 5.6 5.5 5.5 Harvested acres 5.7 5.3 5.1 4.9 4.9 4.9 4.9 4.9 4.8 4.8 4.7 4.7

Yields (bushels per acre):

Yield/harvested acre 68.7 54.2 64.8 65.2 65.6 66.0 66.4 66.8 67.2 67.6 68.0 68.4

Supply and use (million bushels):

Beginning stocks 57 65 39 34 34 34 34 34 34 34 34 34 Production 394 288 330 320 320 325 325 325 325 325 320 320 Imports 0 0 0 0 0 0 0 0 0 0 0 0 Supply 451 354 369 354 354 359 359 359 359 359 354 354

Feed & residual 141 95 120 120 120 125 125 125 125 125 120 120 Food, seed, & industrial 50 55 55 50 50 50 50 50 50 50 50 50 Domestic 191 150 175 170 170 175 175 175 175 175 170 170 Exports 195 165 160 150 150 150 150 150 150 150 150 150 Total use 386 315 335 320 320 325 325 325 325 325 320 320

Ending stocks 65 39 34 34 34 34 34 34 34 34 34 34 Stocks/use ratio, percent 16.8 12.4 10.1 10.6 10.6 10.5 10.5 10.5 10.5 10.5 10.6 10.6

Prices (dollars per bushel):

Farm price 1.86 3.00 3.30 3.35 3.50 3.30 3.25 3.20 3.15 3.10 3.10 3.05 Loan rate 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95 1.95

Variable costs of production (dollars):

Per acre 125 132 137 140 142 144 146 148 150 152 154 156 Per bushel 1.81 2.43 2.11 2.14 2.16 2.18 2.20 2.21 2.23 2.25 2.27 2.29

Returns over variable costs (dollars per acre):

Net returns 23 31 77 79 88 74 70 66 62 57 57 52 Note: Marketing year beginning September 1 for sorghum.USDA Long-term Projections, February 2007 41 Table 10. U.S. barley long-term projections Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area (million acres):

Planted acres 3.9 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 Harvested acres 3.3 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0

Yields (bushels per acre):

Yield/harvested acre 64.8 61.0 64.8 65.4 66.0 66.6 67.2 67.8 68.4 69.0 69.6 70.2

Supply and use (million bushels):

Beginning stocks 128 108 88 88 88 93 92 91 95 94 92 95 Production 212 180 195 195 200 200 200 205 205 205 210 210 Imports 5 15 20 25 25 25 25 25 25 25 25 25 Supply 346 303 303 308 313 318 317 321 325 324 327 330

Feed & residual 52 40 40 45 45 50 50 50 55 55 55 60 Food, seed, & industrial 158 155 155 155 155 156 156 156 156 157 157 157 Domestic 210 195 195 200 200 206 206 206 211 212 212 217 Exports 28 20 20 20 20 20 20 20 20 20 20 20 Total use 238 215 215 220 220 226 226 226 231 232 232 237

Ending stocks 108 88 88 88 93 92 91 95 94 92 95 93 Stocks/use ratio, percent 45.4 40.9 40.9 40.0 42.3 40.7 40.3 42.0 40.7 39.7 40.9 39.2

Prices (dollars per bushel):

Farm price 2.53 2.90 3.50 3.50 3.60 3.40 3.25 3.25 3.20 3.15 3.15 3.15 Loan rate 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85

Variable costs of production (dollars):

Per acre 94 100 104 106 108 109 111 112 114 115 117 119 Per bushel 1.45 1.63 1.60 1.63 1.64 1.64 1.65 1.66 1.67 1.67 1.68 1.69

Returns over variable costs (dollars per acre):

Net returns 71 77 123 122 130 117 108 108 105 102 102 103 Note: Marketing year beginning June 1 for barley.42 USDA Long-term Pro j ections, Februar y 200 7 Table 11. U.S. oats long-term projections Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area (million acres):

Planted acres 4.2 4.2 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 Harvested acres 1.8 1.6 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9

Yields (bushels per acre):

Yield/harvested acre 63.0 59.5 62.9 63.3 63.7 64.1 64.5 64.9 65.3 65.7 66.1 66.5

Supply and use (million bushels):

Beginning stocks 58 53 49 51 53 50 47 49 51 48 50 52 Production 115 94 120 120 120 120 125 125 125 125 125 125 Imports 91 105 85 90 90 90 90 90 90 95 95 95 Supply 264 251 254 261 263 260 262 264 266 268 270 272

Feed & residual 135 125 125 130 135 135 135 135 140 140 140 145 Food, seed, & industrial 74 75 75 75 75 75 75 75 75 75 75 75 Domestic 209 200 200 205 210 210 210 210 215 215 215 220 Exports 2 2 3 3 3 3 3 3 3 3 3 3 Total use 211 202 203 208 213 213 213 213 218 218 218 223

Ending stocks 53 49 51 53 50 47 49 51 48 50 52 49 Stocks/use ratio, percent 25.1 24.3 25.1 25.5 23.5 22.1 23.0 23.9 22.0 22.9 23.9 22.0

Prices (dollars per bushel):

Farm price 1.63 1.85 2.40 2.45 2.50 2.35 2.25 2.20 2.15 2.10 2.10 2.10 Loan rate 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33 1.33

Variable costs of production (dollars):

Per acre 63 67 70 72 73 74 75 76 77 78 80 81 Per bushel 1.00 1.13 1.12 1.14 1.15 1.16 1.17 1.17 1.18 1.19 1.20 1.21

Returns over variable costs (dollars per acre):

Net returns 40 43 81 83 86 77 70 67 63 59 59 59 Note: Marketing year beginning June 1 for oats.USDA Long-term Projections, February 2007 43 Table 12. U.S. wheat long-term projections Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area (million acres):

Planted acres 57.2 57.3 60.0 59.5 59.0 58.5 58.5 58.5 58.5 58.5 58.5 58.5 Harvested acres 50.1 46.8 51.0 50.6 50.2 49.7 49.7 49.7 49.7 49.7 49.7 49.7

Yields (bushels per acre):

Yield/harvested acre 42.0 38.7 42.5 42.8 43.1 43.4 43.7 44.0 44.3 44.6 44.9 45.2

Supply and use (million bushels):

Beginning stocks 540 571 418 493 517 517 482 462 442 427 422 422 Production 2,105 1,812 2,170 2,165 2,165 2,155 2,170 2,185 2,200 2,215 2,230 2,245 Imports 82 105 100 105 105 110 110 115 115 120 120 125 Supply 2,727 2,488 2,688 2,763 2,787 2,782 2,762 2,762 2,757 2,762 2,772 2,792

Food 915 920 930 935 940 945 950 955 960 965 970 975 Seed 78 80 80 81 80 80 80 80 80 80 80 80 Feed & residual 153 145 235 280 300 300 270 260 240 220 200 185 Domestic 1,146 1,145 1,245 1,296 1,320 1,325 1,300 1,295 1,280 1,265 1,250 1,240 Exports 1,009 925 950 950 950 975 1,000 1,025 1,050 1,075 1,100 1,125 Total use 2,155 2,070 2,195 2,246 2,270 2,300 2,300 2,320 2,330 2,340 2,350 2,365

Ending stocks 571 418 493 517 517 482 462 442 427 422 422 427 Stocks/use ratio, percent 26.5 20.2 22.5 23.0 22.8 21.0 20.1 19.1 18.3 18.0 18.0 18.1

Prices (dollars per bushel):

Farm price 3.42 4.35 4.45 4.25 4.25 4.35 4.40 4.45 4.50 4.55 4.55 4.55 Loan rate 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75 2.75

Variable costs of production (dollars):

Per acre 80 86 89 91 93 94 95 97 98 100 101 102 Per bushel 1.91 2.21 2.10 2.14 2.15 2.17 2.18 2.20 2.22 2.23 2.25 2.27

Returns over variable costs (dollars per acre):

Net returns 63 83 100 90 90 95 97 99 101 103 103 103 Note: Marketing year beginning June 1 for wheat.44 USDA Long-term Pro j ections, Februar y 200 7 Table 13. U.S. soybean and products long-term projections Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Soybeans

Area (million acres): Planted 72.0 75.6 71.0 69.5 69.0 69.0 69.0 69.0 69.0 68.8 68.8 68.8 Harvested 71.3 74.5 69.9 68.4 67.9 67.9 67.9 67.9 67.9 67.7 67.7 67.7 Yield/harvested acre (bushels) 43.0 43.0 41. 5 42.0 42.4 42.9 43.3 43.8 44.2 44.7 45.1 45.6 Supply (million bushels) Beginning stocks, Sep. 1 256 449 565 355 237 235 237 234 232 235 233 229 Production 3,063 3,204 2,900 2,870 2,880 2,910 2,940 2,970 3,000 3,025 3,055 3,085 Imports 3 4 4 4 4 4 4 4 4 4 4 4 Total supply 3,322 3,657 3,469 3, 229 3,121 3,149 3,181 3,208 3,236 3,264 3,292 3,318 Disposition (million bushels) Crush 1,739 1,780 1,820 1,870 1,895 1,920 1,950 1,975 1,995 2,015 2,035 2,060 Seed and residual 188 166 144 143 146 147 147 151 151 152 152 153 Exports 947 1,145 1,150 980 845 845 850 850 855 865 875 875 Total disposition 2,874 3,091 3,114 2 ,993 2,886 2,912 2,947 2,976 3,001 3,032 3,062 3,088 Carryover stocks, Aug. 31 Total ending stocks 449 565 355 237 235 237 234 232 235 233 229 230 Stocks/use ratio, percent 15.6 18.3 11.4 7.9 8.1 8.1 7.9 7.8 7.8 7.7 7.5 7.4 Prices (dollars per bushel) Loan rate 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Soybean price, farm 5.66 5.90 7.00 7.25 7.30 7.00 6.90 6.80 6.80 6.75 6.75 6.75 Variable costs of production (dollars): Per acre 91 97 101 103 104 105 106 107 108 109 110 111 Per bushel 2.11 2.25 2.43 2.46 2.46 2.45 2.45 2.44 2.44 2.43 2.43 2.43 Returns over variable costs (dollars per acre): Net returns 153 157 190 201 205 195 193 191 193 193 195 197
Soybean oil (million pounds) Beginning stocks, Oct. 1 1,699 2,968 2,688 2 ,088 1,888 1,878 1,883 1,883 1,903 1,883 1,818 1,738 Production 20,393 20,115 20,750 21,365 21,670 21,975 22,335 22,645 22,895 23,140 23,390 23,700 Imports 35 55 125 135 145 155 165 175 185 195 205 215 Total supply 22,127 23,138 23,563 23,588 23 ,703 24,008 24,383 24,703 24,983 25,218 25,413 25,653 Domestic disappearance 18,009 19,200 20,500 20,825 21,125 21,425 21,725 22,025 22,325 22,625 22,925 23,225 Exports 1,150 1,250 975 875 700 700 775 775 775 775 750 725 Total demand 19,159 20,450 21,475 21,700 21 ,825 22,125 22,500 22,800 23,100 23,400 23,675 23,950 Ending stocks, Sep. 30 2,968 2,688 2,088 1 ,888 1,878 1,883 1,883 1,903 1,883 1,818 1,738 1,703 Soybean oil price (dollars per lb) 0.234 0. 260 0.300 0.315 0.320 0.315 0.310 0.305 0.305 0.305 0.305 0.305

Soybean meal (thousand short tons) Beginning stocks, Oct. 1 172 320 300 300 300 300 300 300 300 300 300 300 Production 41,241 42,415 43,285 44,535 45,135 45,710 46,435 46,960 47,435 48,010 48,485 49,060 Imports 140 165 165 165 165 165 165 165 165 165 165 165 Total supply 41,553 42,900 43,750 45,000 45 ,600 46,175 46,900 47,425 47,900 48,475 48,950 49,525 Domestic disappearance 33,283 34,100 34,450 34,750 35,200 35,675 36,150 36,625 37,100 37,575 38,050 38,525 Exports 7,950 8,500 9,000 9,950 10,100 10,200 10,450 10,500 10,500 10,600 10,600 10,700 Total demand 41,233 42,600 43,450 44,700 45 ,300 45,875 46,600 47,125 47,600 48,175 48,650 49,225 Ending stocks, Sep. 30 320 300 300 300 300 300 300 300 300 300 300 300 Soybean meal price (dollars per ton) 174.17 177.50 200.00 205.00 205.00 195.00 192.50 190.00 188.50 186.50 185.00 185.00
Crushing yields (pounds per bushel) Soybean oil 11.73 11.30 11.40 11.43 1 1.44 11.45 11.46 11.47 11.48 11.49 11.50 11.51 Soybean meal 47.44 47.66 47.60 47.60 47.60 47.60 47.60 47.60 47.60 47.60 47.60 47.60 Crush margin (dollars per bushel) 1.22 1.27 1.18 1.23 1.24 1.25 1.23 1.22 1.19 1.19 1.16 1.16 Note: Marketing year beginning September 1 for soybeans; October 1 for soybean oil and meal.USDA Long-term Projections, February 2007 45 Table 14. U.S. rice long-term projections, rough basis Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area (thousand acres):

Planted 3,384 2,841 3,100 3,040 3,045 3,050 3,065 3,070 3,075 3,080 3,085 3,090 Harvested 3,364 2,823 3,080 3,020 3,025 3,030 3,045 3,050 3,055 3,060 3,065 3,070

Yields (pounds per acre):

Yield/harvested acre 6,636 6,847 6,916 6,991 7,060 7,130 7,192 7,256 7,321 7,379 7,437 7,496
Supply and use (million cwt):

Beginning stocks 37.7 43.0 34.5 34.2 30.4 28.3 27.9 28.8 29.4 29.7 29.9 30.2 Production 223.2 193.3 213.0 211.1 213.6 216.0 219.0 221.3 223.7 225.8 227.9 230.1 Imports 17.1 18.0 18.5 19.1 19.6 20.2 20.8 21.5 22.1 22.8 23.4 24.1 Total supply 278.1 254.3 266.0 264.4 263.6 264.5 267.7 271.6 275.2 278.2 281.3 284.4

Domestic use and residual 119.3 122.8 124.8 126.0 127.3 128.6 129.9 131.2 132.5 133.8 135.1 136.5 Exports 115.8 97.0 107.0 108.0 108.0 108.0 109.0 111.0 113.0 114.5 116.0 117.5 Total use 235.1 219.8 231.8 234.0 235.3 236.6 238.9 242.2 245.5 248.3 251.1 254.0

Ending stocks (million cwt.) 43.0 34.5 34.2 30.4 28.3 27.9 28.8 29.4 29.7 29.9 30.2 30.4 Stocks/use ratio, percent 18.3 15.7 14.8 13.0 12.0 11.8 12.1 12.1 12.1 12.1 12.0 12.0

Milling rate, percent 70.3 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0

Prices (dollars per cwt.):

World price 6.21 7.00 7.20 7.45 7.70 7.85 8.01 8.13 8.25 8.37 8.50 8.63 Average market price 7.62 9.25 8.95 8.95 9.20 9.35 9.41 9.43 9.50 9.60 9.70 9.83 Loan rate 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50 6.50

Variable costs of production (dollars):

Per acre 399 421 437 447 454 459 465 470 476 482 488 495 Per cwt. 6.01 6.16 6.32 6.40 6.43 6.44 6.46 6.48 6.51 6.54 6.57 6.60

Returns over variable costs (dollars per acre):

Net returns 126 212 182 179 196 208 212 214 219 226 233 242 Note: Marketing year beginning August 1 for rice.46 USDA Long-term Pro j ections, Februar y 200 7 Table 15. U.S. upland cotton long-term projections Item 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area (million acres):

Planted acres 14.0 15.0 13.7 13.5 13.5 13.6 13.7 13.7 13.8 13.8 13.8 13.8 Harvested acres 13.5 12.5 12.4 12.3 12.3 12.4 12.5 12.5 12.5 12.5 12.6 12.6

Yields (pounds per acre):

Yield/harvested acre 825 788 800 810 820 830 840 850 855 860 865 870

Supply and use (thousand bales):

Beginning stocks 5,482 5,981 5,912 4,850 4,400 4,150 4,300 4,650 4,900 5,150 5,300 5,550 Production 23,260 20,510 20,700 20,800 21,000 21,400 21,900 22,100 22,300 22,400 22,700 22,800 Imports 9 10 10 10 10 10 10 10 10 10 10 10 Supply 28,751 26,501 26,622 25,660 25,410 25,560 26,210 26,760 27,210 27,560 28,010 28,360

Domestic use 5,837 5,150 5,050 4,950 4,850 4,750 4,650 4,550 4,450 4,450 4,450 4,450 Exports 17,437 15,450 16,700 16,300 16,400 16,500 16,900 17,300 17,600 17,800 18,000 18,150 Total use 23,274 20,600 21,750 21,250 21,250 21,250 21,550 21,850 22,050 22,250 22,450 22,600

Ending stocks 5,981 5,912 4,850 4,400 4,150 4,300 4,650 4,900 5,150 5,300 5,550 5,750 Stocks/use ratio, percent 25.7 28.7 22.3 20.7 19.5 20.2 21.6 22.4 23.4 23.8 24.7 25.4

Prices (dollars per pound):

Farm price 1 0.477 --- --- --- --- --- --- --- --- --- --- --- Loan rate 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52

Variable costs of production (dollars):

Per acre 361 372 390 400 406 410 414 419 423 428 433 438 Per pound 0.44 0.47 0.49 0.49 0.49 0.49 0.49 0.49 0.49 0.50 0.50 0.50

Returns over variable costs (dollars per acre):

Net returns 2 196 144 144 147 156 161 162 166 165 160 155 153 Note: Marketing year beginning August 1 for upland cotton. 1/ USDA is prohibited from publishing cotton price projections. 2/ Net returns include estimates of marketing loan benefits.USDA Long-term Projections, February 2007 47 Table 16. U.S. sugar long-term projections 1/ Item Units 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Sugarbeets Planted area 1,000 acres 1,300 1,362 1,260 1,222 1,197 1,186 1,190 1,194 1,196 1,197 1,198 1,199 Harvested area 1,000 acres 1,243 1,306 1,231 1,121 1,151 1,143 1,153 1,160 1,163 1,164 1,164 1,165 Yield Tons/acre 22.2 25.8 23.2 23.4 23.7 23.9 24.1 24.3 24.5 24.7 24.9 25.1 Production Mil. s. tons 27.5 33.6 28.6 26.3 27.2 27.3 27.7 28.2 28.5 28.7 29.0 29.2

Sugarcane Harvested area 1,000 acres 858 860 844 790 824 822 824 824 825 824 825 825 Yield Tons/acre 28.7 31.8 34.3 34.5 34.5 34.6 34.7 34.8 34.9 35.0 35.1 35.2 Production Mil. s. tons 24.6 27.3 28.9 27.3 28.4 28.4 28.6 28.7 28.8 28.8 28.9 29.0

Supply: Beginning stocks 1,000 s. tons 1,332 1,761 1,870 2,379 2,013 1,986 1,948 1,926 1,916 1,914 1,914 1,914 Production 1,000 s. tons 7,399 8,518 8,402 7,853 8,205 8,254 8,389 8,506 8,607 8,697 8,785 8,875 Beet sugar 1,000 s. tons 4,444 4,901 4,453 4,114 4,282 4,307 4,400 4,483 4,553 4,612 4,669 4,726 Cane sugar 1,000 s. tons 2,955 3,617 3,949 3,739 3,923 3,947 3,989 4,022 4,055 4,085 4,116 4,149 Total imports 1,000 s. tons 3,443 2,206 2,752 2,433 2,512 2,490 2,412 2,351 2,301 2,259 2,215 2,166

TRQ imports 1,000 s. tons 2,588 1,821 1,437 1,244 1,244 1,244 1,244 1,244 1,244 1,244 1,244 1,244 Total supply 1,000 s. tons 12,174 12,485 13,024 12,712 12,730 12,731 12,749 12,782 12,824 12,869 12,914 12,955

Use: Exports 1,000 s. tons 203 200 200 200 200 200 200 200 200 200 200 200 Domestic deliveries 1,000 s. tons 10,326 10,415 10,445 10,499 10,544 10,583 10,623 10,666 10,710 10,755 10,800 10,845 Miscellaneous 1,000 s. tons -116 00000000000 Total use 1,000 s. tons 10,413 10,615 10,645 10,699 10,744 10,783 10,823 10,866 10,910 10,955 11,000 11,045

Ending stocks 1,000 s. tons 1,761 1,870 2,379 2,013 1,986 1,948 1,926 1,916 1,914 1,914 1,914 1,909 CCC Acquisitions 1,000 s. tons 0 46 497 -362 -20 -35 -21 -5 3 5 4 0 Private Ending Stocks 1,000 s. tons 1,761 1,824 1,836 1,833 1,826 1,822 1,822 1,817 1,812 1,807 1,803 1,798 CCC Ending Stocks 1,000 s. tons 0 46 543 180 160 125 104 99 102 107 111 111 Stocks/use ratio Percent 16.9 17.6 22.4 18.8 18.5 18.1 17.8 17.6 17.5 17.5 17.4 17.3

Raw sugar price:

New York (No. 14) Cents/lb. 22.62 20.79 20.77 20.77 20.77 20.77 20.75 20.75 20.75 20.75 20.74 20.74 Raw sugar loan rate Cents/lb. 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 18.00 Beet sugar loan rate Cents/lb. 22.90 22.90 22.90 22.90 22.90 22.90 22.90 22.90 22.90 22.90 22.90 22.90 Grower prices:

Sugarbeets Dol./ton 41.30 36.16 33.33 31.71 32.97 33.45 33.98 34.38 34.67 34.90 35.12 35.36 Sugarcane Dol./ton 27.90 29.91 30.57 30.71 30.83 30.96 31.07 31.19 31.30 31.41 31.52 31.63 1/ Fiscal years, October 1 through September 30.48 USDA Long-term Pro j ections, Februar y 200 7 Table 17. Flue-cured tobacco long-term projections Item Unit 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area, yield, and production:

Planted area 1,000 acres 176 208 214 213 218 217 222 221 226 225 227 229 Harvested area 1,000 acres 176 208 214 213 218 217 222 221 226 225 227 229 Yield lbs./acre 2,182 2,185 2,200 2,250 2,250 2,300 2,300 2,350 2,350 2,400 2,400 2,400 Production Mil. lbs. 383 455 470 480 490 500 510 520 530 540 545 550

Supply:

Beginning stocks Mil. lbs. 1,050 1,089 936 826 736 663 598 548 508 483 468 463 Marketings Mil. lbs. 383 455 470 480 490 500 510 520 530 540 545 550 Imports Mil. lbs. 161 165 165 170 172 175 175 175 170 165 160 155 Total 1 Mil. lbs. 1,594 1,708 1,571 1,476 1,398 1,338 1,283 1,243 1,208 1,188 1,173 1,168

Use:

Domestic Mil. lbs. 505 485 475 465 460 460 455 450 440 430 420 410 Exports Mil. lbs. 258 267 270 275 275 280 280 285 285 290 290 295 Total 1 Mil. lbs. 764 752 745 740 735 740 735 735 725 720 710 705

Ending stocks: Total Mil. lbs. 1,089 936 826 736 663 598 548 508 483 468 463 463

Price:

Avg. to growers $/cwt 147 155 168 170 175 180 180 180 180 180 180 180 1/ Includes both domestically grown and imported tobacco leaf.

Table 18. Burley tobacco long-term projections Item Unit 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Area, yield, and production:

Planted area 1,000 acres 100 104 111 116 118 124 128 135 140 146 148 151 Harvested area 1,000 acres 100 104 111 116 118 124 128 135 140 146 148 151 Yield lbs./acre 2,031 2,097 2,200 2,200 2,250 2,250 2,300 2,300 2,325 2,325 2,325 2,325 Production Mil. lbs. 203 217 245 255 265 280 295 310 325 340 345 350

Supply:

Beginning stocks Mil. lbs. 777 639 547 477 412 353 303 263 233 218 218 218 Marketings Mil. lbs. 203 217 245 255 265 280 295 310 325 340 345 350 Imports Mil. lbs. 191 190 185 180 175 170 165 165 165 165 165 165 Total 1 Mil. lbs. 1,171 1,047 977 912 852 803 763 738 723 723 728 733

Use:

Domestic Mil. lbs. 323 290 287 285 282 280 277 280 280 280 282 285 Exports Mil. lbs. 209 210 213 215 218 220 223 225 225 225 228 230 Total 1 Mil. lbs. 532 500 500 500 500 500 500 505 505 505 510 515

Ending stocks: Total Mil. lbs. 639 547 477 412 353 303 263 233 218 218 218 218

Price:

Avg. to growers $/cwt 156 165 170 175 180 185 190 190 190 190 190 190 1/ Includes both domestically grown and imported tobacco leaf.USDA Long-term Projections, February 2007 49 Table 19. Horticultural crops long-term projections: Production, values, and prices, calendar years Item Unit 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Acreage 1 : Fruit and nuts Citrus 1,000 acres 946 878 882 886 891 895 900 904 909 913 918 923 Noncitrus 2 1,000 acres 2,095 2,099 2,103 2,108 2,112 2,116 2,120 2,125 2,129 2,133 2,137 2,142 Tree nuts 1,000 acres 946 956 965 975 985 995 1,005 1,015 1,025 1,035 1,045 1,056 Total fruit and nuts 1,000 acres 3,987 3,933 3,951 3,969 3,987 4,006 4,025 4,043 4,062 4,081 4,101 4,120

Vegetables and melons Fresh market 3 1,000 acres 2,028 2,038 2,048 2,058 2,069 2,079 2,089 2,100 2,110 2,121 2,131 2,142 Processing 1,000 acres 1,286 1,273 1,260 1,248 1,235 1,223 1,211 1,199 1,187 1,175 1,163 1,151 Potatoes 1,000 acres 1,087 1,119 1,120 1,121 1,122 1,123 1,125 1,126 1,127 1,128 1,129 1,130 Pulses 1,000 acres 2,763 2,829 2,458 2,495 2,532 2,570 2,609 2,648 2,688 2,728 2,769 2,810 Total vegetables 1,000 acres 7,164 7,259 6,887 6,922 6,958 6,996 7,033 7,072 7,111 7,152 7,192 7,234

Total horticulture crops 4 1,000 acres 11,343 11,382 11,026 11,078 11,131 11,184 11,239 11,295 11,352 11,409 11,468 11,528

Production, farm value: Fruit and nuts Citrus $ Mil. 2,303 2,680 2,720 2,761 2,802 2,844 2,887 2,930 2,974 3,019 3,064 3,110 Noncitrus $ Mil. 9,955 10,244 10,541 10,847 11,161 11,485 11,818 12,161 12,513 12,876 13,250 13,634 Tree nuts $ Mil. 3,967 4,110 4,258 4,411 4,570 4,734 4,905 5,082 5,264 5,454 5,650 5,854 Total fruit and nuts $ Mil. 16,226 17,033 17,519 18,018 18,533 19,063 19,610 20,172 20,752 21,349 21,964 22,597 Vegetables and melons Fresh market $ Mil. 10,945 11,251 11,139 11,451 11,771 12,101 12,440 12,788 13,146 13,514 13,893 14,282 Processing 5 $ Mil. 2,052 2,062 2,072 2,082 2,093 2,103 2,114 2,124 2,135 2,146 2,156 2,167
Potatoes 6 $ Mil. 2,903 2,965 3,028 3,092 3,158 3,226 3,295 3,366 3,439 3,514 3,590 3,668 Total vegetables $ Mil. 15,900 16,278 16,238 16,625 17,022 17,430 17,849 18,279 18,720 19,174 19,639 20,117
Nursery/greenhouse 7 $ Mil. 16,202 16,562 16,949 17,345 17,750 18,165 18,590 19,024 19,469 19,924 20,391 20,868 Floriculture $ Mil. 5,363 5,452 5,561 5,673 5,786 5,902 6,020 6,140 6,263 6,388 6,516 6,646 Nursery and other $ Mil. 10,839 11,110 11,388 11,672 11,964 12,263 12,570 12,884 13,206 13,536 13,875 14,221 Total, horticultural crops $ Mil. 48,767 50,314 51,149 52,433 53,752 55,107 56,498 57,927 59,395 60,902 62,451 64,042 Production, farm weight: Fruit and nuts Citrus Mil. lbs. 23,148 23,168 23,377 23,586 23,793 24,000 24,207 24,415 24,624 24,833 25,043 25,252 Noncitrus Mil. lbs. 36,655 36,988 37,322 37,654 37,986 38,316 38,646 38,979 39,312 39,646 39,980 40,315 Tree nuts Mil. lbs. 2,966 3,010 3,056 3,101 3,148 3,195 3,243 3,292 3,341 3,391 3,442 3,494 Total fruit and nuts Mil. lbs. 62,769 63,166 63,755 64,342 64,927 65,511 66,096 66,685 67,277 67,871 68,465 69,061 Vegetables and melons Fresh market Mil. lbs. 49,555 49,059 49,502 49,944 50,383 50,821 51,259 51,700 52,142 52,585 53,029 53,472 Processing 5 Mil. lbs. 36,528 36,860 37,193 37,524 37,854 38,183 38,513 38,844 39,176 39,509 39,842 40,175 Potatoes 6 Mil. lbs. 42,393 43,479 44,046 44,471 44,898 45,328 45,761 46,198 46,638 47,082 47,529 47,979 Total vegetables Mil. lbs. 128,476 129,398 130,741 131,939 133,136 134,333 135,533 136,742 137,956 139,176 140,400 141,627
Total, horticultural crops Mil. lbs. 191,523 192,840 194,769 196,551 198,331 200,109 201,892 203,687 205,490 207,301 209,117 210,936 Producer prices 8
Fruit and nuts Citrus 2000=100 136.8 159.0 160.0 160.9 161.9 162.9 163.9 165.0 166.0 167.1 168.2 169.3 Noncitrus 2000=100 129.9 132.5 135.1 137.8 140.5 143.4 146.3 149.2 152.3 155.4 158.5 161.8 Tree nuts 2000=100 194.2 198.2 202.3 206.5 210.7 215.1 219.6 224.1 228.7 233.5 238.3 243.2 Total fruit and nuts 2000=100 161.8 168.8 172.0 175.3 178.6 182.1 185.7 189.3 193.0 196.9 200.8 204.8 Vegetables Fresh market 2000=100 109.1 113.3 111.2 113.3 115.4 117.7 119.9 122.2 124.6 127.0 129.4 132.0 Processing 2000=100 102.3 101.9 101.5 101.1 100.7 100.3 100.0 99.6 99.3 98.9 98.6 98.3 Potatoes 2000=100 135.8 135.2 136.3 137.9 139.5 141.1 142.8 144.5 146.2 148.0 149.8 151.6 Total vegetables 2000=100 116.7 118.7 117.2 118.9 120.6 122.4 124.2 126.1 128.0 130.0 132.0 134.0 All fruit, nuts, vegetables 2000=100 134.4 138.3 138.7 141.1 143.4 145.9 148.4 150.9 153.5 156.2 158.9 161.7 1/ Bearing acreage for fruit and nuts; harvested area for vegetables . 2/ Includes olives; excludes melons. 3/ Includes melons , sweet potatoes, mushrooms, and dualuse crops which do not separate fresh-market from processing. 4/ Includes other crops (floriculture, hops, peppermint and spea rmint oils, and Hawaiian tropical crops). 5/ Includes pulses (dry edible beans, peas, and lentils) and processing agaricus mushrooms. 6/ Includes seed, feed, own farm u se, or unutilized potatoes. 7/ Includes some fresh-market vegetables grown in greenhouses, such as tomatoes, cucumbers, and colored peppers. From USDA, Economic Resea rch Service. 8/ Computed from unit values of production, or production value divided by production volume. Data source: USDA, National Agricultural Statistics Service50 USDA Long-term Pro j ections, Februar y 200 7 Table 20. Horticultural crops long-term projections: Exports and imports, fiscal years Item Unit 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Exports Fruit and nuts Fresh fruits $ Mil. 2,559 2,842 3,000 3,071 3,144 3,220 3,297 3,377 3,459 3,544 3,631 3,720 Citrus $ Mil. 627 673 700 702 704 706 708 711 713 715 717 719 Noncitrus $ Mil. 1,931 2,169 2,300 2,369 2,440 2,513 2,589 2,666 2,746 2,829 2,914 3,001 Processed fruits $ Mil. 1,535 1,738 1,800 1,836 1,873 1,910 1,948 1,987 2,027 2,068 2,109 2,151 Fruit juices $ Mil. 766 892 900 923 946 969 993 1,018 1,044 1,070 1,097 1,124 Tree nuts $ Mil. 2,429 2,926 3,300 3,399 3,501 3,606 3,714 3,826 3,940 4,059 4,180 4,306 Total fruit and nuts $ Mil. 6,523 7,506 8,100 8,306 8,518 8,736 8,960 9,190 9,426 9,670 9,920 10,177

Vegetables Fresh $ Mil. 1,567 1,630 1,700 1,751 1,804 1,858 1,913 1,971 2,030 2,091 2,154 2,218 Processed 1 $ Mil. 1,958 2,181 2,300 2,346 2,393 2,441 2,490 2,539 2,590 2,642 2,695 2,749 Total vegetables $ Mil. 3,526 3,810 4,000 4,097 4,196 4,298 4,403 4,510 4,620 4,733 4,848 4,967

Other horticulture

Nursery/greenhouse $ Mil. 295 310 330 340 349 360 370 381 392 403 415 427 Essential oils $ Mil. 1,031 1,041 1,100 1,134 1,169 1,206 1,243 1,281 1,321 1,362 1,404 1,448 Wine $ Mil. 728 786 850 884 919 956 994 1,034 1,076 1,119 1,163 1,210 Beer $ Mil. 195 207 220 221 222 223 224 226 227 228 229 230 Other 2 $ Mil. 2,577 3,006 3,800 3,952 4,110 4,274 4,445 4,623 4,808 5,001 5,201 5,409

Total horticulture $ Mil. 14,875 16,665 18,400 18,934 19,485 20,053 20,640 21,245 21,870 22,515 23,180 23,867

Fresh produce $ Mil. 4,126 4,472 4,700 4,822 4,948 5,077 5,210 5,348 5,489 5,634 5,784 5,938 Processed $ Mil. 10,453 11,884 13,370 13,772 14,188 14,616 15,059 15,517 15,989 16,477 16,981 17,502

Processed share 3 Percent 70 71 73 73 73 73 73 73 73 73 73 73 Export share of production Percent 31 33 36 36 36 37 37 37 37 37 37 38 Imports Fruit and nuts Fresh fruits $ Mil. 4,219 4,689 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 Citrus $ Mil. 335 398 500 525 551 579 608 638 670 704 739 776 Noncitrus $ Mil. 3,884 4,291 4,500 4,631 4,765 4,903 5,045 5,191 5,342 5,497 5,656 5,820 Processed fruits $ Mil. 2,343 2,603 2,800 2,867 2,936 3,006 3,079 3,153 3,228 3,306 3,385 3,466 Fruit juices $ Mil. 1,005 1,056 1,100 1,129 1,158 1,188 1,219 1,251 1,283 1,317 1,351 1,386 Tree nuts $ Mil. 1,155 1,070 1,100 1,140 1,181 1,223 1,267 1,313 1,360 1,409 1,460 1,512 Total fruit and nuts $ Mil. 7,718 8,363 8,900 9,157 9,421 9,693 9,973 10,262 10,558 10,864 11,179 11,502

Vegetables Fresh $ Mil. 3,518 3,979 4,300 4,494 4,696 4,907 5,128 5,359 5,600 5,852 6,115 6,390 Processed 1 $ Mil. 2,621 2,755 2,900 3,016 3,137 3,262 3,393 3,528 3,669 3,816 3,969 4,128 Total vegetables $ Mil. 6,139 6,734 7,200 7,510 7,832 8,169 8,520 8,887 9,269 9,668 10,084 10,518

Other horticulture

Nursery/greenhouse $ Mil. 1,374 1,423 1,500 1,557 1,616 1,678 1,741 1,807 1,876 1,947 2,021 2,098 Essential oils $ Mil. 2,435 2,469 2,500 2,568 2,637 2,708 2,781 2,856 2,933 3,013 3,094 3,177 Wine $ Mil. 3,720 4,043 4,400 4,602 4,814 5,036 5,267 5,509 5,763 6,028 6,305 6,595 Beer $ Mil. 2,978 3,375 3,500 3,623 3,749 3,881 4,016 4,157 4,302 4,453 4,609 4,770 Other 2 $ Mil. 2,515 2,782 3,200 3,360 3,528 3,704 3,890 4,084 4,288 4,503 4,728 4,964

Total horticulture $ Mil. 26,879 29,189 31,200 32,376 33,598 34,868 36,189 37,563 38,991 40,476 42,020 43,626

Fresh produce $ Mil. 7,738 8,668 9,300 9,644 10,000 10,371 10,755 11,155 11,570 12,001 12,449 12,914 Processed $ Mil. 17,767 19,098 20,400 21,175 21,981 22,820 23,693 24,600 25,545 26,527 27,549 28,613

Processed share 3 Percent 66 65 65 65 65 65 65 65 66 66 66 66 Import share of consumption Percent 44 47 49 49 50 50 50 51 51 52 52 52 1/ Includes dry edible beans, peas, lentils, and potatoes. 2/ Includes other beverages, hops, ginseng, sauces, condiments, foo d preparations, yeast, starches, etc. 3/ Includes beverages; excludes fresh fruits and vegetables, and nursery/greenhouse crops. Exports are free alongside ship (FAS) value at U.S. port of exportation. Imports are customs value at U.S. port of entry. Data source: U.S. Department of Commerce, Bureau of the Census.USDA Long-term Projections, February 2007 51 

### Livestock Projections for the livestock sector reflect produc tion adjustments in response to sharply higher grain prices due to the expansi on of corn-based ethanol producti on. Returns to U.S. meat and poultry production fall from those 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 e xpansion in the sector and a resumption in meat production gains.

40 50 60 70 80 90 100 110 120

1980 1985 1990 1995 2000 2005 2010 2015 10 15 20 25 30 35 40 45 Livestock inventories and broiler production
Cattle and hogs, million head

Cattle

Hogs Broilers Broilers, billion pounds

Production of all meats slows or dec lines in the first half of the projection period, reflecting higher feed costs as more corn is used in ethanol pr oduction. Distillers grains , a coproduct of ethanol production, can be used in livestock rations, subs tituting for corn and sometimes for soybean meal (see box, page 52).

• Higher grain prices in tande m with drought impacts in 2006 hold down cattle inventories, pushing U.S. beef production down in 2009-11. Pr oduction then rises in the remainder of the projection period as returns improve. The cattle inventory remains in a range of 97-99 million head through 2011, and then expands to over 102 million by 2016. Rising slaughter weights augment this herd expansi on, leading to annual be ef production gains of 1 percent or more starting in 2013. Higher costs of feedlot gain will result in stocker cattle remaining on pasture to heavier we ights before entering feedlots.

• Pork production declines in 2008- 10 in response to higher feed prices and then grows for several years as higher hog prices improve returns. Expansion slows again at the end of the projections as returns narrow. Production coordination and ma rket integration between the United States and Canada continue in the hog se ctor. Canada is the major supplier of live swine imported by the United States. Imported feeder pigs from Cana da are finished and processed in the United States, where both finishing and processing costs are lower.

• Poultry production continues to rise, but le ss rapidly than during the 1990s due to the maturity of domestic demand, slower export grow th, and adjustment to higher feed costs.52 USDA Long-term Pro j ections, Februar y 200 7 Livestock Sector Use of Distillers Grai ns, a Coproduct of Ethanol Production With the expansion of the U.S. ethanol industry and higher prices for corn, a reduced share of the corn crop is used directly for domestic livestock f eeding. However, a coproduct of ethanol production, distillers grains, may substitute for corn in some lives tock rations, particularly for beef and dairy cattle. Cattle feedlots located close to an ethanol plant w ill benefit from a steady supply of distillers grains. Meanwhile, distillers grains are less suitable in poultr y and hog rations. The divergent effects of ethanol expansion on the different categories of livestock and in different regions of the country could result in structural changes in some parts of the U.S. livesto ck sector. For each 56-pound bushel of corn used in the production of ethanol, about 17.5 pounds of dried distillers grains are produced. (See box, page 22, for additional discussion of domestic biofuel issues.) The use of distillers grains in livestock feeding and their overall substitution for direct corn feed use in the projections reflect a number of important underlying assumptions.

• The projections assume that 75 percent of distillers grains is used in domestic livestock sector feeding. Exports of distillers grains are assu med to account for 10 percent of production. The remaining 15 percent of production is assumed to go to other nonfeed, domestic uses.

• Of the portion of distillers grains used for domestic livestock feeding, 80 percent is assumed to be used for beef cattle, 10 percent for dairy, an d 5 percent each for poultry and hogs. These assumptions reflect the relatively easier use of distillers grains by ruminants compared to monogastric animals. The high usage by beef cattle also reflects the ability of those animals to use the wet form of distillers grains.

• Based on the animal nutrition studies listed below, distillers grains on a dry matter basis are assumed to replace corn in rations of beef cattle pound for pound; dairy rations, 1 pound distillers grains for 0.45 pound corn; hog rations, 1 pound distillers grai ns for 0.85 pound corn; and poultry rations, 1 pound distillers grains for 0.55 pound corn. For each animal type, other ration components are adjusted to rebalance the ration. Protein adjustments affect soybean meal feeding for hogs, poultry, and dairy cattle. Most distillers grains used fo r cattle feeding displace urea as the protein source rather than soybean meal. Using these assumptions, each bushel of corn used to produce ethanol results in a reduction of about a fifth of a bushel of direct corn feeding due to the us e of distillers grains in rations. Since beef cattle are assumed to be the largest users of distillers grains, onl y a small offset is expected in soybean meal use.
References Anderson, J. L., D. J. Schingoethe, K. F. Kalscheur, and A. R. Hippen. “Evaluation of dried and wet distillers grains included at two concentrati ons in the diets of lactating dairy cows,” Journal of Dairy Science , 2006, Volume 89, pp. 3133-42. Lumpkins, B. S., A. B. Batal, and N. M. Dale. “Evalu ation of Distillers Dried Grains with Solubles as a Feed Ingredient for Broilers,” Poultry Science , 2004, Volume 83, pp. 1891-96. Shurson, Jerry, Mindy Spiehs, Jennifer Wilson, and Mark Whitney. “Value and use of ‘new generation’ distiller’s dried grains with solubles in swine diets,” Alltech’s 19 th International Feed Industry Symposium Proceedings , May 2003. Vander Pol, Kyle J., Galen E. Erickson, Terry J. Klopfenstein, Matt A. Greenquist, and Thomas Robb. “Effect of Dietary Inclusion of Wet Distillers Grains on Feedlot Performance of Finishing Cattle and Energy Value Relative to Corn,” 2006 Nebraska Beef Cattle Report , pp. 51-53.USDA Long-term Projections, February 2007 53 30 40 50 60 70 80 90 100

1985 1990 1995 2000 2005 2010 2015 Per capita meat consumption
Retail weight, pounds per capita

Beef Broilers

Pork

Annual per capita consumption of red meats and poultry falls from 223 pounds in 2007 to a low of 213 pounds in 2012, reflecting livestock sector producti on adjustments to higher feed costs due to increased ethanol production as we ll as gains in meat and poultry exports. Per capita consumption of red meats and poultry then resumes growth but, at about 219 pounds in 2016, remains lower than in recent years.

• Per capita beef consumption declines thr ough the first half of the projection period reflecting lower production due to drought in 2006 and adjustments in the industry to higher feed costs and reduced re turns. Use of distillers grains in cattle rations and reductions in corn prices later in the projecti ons lead to production gains and increases in per capita beef consumption in 2013-16.

• Although U.S. beef exports do not return to th e levels reached prior to the December 2003 discovery of bovine spongiform encephalopa thy (BSE) in Washington State, a gradual rebuilding of U.S. beef exports to Japan a nd South Korea is assumed in the projections, further limiting domestic per capita beef consumption.

• Strong demand for consistent, high-quality b eef continues in the domestic hotel and restaurant market, and increasi ngly in the retail market. Beef export markets are also primarily for high-quality beef. An importa nt development will be how beef quality is affected by the increased use of distill ers grains in beef cattle rations.

• Higher feed costs lead to reductions in por k production which combine with rising pork exports to push per capita pork consumpti on down through 2011. A gradual rebound in per capita pork consumption occurs over th e remainder of the projection period.

• Poultry prices remain lower than red meat prices. However, as returns are squeezed, production gains slow and per capita consumpti on declines for several years. Following these adjustments, production strengthens a nd per capita poultry consumption resumes growth later in the projections.54 USDA Long-term Pro j ections, Februar y 200 7 30 40 50 60 70 80 90 100

1990 1995 2000 2005 2010 2015 Nominal livestock prices
Dollars per hundredweight

Beef cattle: Choice steers, Nebraska

Broilers: 12-city market price

Hogs: National base

Livestock prices are projected to move to higher levels followi ng near-term production adjustments in the sector in re sponse to higher feed costs. As production rebounds later in the projections, prices decline somewhat although they remain historically high.

0.0 0.5 1.0 1.5 2.0 2.5

1990 1995 2000 2005 2010 2015 Poultry Pork Beef Percent of U.S. income spent on meat

Percent

Rising incomes facilitate gains in consumer spending on meat. Nonetheless, overall meat expenditures represent a declining proportion of disposable income, c ontinuing a long-term trend.USDA Long-term Projections, February 2007 55 0 2 4 6 8 10 12

1990 1995 2000 2005 2010 2015 Beef
Pork Poultry U.S. meat exports
Billion pounds

Although the domestic market remains the dominant s ource of overall meat demand, exports account for a growing share U.S. meat use. Despite higher prices, U.S. meat exports rise throughout the projections as global economic growth supports increases in demand. Beef

• U.S. beef exports primarily reflect demand for high-qua lity fed beef, with most U.S. beef exports typically going to Mexico, Canada, and markets in Pacific Rim nati ons. U.S. beef exports are projected to rise slowly as a gradual recovery is assumed in the Japanese and S outh Korean export markets lost following the first U.S. BSE case in December 2003.

• U.S. imports of processing beef from Australia and New Zealand increase in the projections. With more of demand in the East Asian market being met by U.S. beef exports, exports to that market 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 expor ts does not reach levels of 2000-03. Pork

• U.S. pork exports continue to benefit from lower le vels of beef exports as import demand shifts among competing meats. Pacific Rim nations and Mexico remain key markets for long-term growth of U.S. pork exports. Canada continues to be a competitor in these markets. Brazil also is a major pork exporter. However, the projections assume that Brazil will not be recognized as free of foot-and-mouth disease (FMD) nationwide, thus limiting Brazilian pork prod ucers’ ability to compet e in some markets. Consequently, Brazil’s pork exports expand to markets with less stringent import restrictions regarding FMD, including Russia, Argentina, and Asian markets other than Japan and South Korea.

• Despite higher feed costs, increased efficiency in U.S. pork production limits production-cost increases and enhances the competitiveness of U.S. pork produc ts. Nonetheless, longer term gains in U.S. pork exports will be determined by costs of produc tion and environmental regulations relative to competitors. Such costs tend to be lower in c ountries with pork industries in the early stages of development and integration, such as Brazil. Poultry

• U.S. broiler export growth is expected to slow fro m the rate of the 1990s. Major U.S. export markets include Asia, Russia, and Mexico. Gains in these markets reflect strong economic growth and rising consumer demand for meats. Demand for poultry also re mains strong due to its lower cost relative to beef and pork. U.S. producers will face strong compe tition from other major broiler exporting countries, particularly Brazil. Poultry exports from countries affected by avian influenza, such as Thailand and China, are expected to be limited to fully cooked products.56 USDA Long-term Pro j ections, Februar y 200 7 0 5 10 15 20 25

1985 1990 1995 2000 2005 2010 2015 0 50 100 150 200 Milk production and dairy herd
Million cows and 1,000 pounds per cow

Milk production

Milk cows Output per cow Production, billion pounds

Relatively high farm milk prices in 2004-05 en couraged increases in milk cow numbers in 2005-06. Combined with an upward trend in output per cow, this resulted in relatively strong gains in milk production in 2005-06 and reductions in milk prices. Smaller production gains are projected over the rest of the pr ojection period, particularly in the next several years as the sector adjusts to higher feed costs.

• Milk output per cow is projected to increase, although some slowing in these gains occurs early in the projection period in response to higher feed co sts. 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 2 006, with the largest reductions in 2008- 10 as feed costs rise. Longer term reductions are smaller as increasing specialization of dairy farms over time slows exit rates from m ilk production compared with past decades.

• Commercial use increases sligh tly faster than the growth in population, reflecting slow growth in domestic demand for dairy products . Cheese and butter demand benefit from greater consumption of prepared foods and in creased away-from-home eating. Per capita consumption of fluid milk, however, is expe cted to continue to decline slowly.

• Farm-level milk prices increase after 2006 as milk production gains are smaller than those in 2005-06. Price increases are largest through 2011 as the sector adjusts to higher feed costs. Milk price increases ar e then projected to be less than the general inflation rate through the rest of the projections.

Note: Milk price projections do not reflect interim changes to the manufacturing allowance announced December 29, 2006.USDA Long-term Projections, February 2007 57 Table 21. Per capita meat consumption, retail weight Item 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Pounds
Total beef 65.3 65.5 66.5 65.8 64.4 62.8 62.0 61.6 61.6 62.3 62.9 63.2 Total veal 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4 Total pork 50.0 49.5 50.9 49.1 48.0 47.3 47.0 47.1 47.4 47.9 48.4 48.7 Lamb and mutton 1.1 1.0 1.1 1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Total red meat 117.0 116.5 119.0 116.5 114.1 111.7 110.5 110.2 110.5 111.6 112.7 113.3

Broilers 85.7 86.9 86.4 86.9 86.6 86.0 85.4 85.4 85.8 86.7 87.3 87.8 Other chicken 1.3 1.2 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 Turkeys 16.7 16.8 16.7 17.0 16.8 16.6 16.5 16.5 16.5 16.5 16.5 16.5 Total poultry 103.7 105.0 104.5 105.2 104.7 104.0 103.2 103.2 103.6 104.5 105.1 105.7

Red meat & poultry 220.7 221.5 223.4 221.8 218.8 215.7 213.8 213.3 214.1 216.1 217.8 218.9

Table 22. Consumer expenditures for meats Item 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Beef, dollars per person 267.18 260.63 263.25 269.09 276.59 280.46 284.71 285.66 285.94 289.05 292.24 295.30 Percent of income 0.87 0.80 0.77 0.75 0.74 0.72 0.70 0.67 0.64 0.62 0.60 0.58 Percent of meat expenditures 46.40 47.02 47.28 47.03 46.71 46.12 45.78 45.36 45.06 45.12 45.13 45.02

Pork, dollars per person 141.49 139.02 140.46 142.29 144.84 147.68 149.78 152.72 155.08 156.65 158.49 160.65 Percent of income 0.46 0.43 0.41 0.40 0.39 0.38 0.37 0.36 0.35 0.34 0.33 0.32 Percent of meat expenditures 24.57 25.08 25.22 24.87 24.46 24.29 24.08 24.25 24.44 24.45 24.48 24.49

Broilers, dollars per person 149.24 135.68 134.85 142.36 152.08 160.91 168.30 172.32 174.67 176.52 178.81 182.27 Percent of income 0.48 0.42 0.40 0.40 0.41 0.41 0.41 0.40 0.39 0.38 0.37 0.36 Percent of meat expenditures 25.92 24.48 24.22 24.88 25.68 26.46 27.06 27.36 27.53 27.56 27.61 27.79

Turkeys, dollars per person 17.89 18.92 18.27 18.43 18.65 18.99 19.12 19.07 18.84 18.39 17.98 17.69 Percent of income 0.06 0.06 0.05 0.05 0.05 0.05 0.05 0.04 0.04 0.04 0.04 0.03 Percent of meat expenditures 3.11 3.41 3.28 3.22 3.15 3.12 3.07 3.03 2.97 2.87 2.78 2.70

Total meat, dollars per person 575.80 554.25 556.82 572.17 592.16 608.05 621.91 629.77 634.53 640.61 647.53 655.91 Percent of income 1.86 1.71 1.63 1.61 1.59 1.56 1.53 1.48 1.42 1.37 1.33 1.2958 USDA Long-term Pro j ections, Februar y 200 7 Table 23. Beef long-term projections Item Units 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Beginning stocks Mil. lbs. 637 571 625 600 600 600 600 600 600 600 600 600 Commercial production Mil. lbs. 24,683 25,970 26,700 26,744 26,449 26,036 25,948 26,068 26,365 26,977 27,547 28,031 Change from previous year Percent 0.5 5.2 2.8 0.2 -1.1 -1.6 -0.3 0.5 1.1 2.3 2.1 1.8

Farm production Mil. lbs. 101 102 102 102 102 102 102 102 102 102 102 102 Total production Mil. lbs. 24,784 26,072 26,802 26,846 26,551 26,138 26,050 26,170 26,467 27,079 27,649 28,133 Imports Mil. lbs. 3,599 3,152 3,360 3,366 3,389 3,413 3,437 3,462 3,486 3,512 3,538 3,564 Total supply Mil. lbs. 29,020 29,795 30,787 30,812 30,540 30,151 30,087 30,232 30,553 31,191 31,787 32,297

Exports Mil. lbs. 697 1,164 1,500 1,556 1,633 1,711 1,789 1,865 1,942 2,040 2,124 2,258

Ending stocks Mil. lbs. 571 625 600 600 600 600 600 600 600 600 600 600

Total consumption Mil. lbs. 27,752 28,006 28,687 28,656 28,307 27,840 27,698 27,767 28,011 28,551 29,063 29,439 Per capita, carcass weight Pounds 93.3 93.5 95.0 94.0 92.1 89.8 88.6 88.0 88.0 89.0 89.8 90.2 Per capita, retail weight Pounds 65.3 65.5 66.5 65.8 64.4 62.8 62.0 61.6 61.6 62.3 62.9 63.2 Change from previous year Percent -1.2 0.2 1.5 -1.0 -2.1 -2.5 -1.4 -0.6 0.0 1.1 0.9 0.5

Prices:

Beef cattle, farm $/cwt 89.55 88.25 87.75 88.98 94.98 98.33 99.77 98.55 97.07 95.59 94.27 93.38 Calves, farm $/cwt 135.42 132.73 126.79 122.44 123.56 128.16 134.55 134.93 132.15 129.34 126.81 124.72 Choice steers, Nebraska $/cwt 87.28 85.76 85.25 86.44 92.28 95.53 96.93 95.75 94.31 92.87 91.59 90.73 Deflated price $/cwt 44.99 43.08 41.78 41.33 43.05 43.48 43.04 41.48 39.86 38.29 36.84 35.60 Yearling steers, Okla. City $/cwt 110.94 107.26 102.25 98.74 99.64 103.36 108.51 108.82 106.57 104.30 102.27 100.58 Deflated price $/cwt 57.18 53.88 50.11 47.21 46.48 47.04 48.18 47.14 45.04 43.01 41.14 39.47 Retail: Beef and veal 1982-84=100 200.4 202.1 201.0 207.5 217.8 226.5 233.1 235.4 235.5 235.6 235.9 237.3 Retail: Other meats 1982-84=100 177.5 180.7 177.0 181.5 185.6 189.6 192.9 196.1 198.9 201.2 203.6 206.4 ERS retail beef $/lb. 4.09 3.98 3.96 4.09 4.29 4.46 4.59 4.64 4.64 4.64 4.65 4.68

Costs and returns, cow-calf enterprise:

Variable expenses $/cow 237.03 247.76 261.99 271.97 277.63 283.71 283.15 285.90 288.80 291.91 295.02 295.27 Fixed expenses $/cow 127.04 130.49 135.54 139.89 142.63 145.03 147.28 149.48 151.65 153.95 156.21 158.54 Total cash expenses $/cow 364.07 378.25 397.53 411.87 420.26 428.74 430.44 435.38 440.45 445.86 451.23 453.81 Returns above cash costs $/cow 174.62 148.23 141.12 117.34 123.66 144.15 179.17 184.96 176.58 167.46 159.52 156.37

Cattle inventory 1,000 head 95,438 97,102 98,400 98,600 98,308 97,976 97,796 98,066 99,282 100,643 101,771 102,601 Beef cow inventory 1,000 head 32,915 33,253 33,406 33,404 33,400 33,269 33,272 33,583 34,336 35,124 35,774 36,284 Total cow inventory 1,000 head 41,920 42,311 42,400 42,053 41,962 41,749 41,689 41,942 42,642 43,386 43,998 44,455USDA Long-term Projections, February 2007 59 Table 24. Pork long-term projections Item Units 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Beginning stocks Mil. lbs. 543 494 550 550 550 550 550 550 550 550 550 550 Commercial production Mil. lbs. 20,685 21,069 21,850 21,400 21,183 21,086 21,151 21,372 21,699 22,090 22,515 22,848 Change from previous year Percent 0.9 1.9 3.7 -2.1 -1.0 -0.5 0.3 1.0 1.5 1.8 1.9 1.5

Farm production Mil. lbs. 21 20 20 20 20 20 20 20 20 20 20 20 Total production Mil. lbs. 20,706 21,089 21,870 21,420 21,203 21,106 21,171 21,392 21,719 22,110 22,535 22,868 Imports Mil. lbs. 1,025 1,021 1,030 1,043 1,059 1,077 1,099 1,121 1,143 1,166 1,189 1,213 Total supply Mil. lbs. 22,274 22,604 23,450 23,013 22,812 22,733 22,820 23,063 23,412 23,826 24,274 24,631

Exports Mil. lbs. 2,665 2,968 3,090 3,183 3,230 3,279 3,328 3,378 3,429 3,480 3,532 3,585

Ending stocks Mil. lbs. 494 550 550 550 550 550 550 550 550 550 550 550

Total consumption Mil. lbs. 19,115 19,086 19,810 19,280 19,032 18,904 18,942 19,135 19,433 19,796 20,192 20,496 Per capita, carcass weight Pounds 64.4 63.8 65.6 63.3 61.9 61.0 60.6 60.7 61.1 61.7 62.4 62.8 Per capita, retail weight Pounds 50.0 49.5 50.9 49.1 48.0 47.3 47.0 47.1 47.4 47.9 48.4 48.7 Change from previous year Percent -2.6 -1.0 2.9 -3.5 -2.2 -1.5 -0.7 0.2 0.7 1.0 1.1 0.7

Prices: Hogs, farm $/cwt 49.62 46.32 40.96 47.44 50.44 53.12 54.58 55.44 55.39 54.63 53.82 53.70 National base, live equivalent $/cwt 50.05 47.23 41.76 48.47 51.63 54.38 55.87 56.76 56.71 55.93 55.10 54.98 Deflated price $/cwt 25.51 23.68 21.46 22.76 23.65 24.30 24.36 24.15 23.54 22.65 21.77 21.19 Retail: pork 1982-84=100 177.7 177.3 174.0 182.7 190.1 196.8 200.9 204.6 206.3 206.3 206.4 207.8 ERS retail pork $/lb. 2.83 2.81 2.76 2.90 3.02 3.12 3.19 3.24 3.27 3.27 3.27 3.30

Costs and returns, farrow to finish:

Variable expenses $/cwt 33.57 33.53 39.87 44.19 44.37 45.92 44.69 44.71 44.78 44.90 45.01 45.39 Fixed expenses $/cwt 7.60 7.72 7.81 7.86 7.89 7.93 7.96 8.01 8.05 8.10 8.16 8.19 Total cash expenses $/cwt 41.16 41.25 47.68 52.04 52.25 53.84 52.65 52.72 52.83 53.01 53.17 53.58 Returns above cash costs $/cwt 8.84 6.80 -3.04 -3.51 -0.42 0.75 3.44 4.27 4.11 3.14 2.14 0.87

Hog inventory, Dec. 1, previous year 1,000 head 60,975 61,449 62,500 61,800 61,209 60,945 61,123 61,723 62,612 63,674 64,829 65,736

Table 25. Young chicken long-term projections Item Units 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Beginning stocks Mil. lbs. 713 924 725 770 770 770 770 770 770 770 770 770 Federally inspected slaughter Mil. lbs. 35,365 35,846 36,325 36,691 36,928 37,058 37,205 37,537 38,064 38,739 39,354 39,921 Change from previous year Percent 3.8 1.4 1.3 1.0 0.6 0.4 0.4 0.9 1.4 1.8 1.6 1.4

Production Mil. lbs. 34,986 35,462 35,936 36,324 36,559 36,687 36,833 37,162 37,683 38,352 38,960 39,522 Total supply Mil. lbs. 35,733 36,427 36,697 37,130 37,365 37,493 37,639 37,968 38,489 39,158 39,766 40,328 Change from previous year Percent 4.1 1.9 0.7 1.2 0.6 0.3 0.4 0.9 1.4 1.7 1.6 1.4

Exports Mil. lbs. 5,203 5,411 5,530 5,516 5,583 5,664 5,762 5,842 5,932 6,017 6,106 6,196

Ending stocks Mil. lbs. 924 725 770 770 770 770 770 770 770 770 770 770

Consumption Mil. lbs. 29,606 30,291 30,397 30,844 31,012 31,059 31,107 31,356 31,787 32,371 32,890 33,362 Per capita, carcass weight Pounds 99.8 101.2 100.6 101.2 100.9 100.2 99.4 99.4 99.9 100.9 101.6 102.2 Per capita, retail weight Pounds 85.7 86.9 86.4 86.9 86.6 86.0 85.4 85.4 85.8 86.7 87.3 87.8 Change from previous year Percent 1.7 1.4 -0.5 0.6 -0.3 -0.7 -0.7 -0.1 0.5 1.0 0.8 0.6

Prices:

Broilers, farm Cents/lb. 43.3 38.6 39.4 40.6 42.8 45.0 46.8 47.6 47.6 47.3 47.1 47.3 12-city market price Cents/lb. 70.8 63.9 65.3 67.3 71.0 74.6 77.6 78.9 78.8 78.2 78.0 78.3 Deflated wholesale price Cents/lb. 36.8 32.1 32.0 32.2 33.1 34.0 34.5 34.2 33.3 32.3 31.4 30.7 Change from previous year Percent -6.2 -12.6 -0.3 0.5 2.9 2.5 1.5 -0.9 -2.5 -3.2 -2.8 -2.1 Composite retail broiler price Cents/lb. 174.1 156.1 156.0 163.8 175.5 187.0 197.0 201.8 203.5 203.7 204.8 207.5

Costs and returns:

Total costs Cents/lb. 66.75 66.41 68.78 71.71 72.44 74.17 73.73 74.18 74.67 75.23 75.80 76.61 Net returns Cents/lb. 4.05 -2.48 -3.43 -4.37 -1.44 0.45 3.88 4.68 4.15 3.01 2.19 1.6860 USDA Long-term Pro j ections, Februar y 200 7 Table 26. Turkey long-term projections Item Units 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Beginning stocks Mil. lbs. 288 206 225 280 280 280 280 280 280 280 280 280 Federally inspected slaughter Mil. lbs. 5,504 5,668 5,760 5,799 5,783 5,791 5,809 5,852 5,906 5,960 6,014 6,072 Change from previous year Percent 0.9 3.0 1.6 0.7 -0.3 0.1 0.3 0.7 0.9 0.9 0.9 1.0

Production Mil. lbs. 5,432 5,594 5,685 5,724 5,708 5,716 5,734 5,776 5,830 5,882 5,935 5,993 Total supply Mil. lbs. 5,720 5,800 5,910 6,004 5,988 5,996 6,014 6,056 6,110 6,162 6,215 6,273 Change from previous year Percent -0.3 1.4 1.9 1.6 -0.3 0.1 0.3 0.7 0.9 0.9 0.9 0.9

Exports Mil. lbs. 570 544 585 543 549 557 567 575 584 592 601 610

Ending stocks Mil. lbs. 206 225 280 280 280 280 280 280 280 280 280 280

Consumption Mil. lbs. 4952 5,040 5,049 5,185 5,163 5,163 5,171 5,205 5,250 5,294 5,339 5,387 Per capita Pounds 16.7 16.8 16.7 17.0 16.8 16.6 16.5 16.5 16.5 16.5 16.5 16.5 Change from previous year Percent -2.1 0.9 -0.7 1.8 -1.3 -0.9 -0.7 -0.2 0.0 0.0 0.0 0.1

Prices:

Turkey, farm Cents/lb. 44.8 48.6 45.4 45.0 46.5 49.3 51.4 52.8 53.6 53.5 53.6 54.0 Hen turkey (whsle.) East Cents/lb. 73.4 78.0 73.0 72.4 74.7 79.2 82.7 84.9 86.1 86.1 86.2 86.9 Deflated hen turkey Cents/lb. 37.8 39.2 35.8 34.6 34.9 36.1 36.7 36.8 36.4 35.5 34.7 34.1 Retail frozen turkey Cents/lb. 107.2 112.4 109.3 108.3 111.1 114.1 115.7 115.6 114.2 111.4 109.0 107.2 Retail: poultry 1982-84=100 185.3 182.0 184.0 191.0 202.9 214.7 224.4 228.8 229.8 228.8 228.8 230.5

Costs and returns:

Total costs Cents/lb. 68.80 62.55 66.97 70.15 71.56 72.91 72.13 72.43 72.72 73.06 73.36 73.90 Net returns Cents/lb. 4.60 15.44 6.04 2.25 3.18 6.31 10.58 12.51 13.39 12.99 12.83 12.99

Table 27. Egg long-term projections Item Units 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Beginning stocks Mil. doz. 14 16 16 16 16 16 16 16 16 16 16 16 P ro d uct i on Mil

. d oz. 7,5 04 7,57 2 7, 682 7,7 20 7,7 36 7,775 7, 829 7, 899 7, 9 7 8 8
, 066 8
, 1 55 8
, 24 5 Ch ange f rom prev i ous yea r P ercent 0

. 9 0

. 9 1 .5 0 .5 0

. 2 0 .5 0 .7 0

. 9 1

. 0 1

. 1 1

. 1 1

. 1

Imports Mil. doz. 9 8 9 10 10 10 10 10 10 10 10 10 Total supply Mil. doz. 7,527 7,596 7,707 7,746 7,761 7,800 7,854 7,925 8,004 8,092 8,180 8,270 Change from previous year Percent 0.8 0.9 1.5 0.5 0.2 0.5 0.7 0.9 1.0 1.1 1.1 1.1

Hatching use Mil. doz. 1,000 995 990 998 1,003 1,007 1,009 1,015 1,024 1,036 1,048 1,060 Exports Mil. doz. 203 187 195 198 201 204 207 210 213 216 219 222

Ending stocks Mil. doz. 16 16 16 16 16 16 16 16 16 16 16 16

Consumption Mil. doz. 6,308 6,397 6,506 6,534 6,541 6,573 6,622 6,684 6,751 6,824 6,897 6,973 Per capita Number 255.1 256.4 258.4 257.3 255.3 254.4 254.0 254.2 254.6 255.2 255.8 256.4 Change from previous year Percent -0.8 0.5 0.8 -0.5 -0.8 -0.4 -0.1 0.1 0.1 0.2 0.2 0.3

Prices:

Eggs, farm Cents/doz. 54.5 57.2 65.6 73.1 79.8 84.0 85.7 86.5 87.4 88.2 89.0 89.9 New York, Grade A large Cents/doz. 65.5 69.0 78.0 87.0 95.0 100.0 102.0 103.0 104.0 105.0 106.0 107.0 Deflated wholesale prices Cents/doz. 33.8 34. 7 38.2 41.6 44.3 45.5 45.3 44.6 44.0 43.3 42.6 42.0 Retail, Grade A, large Cents/doz. 122 130 139 156 171 180 184 185 187 189 191 193 Retail: Eggs 1982-84=100 144.1 151.2 162.0 182.5 201.4 213.0 218.3 221.4 224.5 227.7 230.9 234.0

Costs and returns:

Total costs Cents/doz. 71.91 71.84 85.41 94.66 97.19 99.97 97.35 97.40 97.54 97.81 98.04 98.85 Net returns Cents/doz. -6.41 -2.84 -7.41 -7.66 -2.19 0.03 4.65 5.60 6.46 7.19 7.96 8.15USDA Long-term Projections, February 2007 61 Table 28. Dairy long-term projections Item Units 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Production data: Number of cows 1,000 9,041 9,110 9,045 8,950 8,860 8,775 8,710 8,650 8,595 8,550 8,510 8,465 Milk per cow Pounds 19,577 19,955 20,235 20,545 20,750 21,030 21,340 21,730 22,010 22,355 22,705 23,120 Milk production Bil. lbs. 177.0 181.9 183.0 183.9 183.8 184.5 185.9 188.0 189.2 191.1 193.2 195.7 Farm use Bil. lbs. 1.1 1.1 1.0 0.8 0.8 0.7 0.7 0.6 0.5 0.5 0.4 0.4

Commercial use, milk equivalent: Milkfat basis Bil. lbs. 179.7 184.3 188.6 189.0 188.8 189.8 191.2 193.4 194.8 196.8 199.1 201.7 Skim solids basis Bil. lbs. 180.6 184.8 188.2 188.6 188.6 189.3 190.6 192.8 194.2 196.2 198.4 201.0

Net removals, milk equivalent: Milkfat basis Bil. lbs. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Skim solids basis Bil. lbs. -1.0 0.7 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Prices: All milk $/cwt 15.14 12.85 13.85 14.80 15.45 16.00 16.35 16.60 16.65 16.80 16.80 16.90 Retail, all dairy products 1982-84=100 182.4 181.4 185.5 191.5 196.5 201.0 205.0 206.0 206.0 206.5 206.5 207.062 USDA Long-term Pro j ections, Februar y 200 7 

### U.S. Agricultural Sector Aggregate Indicators Farm Income, Food Prices and Expenditures, and U.S. Trade Value
Large increases in corn-based ethanol producti on affect production, use, and prices of farm commodities throughout the sector. Steady domesti c and international economic growth supports gains in consumption, trade, and prices. These f actors combine to result in higher market prices and cash receipts. Rising production expenses an d lower government payments offset some of the gains in cash receipts and other sources of farm income, although net farm income remains strong through the projections. U.S. agri cultural export values rise thr ough the projections. On average, consumer food prices are pr ojected to rise more slowly than th e general rate of inflation over the next decade, although increases in meat prices push food prices up faster in some years.

0 10 20 30 40 50 60 70 80 90

1985 1990 1995 2000 2005 2010 2015 Net farm income

Billion dollars

Strong domestic use and export demand push U.S. net farm income from its 2006 level of $60.6 billion to an average of $66.7 billion annually over the next 10 years.

• Large increases in cash receipts over the next several years mostly result from expansion of corn-based ethanol production. Lower government payments, due to higher commodity prices, and rising farm production ex penses offset gains in cash r eceipts in the later years of the projections, resulting in some reduction in net farm income after 2010. Nonetheless, net incomes remain historically high in the mid- to upper-$60 billion range, well above the average in the 1990s of about $48 billion.USDA Long-term Projections, February 2007 63 0 5 10 15 20 25

1985 1990 1995 2000 2005 2010 2015 Direct government payments

Total direct government payments Billion dollars

Direct government payments to farmers are projected to fall from $16 billion in 2006 to an average of less than $12 billion annually over the projecti on period, largely due to higher commodity prices and correspondingly lower price- dependent program benefits.

• To account for the possibility of both higher and lower prices than the deterministic (point estimate) prices, a stochastic estimation pro cess is used to proj ect expected direct government payments. This process captures potential variation in farm program benefits due to stochastic (random) shocks to yields.

• Strong demand for corn for ethanol production resu lts in projected market prices for corn and other crops rising to levels that lowe r government payments significantly. For example, even with stochastic considerations , payments for price-se nsitive marketing loan benefits and counter-cyclical pa yments for feed grains are minimal, totaling less than $200 million over calendar years 2007-16 for the projections scenario in this report. In contrast, with higher crop prices, use of land for production is more valu able, so rental rates for land in the Conservation Reserve Program (CRP) ri se and push overall annual CRP payments to more than $3 billion toward the end of the pr ojections. As a result, fixed direct payments under the 2002 Farm Act and conservation paym ents account for a larger share of total direct government payments.

• 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 4 percent during most of the pr ojection period. Convers ely, cash receipts plus farm-related income rises to over 96 percent of gross cash income.64 USDA Long-term Pro j ections, Februar y 200 7 0 50 100 150 200 250 300

1985 1990 1995 2000 2005 2010 2015 Other Manufactured Farm-origin Farm production expenses

Billion dollars

Total production expenses incr ease at near the general infl ation rate from 2007-16. These expenses are divided into three categories in the chart above: fa rm-origin (seed, feed, and feeder livestock), manufactured (fuel, fertilizer, pesticides , and electricity), and ot her (labor, interest, net rent to nonoperator landlord s, and other expenses).

• The largest percentage increase is for “oth er” expenses, reflecting increases in labor expenses and interest costs. 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 and other operating expenses reflect higher cash receipts and profitability as well as larger acreage and sector output.

• Projected manufactured-input expe nses reflect high oil prices and larger crop production. After increases in 2004-06 that were mostly due to the rising oil pr ices, these expenses increase at about the general rate of infl ation through the rest of the projections.

• Farm-origin expenses rise less than the general inflation rate. Feed expenses rise the most as demand for corn for use in the production of ethanol competes with feed demand and pushes corn prices higher.

• Cash operating margins tighten over the projectio ns period as expenses rise while decreases in government payments slow gains in gross cash incomes. By 2016, cash expenses represent about 80 percent of gross cash inco me, compared with an average of 73 percent in 2000-05.USDA Long-term Projections, February 2007 65 0 500 1,000 1,500 2,000 2,500

1985 1990 1995 2000 2005 2010 2015 Farmland value
Dollars per acre

Strong and stable net farm income assists in asset accumulation and debt management.

• Gains in farmland values and real estate asse ts (representing about 80 percent of total farm assets) reflect increases in agricultural revenues, particularly in the first several years of the projections. Additionally, as the general economy continues to expand, demand for land for nonagricultural uses, such as housing a nd recreation, contributes to rising farmland values.

8 10 12 14 16 18 20 22 24

1950 1960 1970 1980 1990 2000 2010 Debt-to-asset ratios

Percent

• Higher incomes facilitate increases in farm de bt in the projections. Nonetheless, debt moves up less rapidly than farm asset values, resulting in gains in overall farm sector equity. The debt-to-asset ratio declines m oderately from 11.8 percent in 2006 to about 11.3 percent at the end of the projections, con tinuing a decline from over 20 percent in the mid-1980s.66 USDA Long-term Pro j ections, Februar y 200 7 0 2 4 6

1985 1990 1995 2000 2005 2010 2015 Food inflation
Percent change

Consumer Price Index (CPI), all items

CPI, Food

On average over the next 10 years, retail food prices are projected to increase less than the general inflation rate, although food price incr eases are somewhat larger than ge neral inflation in some years.

• Consumer prices for red meats, poultry, and eggs exceed the general inflation rate in 2008-10 as the livestock sector adjusts to hi gher feed costs due to the expansion in corn-based ethanol production. As a result, ove rall retail food prices ri se faster than the general inflation rate in those years.

• Among foods purchased for consum ption at home, projected pr ice increases are generally strongest for more highly proce ssed foods such as cereals and bakery products and fats and oils. Prices for these foods are related more to processing and marketing co sts than to farm-level prices and, theref ore, rise at a rate near the general inflation rate.

• Prices for food away from home reflect the overa ll inflation rate as well as some effect of price movements for retail meat and poultry. Competition in the fast-food and food service industries tend to moderate price incr eases for food away from home.

0 200 400 600 800

1990 1995 2000 2005 2010 2015 Food expenditures

Food at home

Food away from home Billion dollars

• Expenditures for meals prepared away from home account for a growing share of food spending, reaching about 51 percent of total food expenditures by 2016.USDA Long-term Projections, February 2007 67 0 10 20 30 40 50 60 70 80 90 100

1985 1990 1995 2000 2005 2010 2015 High value Bulk U.S. agricultural export value: Bulk and high value 1/

1/ Bulk commodities include wheat, rice, feed grains, soybeans, cotton, and tobacco. High-value products include semi-processed and processed grains and oilseeds, animals and animal products, horticultural products, and sugar and tropical products. Billion dollars

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

• Steady world economic growth, particularly in developing countries, provides a foundation for gains in trade and U.S. agricultural expor ts. However, competition in global markets remains strong. Higher commodity prices due to expansion of global biofuel demand also contribute to the gains in export values. Overall, the value of U.S. agricultural exports is projected to grow from $77 billion in fi scal year 2007 to nearly $95 billion in 2016.

• The initial increases in bulk commodity prices strengthen bu lk export values, pushing the share of exports accounted for by high-value pr oducts (HVP) down over the next few years. In the longer run, HVP export values again grow in importance, 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 produc ts and horticultural pr oducts. Most of the growth in the value of bulk commodity expo rts (grains, oilseeds, cotton, and tobacco) reflects expected price increases and gains in volume for grains.

• U.S. agricultural import values rise to about $93 billion in 2016, boosted by gains in consumer income and demand for a large variet y of foods. Strong growth in horticultural imports is assumed to continue, contributing over half of the overa ll agricultural import increase.

• Overall, the U.S. agricultural trade surplus rise s to over $10 billion in th e initial years of the projections, largely due to the gains in bulk commodity prices and bulk export values. The agricultural trade balanc e then narrows through the remainder of the projections as bulk export growth slows and imports continue steady gains.68 USDA Long-term Pro j ections, Februar y 200 7 Table 29. Farm receipts, expenses, and incomes in nominal dollars 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Billion dollars Cash receipts: Crops 114.0 121.6 133.5 141.5 145.7 148.1 149.1 150.8 152.7 154.6 156.7 158.8 Livestock and products 125.0 121.2 125.2 128.9 134.3 137.1 139.6 140.7 141.1 142.1 142.9 144.2 All commodities 238.9 242.7 258.7 270.4 280.1 285.2 288.7 291.5 293.8 296.7 299.7 303.0 Farm-related income 17.6 18.0 18.7 19.2 19.6 20.1 20.5 21.0 21.5 21.9 22.4 22.9 Government payments 24.3 16.3 12.4 11.2 10.8 11.0 11.3 11.6 11.9 12.3 11.5 11.7 Gross cash income 280.9 277.1 289.8 300.8 310.5 316.3 320.5 324.1 327.2 330.9 333.6 337.6

Cash expenses 199.7 210.4 222.6 233.1 239.2 243.9 248.3 252.8 257.4 262.0 266.7 271.1 Net cash income 81.2 66.7 67.2 67.7 71.3 72.4 72.3 71.3 69.8 69.0 66.9 66.6

Value of inventory change 0.4 -0.8 4.3 1.7 0.3 0.8 0.6 1.0 1.8 1.9 1.7 1.3 Non-money income 18.5 22.2 23.8 23.4 24.8 25.3 25.7 26.2 26.6 27.0 27.5 27.9 Gross farm income 299.8 298.4 318.0 325.9 335.6 342.3 346.9 351.2 355.6 359.9 362.8 366.8

Noncash expenses 18.0 18.9 19.6 19.7 19.8 20.0 20.3 20.5 20.8 21.0 21.2 21.5 Operator dwelling expenses 8.3 8.6 9.1 9.2 9.3 9.5 9.6 9.7 9.8 9.9 10.0 10.1 Total production expenses 226.0 237.8 251.3 262 .0 268.4 273.3 278.1 283.0 288.0 292.9 297.9 302.7 Net farm income 73.8 60.6 66.6 64.0 67.2 69.0 68.8 68.2 67.6 67.0 64.8 64.1

Farm assets 1,805.3 1,919.4 1,994. 3 2,090.8 2,180.8 2,251.2 2,314.7 2, 369.8 2,426.0 2,481.5 2,536.8 2,586.7 Farm debt 215.5 226.2 235.3 243.5 252.0 258.9 265.3 270.6 276.1 281.6 287.2 292.0 Farm equity 1,589.8 1,693.2 1,759. 0 1,847.3 1,928.9 1,992.4 2,049.3 2, 099.1 2,150.0 2,199.9 2,249.6 2,294.7
Percent Debt/equity ratio 13.6 13.4 13.4 13.2 13.1 13.0 12.9 12.9 12.8 12.8 12.8 12.7 Debt/assets ratio 11.9 11.8 11.8 11.6 11.6 11.5 11.5 11.4 11.4 11.3 11.3 11.3

Table 30. Farm receipts, expenses, and incomes in 1996 dollars 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Billion 1996 dollars 1 Cash receipts: Crops 94.9 98.2 105.3 109.1 109.9 109.3 107.6 106.6 105.5 104.6 103.7 102.9 Livestock and products 104.0 97.9 98.7 9 9.3 101.4 101.2 100.8 99.4 97.5 96.2 94.6 93.4 All commodities 198.9 196.0 204.0 208.4 211.3 210.5 208.4 206.0 203.0 200.8 198.3 196.2 Farm-related income 14.7 14.6 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.9 14.9 Government payments 20.3 13.2 9.8 8.7 8.2 8.1 8.2 8.2 8.2 8.3 7.6 7.6 Gross cash income 233.9 223.8 228.6 231.8 234.3 233.4 231.4 229.0 226.1 223.9 220.8 218.7

Cash expenses 166.2 169.9 175.6 179.6 180.5 179.9 179.2 178.6 177.9 177.3 176.5 175.6 Net cash income 67.6 53.9 53.0 52.2 53.8 53.4 52.2 50.4 48.2 46.7 44.3 43.1

Value of inventory change 0.3 -0.6 3.4 1.3 0.2 0.6 0.5 0.7 1.3 1.3 1.1 0.8 Non-money income 15.4 17.9 18.8 18.0 18.7 18.6 18.6 18.5 18.4 18.3 18.2 18.1 Gross farm income 249.6 241.0 250.8 251.1 253.2 252.6 250.4 248.2 245.7 243.5 240.1 237.6

Noncash expenses 15.0 15.2 15.5 15.1 14.9 14.8 14.6 14.5 14.3 14.2 14.0 13.9 Operator dwelling expenses 6.9 6.9 7.2 7.1 7.1 7.0 6.9 6.8 6.8 6.7 6.6 6.6 Total production expenses 188.1 192.1 198.2 201 .9 202.5 201.7 200.8 200.0 199.0 198.2 197.2 196.1 Net farm income 61.5 48.9 52.6 49.3 50.7 50.9 49.6 48.2 46.7 45.3 42.9 41.5

Farm assets 1,502.8 1,550.3 1,572. 9 1,611.1 1,645.3 1,661.0 1,671.1 1, 674.8 1,676.6 1,679.1 1,679.0 1,675.4 Farm debt 179.4 182.7 185.6 187.6 190.1 191.0 191.6 191.3 190.8 190.5 190.1 189.1 Farm equity 1,323.4 1,367.6 1,387. 3 1,423.4 1,455.2 1,470.0 1,479.5 1, 483.5 1,485.9 1,488.6 1,488.9 1,486.3 1/ Nominal dollar values divided by the GDP chain-type price index.USDA Long-term Projections, February 2007 69 Table 32. Changes in consumer food prices, long-term projections CPI category 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

All food 2.4 2.4 1.9 2.8 2.9 2.7 2.4 2.0 1.7 1.7 1.7 1.9 Food away from home 3.1 3.1 2.8 2.8 3.0 2.8 2.6 2.4 2.2 2.2 2.2 2.3
Food at home 1.9 1.7 1.5 2.8 2.8 2.7 2.3 1.7 1.4 1.4 1.3 1.5
Meats 2.3 0.7 -1.2 3.6 4.2 3.6 2.5 1.4 0.5 0.2 0.3 0.8 Beef and veal 2.6 0.8 -0.5 3.2 5.0 4.0 2.9 1.0 0.0 0.0 0.1 0.6 Pork 2.0 -0.2 -1.9 5.0 4.1 3.5 2.1 1.8 0.8 0.0 0.0 0.7 Other meats 2.4 1.8 -2.0 2.5 2.3 2.2 1.7 1.7 1.4 1.2 1.2 1.4 Poultry 2.0 -1.8 1.1 3.8 6.2 5.8 4.5 2.0 0.4 -0.4 0.0 0.7 Fish and seafood 3.0 4.7 3.5 3.0 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Eggs -13.7 4.9 7.1 12.7 10.4 5.8 2.5 1.4 1.4 1.4 1.4 1.3 Dairy products 1.2 -0.5 2.3 3.2 2.6 2.3 2.0 0.5 0.0 0.2 0.0 0.2 Fats and oils -0.1 0.2 2.6 2.8 2.5 2.4 2.4 1.9 1.7 1.8 1.7 1.8 Fruits and vegetables 3.7 4.8 1.0 2.0 1.9 1.9 1.9 1.9 1.9 2.0 1.9 1.9 Sugar and sweets 1.2 3.8 1.7 1.4 1.4 2.5 2.2 2.1 2.0 2.0 2.0 2.0 Cereals and bakery products 1.5 1.8 2.8 2.3 2.1 2.4 2.4 2.4 2.4 2.4 2.3 2.4 Nonalcoholic beverages 2.8 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 Other foods 1.6 1.4 1.6 1.6 1.5 1.5 1.5 1.6 1.5 1.6 1.5 1.5 Percent Table 31. Consumer food price indexes and food expenditures, long-term projections CPI category 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Consumer price indexes: All food 190.7 195.2 198.9 204.4 210.3 216.0 221.2 225.6 229.5 233.3 237.2 241.6 Food away from home 193.4 199.4 205.0 210.7 217.0 223.1 228.9 234.4 239.6 244.9 250.3 256.1
Food at home 189.8 193.1 195.9 201.4 207.1 212.7 217.5 221.3 224.3 227.4 230.4 233.9
Meats 187.5 188.8 186.6 193.3 201.5 208.7 213.9 216.8 217.9 218.4 219.0 220.7 Beef and veal 200.4 202.1 201.0 207.5 217.8 226.5 233.1 235.4 235.5 235.6 235.9 237.3 Pork 177.7 177.3 174.0 182.7 190.1 196.8 200.9 204.6 206.3 206.3 206.4 207.8 Other meats 177.5 180.7 177.0 181.5 185.6 189.6 192.9 196.1 198.9 201.2 203.6 206.4 Poultry 185.3 182.0 184.0 191.0 202.9 214.7 224.4 228.8 229.8 228.8 228.8 230.5 Fish and seafood 200.1 209.5 216.8 223.3 228.9 234.6 240.5 246.5 252.7 259.0 265.5 272.1 Eggs 144.1 151.2 162.0 182.5 201.4 213.0 218.3 221.4 224.5 227.7 230.9 234.0 Dairy products 182.4 181.4 185.5 191.5 196.5 201.0 205.0 206.0 206.0 206.5 206.5 207.0 Fats and oils 167.7 168.0 172.3 177.1 181.6 186.0 190.4 194.0 197.3 200.9 204.3 208.0 Fruits and vegetables 241.4 252.9 255.5 260.5 265.4 270.5 275.7 281.0 286.4 292.0 297.6 303.4 Sugar and sweets 165.2 171.5 174.5 177.0 179.5 184.0 188.1 192.1 195.9 199.8 203.7 207.8 Cereals and bakery products 209.0 212.8 218.7 223.8 228.6 234.0 239.7 245.5 251.3 257.4 263.4 269.6 Nonalcoholic beverages 144.4 147.4 150.5 153.7 156.9 160.2 163.6 167.0 170.5 174.1 177.8 181.5 Other foods 182.5 185.0 188.0 191.0 193.8 196.7 199.7 202.8 205.8 209.0 212.1 215.3 Food expenditures: Billion dollars
All food 1,023.2 1,088.1 1,135.9 1,184.1 1,235.9 1,288.9 1,342.9 1,397.6 1,453.5 1,511.4 1,571.8 1,635.5

Food at home 527.0 550.2 572.2 593.4 615.8 638.9 663.0 687.8 713.7 740.5 768.5 797.5 Food away from home 496.2 537.9 563.7 590.7 620.1 650.0 679.9 709.8 739.8 770.9 803.3 838.0 1982-84=10070 USDA Long-term Pro j ections, Februar y 200 7 Table 33. Summary of U.S. agricultural trade long-term projections, fiscal years 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Billion dollars Agricultural exports (value): Livestock, poultry, and dairy 12.2 13.4 14.2 14.8 15.6 16.3 17.0 17.4 17.8 18.2 18.5 19.0 Livestock, poultry, and products 10.5 11.6 12.4 12.9 13.6 14.2 14.8 15.3 15.6 16.0 16.3 16.8 Dairy products 1.7 1.8 1.8 1.9 2.0 2.1 2.1 2.2 2.2 2.2 2.2 2.2 Grain and feeds 16.0 18.3 22.1 22.9 22.7 23.3 23.5 24.1 24.6 25.1 25.6 26.2 Coarse grains 5.3 6.8 9.6 10.2 10.1 10.5 10.3 10.5 10.6 10.7 10.7 11.0 Oilseeds and products 11.0 10.7 12.4 14.2 12.4 12.5 12.1 12.3 12.3 12.4 12.5 12.8 Soybeans and products 8.8 8.3 9.9 11.7 9.8 9.7 9.3 9.3 9.2 9.2 9.3 9.3 Horticultural products 14.9 16.7 18.4 18.9 19.5 20.1 20.6 21.2 21.9 22.5 23.2 23.9 Fruits and vegetables, fresh 4.1 4.5 4.7 4.8 4.9 5.1 5.2 5.3 5.5 5.6 5.8 5.9 Fruits and vegetables, processed 3.5 3.9 4.1 4.2 4.3 4.4 4.4 4.5 4.6 4.7 4.8 4.9 Tobacco, unmanufactured 1.0 1.1 1.1 1.2 1.3 1.3 1.4 1.4 1.4 1.4 1.4 1.4 Cotton and linters 3.9 4.7 5.0 5.9 6.0 6.1 6.2 6.3 6.4 6.4 6.5 6.5 Other exports 3.6 3.9 3.8 3.8 3.9 4.1 4.3 4.5 4.6 4.7 4.8 4.9

Total agricultural exports 62.5 68.7 77.0 81.7 81.3 83.7 85.1 87.2 88.9 90.7 92.5 94.8

Bulk commodity exports 22.7 24.6 29.7 33.2 31.9 31.4 31.3 31.8 32.2 32.5 32.9 33.5 High-value product exports 39.9 44.1 47.3 48.5 49.5 52.2 53.8 55.4 56.8 58.2 59.6 61.3 High-value product share 63.8% 64.3% 61.4% 59.4% 60.8% 62.4% 63.2% 63.5% 63.8% 64.1% 64.4% 64.7%

Milli on me t r i c t

ons Agricultural exports (volume):

Bulk commodity exports 114.3 121.1 124.9 118.8 112.0 108.5 111.2 114.0 116.1 118.4 120.7 122.8
Billion dollars Livestock, poultry, and dairy 11.1 11.5 12.0 12.4 12.8 13.2 13.6 13.9 14.1 14.3 14.6 14.8 Livestock, poultry, and products 8.2 8.5 9.0 9.3 9.7 10.0 10.3 10.6 10.7 10.8 11.0 11.2 Dairy products 2.5 2.6 2.6 2.7 2.7 2.8 2.9 2.9 3.0 3.1 3.1 3.2 Grain and feeds 4.3 4.9 5.2 5.4 5.6 5.9 6.0 6.2 6.5 6.7 6.9 7.2 Grain products 3.2 3.4 3.6 3.7 3.9 4.0 4.2 4.4 4.6 4.7 4.9 5.1 Oilseeds and products 3.0 3.5 3.6 3.7 3.8 4.0 4.1 4.3 4.4 4.5 4.7 4.9 Vegetable oils 2.0 2.4 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.5 3.6 Horticultural products 26.9 29.2 31.2 32.4 33.6 34.9 36.2 37.6 39.0 40.5 42.0 43.6 Fruits and vegetables, fresh 7.7 8.7 9.3 9.6 10.0 10.4 10.8 11.2 11.6 12.0 12.4 12.9 Fruits and vegetables, processed 5.0 5.4 5.7 5.9 6.1 6.3 6.5 6.7 6.9 7.1 7.4 7.6 Wine and beer 6.7 7.4 7.9 8.2 8.6 8.9 9.3 9.7 10.1 10.5 10.9 11.4 Sugar and tropical products 11.4 13.6 15.4 15.8 16.3 16.9 17.4 18.0 18.6 19.2 19.9 20.5 Sugar and related products 2.5 3.3 3.9 4.0 4.1 4.3 4.4 4.5 4.7 4.8 4.9 5.1 Cocoa, coffee, and products 5.4 5.8 6.1 6.3 6.5 6.7 6.9 7.2 7.4 7.7 7.9 8.2 Other imports 1.2 1.4 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.7 1.7 1.7
Total agricultural imports 57.7 64.0 69.0 71.3 73.9 76.5 79.0 81.6 84.2 86.9 89.7 92.7
Net agricultural trade balance 4.8 4.7 8.0 10.4 7.5 7.2 6.1 5.6 4.7 3.8 2.7 2.1 Sources: U.S. Department of Agriculture and Bureau of Census, U.S. Department of Commerce. Notes: The projections were completed in November 2006 based on policy decisions and other information known at that time. Fo r updates of the nearby year forecasts, see USDA's Outlook for U.S. Agricultural Trade report, published in March, May, and November. Other exports includes seeds, sugar and tropical products, and beverages and preparations. Bulk commodity exports covers wheat, rice, feed grains, soybeans, cotton, an d tobacco. High-value product (HVP) exports is calculated as total exports less the bulk commodities. HVP's include semiprocessed and processed grai ns and oilseeds, animals and animal products, horticultural products, and sugar and tropical products. Other imports include cotton, tobacco, and plant ing seeds. Agricultural imports (value):USDA Long-term Projections, February 2007 71 

### Agricultural Trade

With strong world economic growth and increas ing demand for agricultural products, global agricultural trade is proj ected to rise throughout the coming de cade. Rapid expansion of ethanol and biodiesel production in some countries is projected to have a significant impact on global demand for feedstocks, such as corn, vegetabl e oils, and sugarcane, and on world price relationships. As a result, feeds fed primarily for their energy content become relatively more expensive than those fed for prot ein. Producers of pork and poultry are most affected, but users of grain for food also face higher prices. The contin ued expansion of oilseed crushing capacity in a number of importing countries is expected to strengthen import demand for total oilseeds, while increasing biodiesel production will boost the demand for total vegetable oils. The growing economies of developing countries provide a foundation for gains in demand for agricultural products and increa ses in trade. Broad-based economic growth and increasing urbanization lead to diet divers ification in most developing re gions, generating increased demand for livestock products and feeds, as well as fo r fruits, vegetables, and processed products. Developing-country import demand is further rein forced by population growth rates that remain nearly double the growth rate s of developed countries. International trade in animal products, howev er, remains heavily dependent on demand from developed countries and from market access achie ved under existing trade agreements. Trade is also affected by concerns rega rding diseases such as bovine spongiform encephalopathy (BSE), avian influenza (AI), and foot-and-mouth diseas e (FMD). Strong policy support for domestically produced meat is expected to motivate growth in feed grain imports, especi ally in those regions where limited land availability or agroclimatic conditions preclude expanding domestic crop production, such as in North Africa, the Midd le East, and East and Southeast Asia. Traditional exporters of a wide range of agricultural commodities such as Argentina, Australia, Canada, and the European Union (EU-25) remain important in the coming decade. But an increasing presence in export markets is expect ed from countries that are making significant investments in their agricultural sectors, incl uding Brazil, Russia, Ukraine, and Kazakhstan. Trade projections to 2016 are founded on assumpti ons concerning trends in foreign area, yields, and use, and on the assumption that countries co mply with existing bilateral and multilateral agreements affecting agriculture and agricultural tr ade. The projections incorporate the effects of trade agreements and domestic policy refo rms in place or signed by November 2006. Domestic agricultural and trade po licies in individual foreign countri es are assumed to continue to evolve along their current paths, based on th e 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, th e development and use of technology and changes in consumer preferences are assumed to cont inue evolving based on past performance and analysts’ judgments regarding future developments. NOTE: The EU-25 expanded to 27 countries wi th the accession of Romania and Bulgaria on January 1, 2007. EU projections in this report pe rtain to the EU-25. Ro mania and Bulgaria are included in the Other Europe region, although ad justments were made to account for accession.72 USDA Long-term Pro j ections, Februar y 200 7 50 75 100 125 150 175 200

1990 1995 2000 2005 2010 2015 Global trade: Wheat, coarse grains, and soybeans and soybean products

Million metric tons

Soybeans and soybean products 1/

Coarse grains

1/ Soybeans and soybean meal in soybean-equivalent units. Wheat

Global trade in soybeans and soybean products ha s 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 protei n 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 temperate cropland. High er prices for vegetabl e oils, partially the result of increased demand for biodiesel, are bringing previously uncro pped land in tropical regions of Brazil and Indonesi a into soybean and palm oil production. Biodiesel demand also enhances trade in vegetable oils.

• In the projections, the growth in total area plan ted to all crops rises less than a half-percent a year in most countries. Area expansion occurs more rapidly in countries with a reserve of available land and policies that enable farmer s to respond to higher projected world prices. Such countries include Brazil, Argentina, ot her South American countries, some Eastern European countries, and Ukraine. About two-th irds 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 pr ojected to continue to do so.

• Slower growth in aggregate crop production is offset by slower growth in world population. Nonetheless, populat ion 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 o ils, livestock products, and horticultural products.

• Virtually no growth in overal l global wheat and coarse grai n trade occurred in the 1990s, largely reflecting reductions in imports by the former Soviet Union (FSU) and Central and Eastern Europe (CEE). In the coming decade, overall gains in global grain trade come from a broad range of countries, particularly fr om countries in Africa and the Middle East. Also, China exports less grain and imports more.USDA Long-term Projections, February 2007 73 Global Demand for Biofuel Feedstocks
The increasing demand for feedstocks used in the production of biofuels is expected to have a significant impact on agricultural markets over th e coming decade. A number of new supply-anddemand factors will be important, but there is un certainty related to each factor. The USDA projections are based on vari ous assumptions about these supply and demand factors.
The future price of petroleum is one of these key factors (see page 15). Increasing energy costs have provided an incentive for many government s to encourage the production of petroleum substitutes from renewable agricultural crops. In creases or decreases in petroleum prices in the future will affect the commercial viability of petroleum substitutes.
Major substitution of crop-based fuel for petroleum took place in Brazil in th e last several decades, as Brazil used sugarcane to produce ethanol and then used ethanol on a large scale to fuel vehicles. The EU has used rapeseed oil to produce biodiesel for fuel use in relatively large quantities over the last decade. In both instances, government in terventions were critical to the development of biofuels.
Currently, many other countries are making new investments in biofuel production capacity. Although corn and sugarcane for ethanol and rapes eed oil for biodiesel are the main feedstocks envisioned for these investments, other feedstocks are also being used, such as barley, wheat, rye, wine, and cassava for ethanol produc tion and a variety of vegetable oils, recycled oils, and fats from the food industry for biodiesel. There is considerable interest in ethanol production from cellulosic feedstocks, but widespread commerc ial production during the next decade faces many challenges.
Assumptions Used for the USDA Projections
Although some production of biofuels has been occu rring for a number of years in some countries, the industry is currently experi encing explosive growth in many nations. Data on existing capacity, plants under construction, and planned additional production fac ilities are limited for most countries. The projections are based on a combination of historical data, USDA interpretation of foreign governments’ statements about their plans for biofuel development, and other information about potential investments in biofuel producti on capacity. (See box, page 22, for a discussion of biofuels in the United States.)
During the next 3-4 years, the rapid expansion in bi ofuels production that is projected for a number of countries changes the price relationships among various agricultural commodities.

• Increased demand for grain (especially corn) us ed to produce ethanol increases the price of corn relative to prices for other grains. Prices for other grains also rise, buoyed by their feed value as a replacement for corn, as well as re duced production due to acreage shifts from crops competing with corn, such as soybeans.

--Continued74 USDA Long-term Pro j ections, Februar y 200 7 Global Demand for Biofuel Feedstocks (Continued)

• Prices for vegetable oils also ri se in comparison to prices for oilseeds and protein meals as a greater share of the value of oilseeds is derive d from the oil content relative to the protein meal content. Among oilseeds, rapeseed—c ontaining more than 40 percent oil—becomes more profitable in some growing areas than soybeans, which have 18 percent oil.

• Thus, the price of protein feeds (such as soyb ean meal) declines rela tive to the price of feedstuffs used as a source of energy (such as corn).

• Prices of poultry, and es pecially pork, rise relative to the price of beef because cattle can more effectively use the increasing supply of distillers grains, produced as a coproduct when grain is used to make ethanol. Corn, needed for broilers and swine, becomes more expensive while distillers grains, used for cattle, b ecome abundant and relatively less expensive.
Country Assumptions

EU-25: The EU has a target that 5.75 percent of total transportation fuel use should come from biofuels by 2010. EU policies provid e for an area subsidy for biofuel crops, but the EU relies on individual member states to o ffer tax credits on biofuels. Th e EU Commission has promised to present a more forceful directive that will lead to greater produc tion and use of biofuels in the future. The projections assume that about two-th irds of the mandate is met by 2010 and that, with increasing total fuel use, the mandate is still not quite reached by 2016. The projections further assume that biodiesel accounts for two-thirds of total biofuels and the other third is ethanol. Rapeseed oil is the feedstock for nearly all EU biodiesel production. In the EU, the area planted to rapeseed and the crushing capacity both increase shar ply, in part because of EU enlargement. In addition, the EU increases rapeseed oil imports fro m Russia and Ukraine. It also imports more palm oil from Southeast Asia, as well as some biodiesel from palm oil processed in Southeast Asia.

Brazil: Sugarcane is the feedstock for most of Br azil’s ethanol production. In southern Brazil, some land has already been shifted from grai n and oilseeds production to sugarcane. The projections assume this trend con tinues, but at a slower pace. Biodiesel production is assumed to increase from about 52 million gallons currently to more than 92 million in 2016. Much of the new capacity will be in the soybean production areas in the Central-West region of the country which will reduce regular diesel fuel imports that have to be trucked to the interior.

Canada: Canada has mandated that 5 percent of a ll motor vehicle fuel be biofuel by 2010, but funds for initiatives to encourag e biofuel production are limited. Some provinces have production goals and reportedly provide some production incentiv es. Ethanol production capacity is assumed to rise from 11 million gallons in 2006/07 to about 211 million gallons by 2010. Feedstocks include corn for ethanol plants in Ontario and wheat for a plant in Manitoba. Biodiesel plants are being built in western Canada that will use rapeseed oil as a feedstock. In the projections, land is shifted to rapeseed from wheat, barley, and some su mmer fallow. In eastern Canada, at least one

--ContinuedUSDA Long-term Projections, February 2007 75 Global Demand for Biofuel Feedstocks (Continued)
biodiesel plant is being expanded that uses s oybean oil as a feedstock. Canadian biodiesel production is projected to ri se from 13 million gallons in 2007/08 to 58 million in 2010.
Argentina: The production of biodiesel is assumed to rise from 7 million gallons in 2005/06 to about 59 million over the next several years. Arge ntina has a system of differential export taxes that has lower tax rates for biofuels exports than the tax rate on expor ts of feedstocks such as corn or soybean oil. In turn, the e xport 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 othe r South American countries to keep its crushing facilities running at near full capacity.
Other Europe and the former Soviet Union: Although no explicit assumptions were made about increases in biofuels produc tion in the former Soviet Union or the other countries of non-EU Europe, the projections reflect an increase in rapeseed producti on generated by higher rapeseed prices. Much of the production gains ar e destined for export to the EU.

China: In 2005/06, approximately 3 million tons of co rn were used to produce fuel ethanol. This is assumed to grow to 9 million tons by 2016. Because of its food security policy, China is assumed to eliminate a government subsidy for pr oducing fuel ethanol from corn and will attempt to focus on ethanol production using nongrain feed stocks such as sweet potatoes and cassava.
Malaysia and Indonesia: Although explicit assumptions were not made about increased production of palm oil or its use for biodiesel, high er world prices for palm oil stimulate expansion of the area planted to palm oil. Malaysia expect s to not only export more palm oil, but also to produce biodiesel for the export market.

Africa: Although some countries are reported to be making initial investments in biofuels production capacity, the projections do not account for any uses of agricultural commodities beyond those embodied in rising trends in industrial use.

Other countries: Investments in biofuels production ca pacity are also being considered in a number of other countries. However, since de finite plans are not ye t known, these potential developments have not been included in the projections.76 USDA Long-term Pro j ections, Februar y 200 7 0 25 50 75 100 125 150

1990 1995 2000 2005 2010 2015 Other 1/

FSU & OE 2/
European Union 3/

China

Africa & M. East

NAFTA

Latin America

East Asia Global wheat imports

Million metric tons

1/ Predominantly South and Southeast Asia. 2/ Former Soviet Union and other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 3/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992. Growth in wheat imports is concentrated in t hose developing countries where robust growth in income and population underpins increases in de mand. Important growth markets include SubSaharan Africa, Brazil, Egypt, and Pakistan. World wheat tr ade (including flour) expands by nearly 27 million tons (23 percent) between 2007 and 2016 to 140 million tons.

• Egypt maintains its position as the world’s largest importing countr y, as imports climb slowly to nearly 10 million tons. Imports by Br azil, another large importer, are projected to approach 9 million tons. Brazil’s climate gene rally does not favor wheat, and in some key wheat-producing states, winter corn is expect ed to have better returns than wheat.

• Imports by developing countries in Sub-Saharan Africa, North Africa, and the Middle East rise 11 million tons and account for 40 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. Me xican consumers are projected to continue substituting wheat for co rn in their diets.

• Lower wheat-to-corn price ratios during most of the projection peri od enable wheat to compete effectively with corn for feed use in a number of countries. South Korea is projected to substitute 1 milli on tons of feed wheat for corn annually by 2016. 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 net importer by 2009/10 and to import nearly 2 million tons annually by 2016.USDA Long-term Projections, February 2007 77 0 25 50 75 100 125 150

1990 1995 2000 2005 2010 2015 Other

FSU & OE 1/

Argentina

Australia

Canada

European Union 2/

United States Global wheat exports

Million metric tons

1/ Former Soviet Union and other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 2/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992. The top five wheat-exporting nations (the Unit ed States, Australia, Canada, the EU-25, and Argentina) account for 73 percent of world tr ade in 2007-2016. This is down from a high of 87 percent in 2000/01, mostly due to increased exports from the Black Sea area. U.S. wheat exports are projected to account for 22 perc ent of global wheat trade, down from 25 percent in the past 5 years.

• Shares of the world wheat market held by Ca nada, the EU, and the United States decline slightly, offsetting increases by Australia, Ukra ine, Russia, Argentina, and other Europe.

• In Canada, increased demand for vegetable oi ls, especially rapeseed oil for biodiesel production, and for barley is expected to reduc e wheat area, which causes Canadian exports to trend slowly downward.

• The EU set-aside rate, currently 10 percent, is assumed to be lowered during the projections. However, most of any increase in planted area will go to rapeseed.

• Ukraine, Russia, and Kazakhstan have become si gnificant wheat exporters in recent years. Low costs of production and new investment in th eir agricultural sectors have enabled their world market share to climb to as high as 18 percent in 2005/06. 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, b ecause of the region’s weather extremes, high year-to-year volatility in pr oduction and trade can be expect ed. Also, continued real appreciation of these countrie s’ currencies, caused mainly by domestic inflation, could mitigate the rise in exports.

• China has been a small net exporter of wheat in recent years, but becomes a net importer of nearly 2 million tons annually by 2016. This is offset by other Europe, mostly Romania and Bulgaria, which shifts from a small net importer to a net exporter of more than 2 million tons. Most of these exports go to the EU-25.

• 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 as stocks remain relatively tight.78 USDA Long-term Pro j ections, Februar y 200 7 0 20 40 60 80 100 120 140

1990 1995 2000 2005 2010 2015 Other 1/ Sorghum Barley Corn Global coarse grain trade, by type

Million metric tons

1/ Rye, oats, millet, and mixed grains.

Growth in coarse grain trade is strongly linke d to expansion of livestock production in regions unable to meet their own forage and 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 77 percent of a ll coarse grain trade through th e projection period, followed by barley (17 percent), a nd sorghum (4 percent).

• Commercialization of livestock feeding ha s been a driving for ce behind the growing dominance of corn in in ternational 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 qu ality feeds are used, boosting the demand for corn and soybean meal.

• World coarse grain trade is projected to increase about 2 percent a year, with corn capturing some share of the total market from sorghum. Mexico’s composition of imports accounts for most of the shift. Under the North American Free Trade Agreement (NAFTA), Mexico’s over- quota tariff on U.S. and Canadian corn ends in 2008. Consequently, Mexico’s grain imports shift more to corn rather than sorghum. Also, after 2007/08, Mexico’s imports of kibbl ed and cracked corn (processed corn that is tariff free) are entirely replaced by whole-grai n corn. Mexico’s corn imports continue to rise through the rest of the projections, while sorg hum imports resume growth after 2010/11.USDA Long-term Projections, February 2007 79 0 30 60 90 120 150

1990 1995 2000 2005 2010 2015 Other

FSU & OE 1/

China

Africa & M. East

Mexico

Latin America

East Asia
European Union 2/ Global coarse grain imports

Million metric tons

1/ Former Soviet Union and other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 2/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992. World coarse grain trade expands about 21 milli on tons (21 percent) from 2007 to 2016. About two-thirds of global coarse grain pr oduction is used as animal feed. Industrial uses, such as starch, ethanol, and malt production, are relatively small but growing. Food use of coarse grains, concentrated in parts of Latin America, Afri ca, and Asia, has generally declined over time.

• Steady longrun growth in the livestock sect ors of developing countries in Asia, Latin America, North Africa, and the Mi ddle East is projec ted to account for most of the growth in world imports during the next decade.

• Mexico’s corn imports are projected to rise from 6.7 million tons in 2005/06 to 11 million tons in 2016. Imports will be stimulated by risi ng 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 have tariff-free status.

• Canadian corn imports double between 2006 and 2016 due to rising demand for corn for feed and for ethanol production and limited capacity to expand production.

• North Africa and the Middle East experience co ntinued growth in import demand for grain and protein meals through 2016, as rising popu lations and increasing incomes sustain strong demand growth for domestically produced animal products. In Egypt, outbreaks of avian influenza have shifted government policy towards importing poultry meat rather than importing feedstuffs to produce poultry.

• Increasing meat imports will limit coarse grain imports in Japan, South Korea, and Taiwan. By 2016, relatively low-priced feed wheat is projected to replace about 1 million tons of South Korean corn imports.

• The EU-25’s corn imports from Eastern Eur opean countries are expected to increase, particularly from Romania and Bulgaria as they have gained duty-free access due to accession to the EU.

• Coarse grain imports by countries in Southeast Asia rise more than a million tons in the projections as increased demand for livestock products surpasses thei r capacity to grow more feed grains.80 USDA Long-term Pro j ections, Februar y 200 7 0 10 20 30 40 50 60 70 80 90 100

1990 1995 2000 2005 2010 2015 Other 1/ Argentina Other Europe China United States Global corn exports

Million metric tons

1/ Republic of South Africa, Brazil, EU, former Soviet Union, and others.
The United States dominates world trade in coarse grains, particularly cor n. However, increasing use of corn for U.S. ethanol production and rising world prices are assumed to limit U.S. export growth. During the next half decade, some count ries respond to higher world prices by increasing corn production and exports—most notably Argen tina, some countries in Eastern Europe, the Republic of South Africa, Ukraine, and Brazil. Stil l, U.S. corn exports are projected to grow after the ramp up in domestic ethanol production slows in 2009. 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, rema ins the world’s second largest corn exporter. Argentina’s corn planted area gr adually increases in response to higher prices. Corn exports rise steadily by more than 60 percent to 21 millio n tons. Argentina and other South American countries increase corn exports to Chile to support its expandi ng pork exports to South Korea.

• The Republic of South Africa boosts corn exports slightly to nearly 3 million tons. Some exports go to East Asian markets and some shipments of white corn are exported to neighboring countries for food use. Uncertainties associated with the land reform program in the Republic of South Afri ca are assumed to limit increases in production.

• Corn exports from non-EU-25 Eastern European countries, primarily Romania and Bulgaria, rise to more than 3 million tons by 2016. Favorable resource endowments, increasing economic openness, greater investme nt in their agricultural sector s, and duty-free access to the EU-25 for Romania and Bulgaria are behind the projected gain s in production and trade.

• Brazil’s corn exports increase ra pidly in the early years of the projections in response to higher corn prices relative to soybean pri ces. Brazil targets niche market demand for nongenetically modified grain. However, st rong growth in domestic demand from its livestock sector and the prof itability of growing soybean s limits corn exports.

• China’s corn exports decline in the projec tions, reflecting strengt hening domestic demand driven by its expanding livestock and industrial sect ors. It is assumed that Chinese policy will tend to favor importing soybeans rather than corn.USDA Long-term Projections, February 2007 81 0 2 4 6 8 10 12 14 16

1990 1995 2000 2005 2010 2015 China: Corn imports and exports

Million metric tons

Exports

Imports

As more U.S. corn is used to produce ethanol, China is assume d to increase its corn production, slowing its decline in exports and its increase in imports. Nonetheless, China is projected to become a net corn importer midway through the projection period as demand for livestock feed overtakes China’s internal suppl ies of corn. China continues to export corn throughout the projection period, although in decl ining amounts, due to regional supply and demand differences. Northern China runs a corn surplus, while southern China has a corn deficit.

• Corn is the favored crop in northeast China. Proximity to South Korea and other Asian markets provides a nearby source of dema nd, while various government measures— including waivers of certain tr ansportation construction taxes, and a rebate of the valueadded tax on exported corn—keep corn expor ts competitively priced in international markets. High ocean-freight rates raise the deliv ered 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.

• China’s corn consumption exceeded produc tion during the early 2000s, pushing stocks lower. As consumption continues to grow, China is projected to increase imports and reduce exports, and to eventually become a net corn importer by 2012. Livestock feeding continues to increase in response to income gr owth and rising meat demand. Industrial use of corn, especially for starch, is also expected to grow robustly in Ch ina, but direct human consumption declines.82 USDA Long-term Pro j ections, Februar y 200 7 0 5 10 15 20

1990 1995 2000 2005 2010 2015 Other

Saudi Arabia

Other N. Africa & M. East

FSU & OE 1/

Latin America 2/

China
Japan

United States Global barley imports

Million metric tons

1/ Former Soviet Union and other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 2/ Includes Mexico.

Global barley trade expands more than 3 million t ons (18 percent) during the projection period. Rising demand for both malting and feed barl ey underpin the increased trade.

• Feed barley imports by North African and Mi ddle Eastern countries grow steadily through the period. In the mid-1990s, corn overtook barl ey as the principal coarse grain imported by these countries, due mainly to rising poultr y production. This patt ern is expected to continue through the projection period. Howe ver, the North Africa and Middle East region is expected to remain the worl d’s largest barley importing area.

• Saudi Arabia—the world’s foremost barley importer—accounts for over 30 percent of world barley trade through the coming decade. Saudi Arabia’s barley imports are used primarily as feed for camel s, goats, sheep, and poultry.

• 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 be ing aided by foreign i nvestment. China’s breweries use rice and other grains, as well as malting barley, which limits the growth in imports of malting barley. Australia and Canada are China’s main sources of malting barley imports.USDA Long-term Projections, February 2007 83 0 5 10 15 20

1990 1995 2000 2005 2010 2015 European Union 1/

Australia

FSU 2/

Canada

Other Global barley exports

Million metric tons

1/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992. 2/ Former Soviet Union.

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-25 as a result of Common Agricultural Policy (CAP) reform. The aboli tion of EU intervention for rye, combined with high barley prices, will stimulate the allocation of more area to barley production. However, EU-25 exports to non-EU countries are project ed to hover around 3 million tons over the projection period (15 percent of world trade), as the EU-25 is expected to be reluctant to subsidize exports.

• The FSU remains a major barley exporter throughout the coming decade as exports surpass 7 million tons. Together, the FSU and EU-25 account for more than 50 percent of world barley trade.

• Malting barley is a different quality than feed barley and commands a substantial price premium over feed barley. Th is premium is expected to in fluence planting decisions in Canada and Australia and, in both countries, ma lting barley’s share of total barley area rises during the projection period.84 USDA Long-term Pro j ections, Februar y 200 7 0 2 4 6 8 10

1990 1995 2000 2005 2010 2015 Other
Mexico Japan Global sorghum imports

Million metric tons

World sorghum trade, which averaged nearly 6.5 m illion tons during the last decade, declines to just below 5 million tons in the middle of the pr ojection period before rising slightly through the remainder of the coming decade. This trade is driven almost entirely by trade between the United States and Mexico.

• Mexico is the world’s leading sorghum importer. However, corn imports are expected to replace sorghum and kibbled corn imports as Mexico’s over-quota tariff on U.S. and Canadian corn ends in 2008. In the projections, Mexico’s sorghum imports increase slightly in the later years, but remain just below 2.5 million tons. Even at this reduced im port level, Mexico is expected to account for about 50 pe rcent of world sorghum imports.

• Japan imports a fairly constant volume of sorghum (1.4 million tons) throughout the period to maintain diversity and stability in its feed grain supplies.

• The United States is the larges t exporter of sorghum, accounting for more than 80 percent of world trade in recent years. During the projectio n period, the U.S. share declines slightly as some of its sorghum exports to Mexico shift to corn.

• The primary sorghum markets for Argentina, th e world’s second larges t exporter, are Japan, Chile, and Europe. In Argentina, prices and profitability favor planting other crops, particularly soybeans and corn, so sorghum e xports remain flat duri ng 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 Br azil, sorghum is increasingly planted during the dry season betw een crops of soybeans or cotton.USDA Long-term Projections, February 2007 85 0 20 40 60 80 100

1990 1995 2000 2005 2010 2015 0 2 4 6 8 10 12 14 16 Global exports: Soybeans, soybean meal, and soybean oil
Soybeans and soybean meal, million metric tons

Soybeans

Soybean meal Soybean oil Soybean oil, million metric tons

Strong income and population growth in develo ping countries generates increasing demand for vegetable oils for food consumption and for pr otein meals used in livestock production. Additional demand is generated by the use of soybean oil in biodiesel production in some countries. World trade in soybeans and soybean oil both grow at an average annual rate of 3.5 percent through the projection period, comp ared with 2.7 percent for soybean meal.

• Prices for vegetable oils rise due to expansion of biodies el production. As more of the value of oilseeds derives from the oil content re lative to the protein me al content, vegetable oil prices rise in comparison to pri ces for oilseeds and protein meals.

• Many countries with limited opportunity to e xpand oilseed production co ntinue investment in oilseed crushing capacity, such as China a nd some countries in No rth Africa, the Middle East, and South Asia. As a result, import de mand for soybeans and rapeseed grows rapidly. However, strong competition in international prot ein meal markets is expected to pressure crushing margins and shift some of the import demand for oilseeds to cheaper meals. The steady competitive pressure of new oilseed crus hing capacity is expected to result in some inefficient crushers going out of business.

• China’s expansion of domestic crushing capac ity instead of importing protein meal and vegetable oil significantly influences th e composition of world trade by raising international 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, despit e increasing domestic feed use. Its share of world exports of soybeans plus the soybean equivalent of soybean meal exports rises from about 30-35 percent in recent year s to 46 percent by 2016.

• The expansion in Argentine soybean area slows as incentives to grow corn and sunflower seed improve and conversion of pasture land to crop land slows.86 USDA Long-term Pro j ections, Februar y 200 7 0 20 40 60 80 100

1990 1995 2000 2005 2010 2015 Other China & Hong Kong N. Africa & M. East Latin America 1/ East Asia European Union 2/ Global soybean imports

Million metric tons

1/ Includes Mexico. 2/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992.
World soybean trade is projected to rise rapidly, climbing more th an 27 million metric tons (36 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 im ports of soybean meal have resulted in declining soybean im ports since then.

• China will face policy decisions regarding trad eoffs in producing or importing corn and soybeans. The projections assume that Chinese policies will tend toward maintaining domestic corn production and importing soybeans. Thus, China accounts for 78 percent of the world’s 27-million-ton growth in soybean im ports over the next 10 years. Significant investments in oilseed crushing infrastructu re 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 vegetabl e oils for biofuels production is assumed to have only a minimal impact on Ch ina’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, the growth in this region’s import demand for protein meal and oilseed s slows during the coming decade

• As Argentina seeks to operate its expandi ng crushing facilities at full capacity, it is projected to import nearly 3 million tons of soybeans from Brazil, Paraguay, Uruguay, and Bolivia by the end of the period.USDA Long-term Projections, February 2007 87 0 20 40 60 80 100

1990 1995 2000 2005 2010 2015 Other

Other S. America

Brazil
Argentina

United States Global soybean exports

Million metric tons

The three leading soybean exporters—the Unite d States, Brazil, and Argentina—account for more than 90 percent of world trade.

• With continuing area gains, Brazil maintains its position as the world’s leading exporter of soybeans and soybean products. Combating so ybean rust disease increases production costs. However, because of the increased domestic demand for soybean meal for feed and for soybean oil for human consumption and biodiesel production, s oybeans 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 produc tion 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 pl antings in the Cerrado regions, the growth rate for Brazil’s soybean planted area is projected to average more than 4 percent a year, reaching about 32 million hectares by 2016. Soybean exports are projected to double.

• In the United States, projected declines in soybean acreage and increased domestic crush limit exportable supplies.

• Argentina’s export tax structure favors domestic crushing of whole se eds and exporting the products. Also, Argentina is projected to dive rt some land from soybeans to corn. As a result, Argentina’s soybean exports dec line slightly to about 6 million tons.

• Soybean exports from Russia and the Ukrain e increase slightly in response to higher international market prices.88 USDA Long-term Pro j ections, Februar y 200 7 0 10 20 30 40 50 60 70

1990 1995 2000 2005 2010 2015 Other FSU & OE 1/ N. Africa & M. East Latin America 2/ East Asia European Union 3/ Global soybean meal imports

Million metric tons

1/ Former Soviet Union and other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 2/ Includes Mexico. 3/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992.
World trade in soybean meal grows briskly duri ng the projections, rising nearly 15 million tons (more than 25 percent) by 2016. Continuing growth in the demand for live stock products coupled with limited capability to increase oilseed production boosts demand for soybean meal by a number of countries with rising middle-income popul ations. 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 feeds.

• The EU remains the world’s la rgest destination for soybean meal throughout the projection period, despite increased domestic feeding of grains. Growth in soybean meal imports is expected to continue even t hough there will be increased comp etition from coarse grains from acceding countries, and more rapeseed m eal available as a result of the biofuels expansion. These factors are partially offset by an increase in the dairy quota which increases soybean meal feeding.

• The regions of Southeast Asia, North Afri ca, the Middle East, and Latin America 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 de mand for protein feed and vege table oils is projected to continue. The crushing industry 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.USDA Long-term Projections, February 2007 89 0 10 20 30 40 50 60 70

1990 1995 2000 2005 2010 2015 Other Argentina

Brazil
United States Global soybean meal exports

Million metric tons

Argentina, Brazil, and the United States remain the three major exporte rs 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 exporter, incr eases its share of soybean meal exports from around 45 percent in recent years to more th an 50 percent in th e latter portion of the projection period. The export shares of Brazil, the United States, and other exporters fall. Argentina maintains high utilization of its growing crushing capacity by importing soybeans from Brazil and other South American countries.

• In Brazil, strong growth in domestic meal consumption due to rapid expansion of the poultry and pork sectors limits increases in soybe an meal exports. Also, domestic soybean crushing capacity is not expect ed to grow as fast as soyb ean production because Brazil’s differential export tax structur e favors exporting soybeans rather than soybean meal or soybean oil.

• U.S. soybean meal exports could see growth for the first 2 years of the projection period, but slow thereafter as soybean stocks are reduced and limited production growth tightens the supply available for crushing.

• The EU continues to be a small but steady e xporter of soybean meal to Russia and other East European countries. India remains an exporter, although export volume declines as domestic use, especially fo r poultry feed, rapidly expands.90 USDA Long-term Pro j ections, Februar y 200 7 0 2 4 6 8 10 12 14

1990 1995 2000 2005 2010 2015 Rest of world EU, FSU, & OE 1/ India China Other Asia 2/ N. Africa & M. East Latin America 3/ Global soybean oil imports

Million metric tons

1/ European Union, former Soviet Union, and other Europe. 2/ Asia excluding India and China. 3/ Includes Mexico.
World demand for soybean oil imports climbs 3.6 million metric tons (36 percent) in the projections, bolstered by increased food us e and increased demand for use in biofuel production. China and India are the world’s two largest s oybean oil importers. In recent years, their combined imports have been around 3.5 milli on 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 Middl e East, and Latin America (particularly Central America and the Caribbean) drive rapi d gains in soybean oil imports. Rising international prices for soybean oil will te mper consumption, however, especially in developing countries.

• India is one of the world’s la rgest soybean oil importers. Factors that contribute to continued growth in imports include burgeoni ng domestic demand for vegetable oils and limitations on domestic production of oilseeds. Low yields, associated with erratic rainfed growing conditions and low input use, inhibit growth of oilsee d production in India. Lower Indian tariffs on soybean oil (held down by World Trade Organization (WTO) tariffbinding commitments) compared with tariffs fo r other vegetable oils support continued large imports of soybean oil.

• China experiences a growing demand for vegeta ble oils. However, land-use competition from other crops constrains area planted to oilseed crops. As a result, demand outpaces domestic vegetable oil production and fuels a mo derate expansion in soybean oil imports, although China seeks to restrain them to support margins for domestic crushers.USDA Long-term Projections, February 2007 91 0 2 4 6 8 10 12 14

1990 1995 2000 2005 2010 2015 Other Argentina Brazil European Union 1/ United States Global soybean oil exports

Million metric tons

1/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992.

Argentina’s and Brazil’s combined share of worl d soybean oil exports rises from less than 80 percent in recent years to about 85 pe rcent by the end of the projections.

• Argentina is the leading exporter of soybean oil, reflecting the country’s large crush capacity, its small domestic market for soybean oil, and an export tax structure that favors exports of soybean products rather than soybeans. Increa ses in soybean crush and soybean oil exports are supported by gains in Argentine soybean produc tion due to extensive double-cropping, further adjustments to crop-pasture rotations, and the add ition 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 ta x 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 export s and its share of world trade.

• The European Union and the United States re main the world’s next largest soybean oil exporters, although their export volu mes and shares of world trad e continue a downward trend. In the EU, exportable supplies of vegetable oils are limite d by the growth in biodiesel production.92 USDA Long-term Pro j ections, Februar y 200 7 0 5 10 15 20 25 30 35 40

1990 1995 2000 2005 2010 2015 Other Other Asia Indonesia N. Africa & M. East Sub-Saharan Africa EU, FSU, & OE 1/ Latin America 2/ Global rice imports

Million metric tons

1/ European Union, former Soviet Union, and other Europe. 2/ Includes Mexico.
Global rice trade is projected to grow 2.4 per cent per year from 2007 t o2016. By 2016, global rice trade reaches nearly 35 million tons, nearly 25 percent above the record set in 2002.

• In recent years, long-grain varieties have accounted for arou nd three-fourths of global rice trade and are expected to account for the bulk of trade growth over the next decade. Longgrain rice is imported by a broad spectrum of co untries in South and Southeast Asia, much of the Middle East, nearly all of Sub-Saharan Af rica, and most of Latin America. Much of the increase in rice consumption in th ese regions reflects population growth.

• Medium- and short-grain rice account for 10-12 pe rcent of global trade, with Japan, South Korea, Taiwan, Turkey, Jordan, and Papua New Guinea the major importers. Expansion in medium-grain rice trade is projected to be much smaller than for long grain. Among the Northeast Asian buyers, only South Korea is pr ojected to increase pu rchases over the next decade. All rice imports by Japan, South Kor ea, and Taiwan are the result of minimum import commitments under the WTO.

• Aromatic rice, primarily basmati and jasmine, makes up most of the rest of global rice trade. Aromatics typically sell at a substant ial price premium over l ong- and medium-grain varieties. Aromatics are imported mostly for high-income consumers.

• Indonesia and Bangladesh, two of the world’ s leading rice-importing countries, will experience rising food demand due to growing populations. However, land constraints and already high cropping intensit ies indicate little opportunity for either country to significantly expand production. Th us, their imports are projected to increase over the next decade and account for 28 percent of the increase in rice trade.

• In Sub-Saharan Africa and the Middle East, strong demand growth is driven by rapidly expanding populations. But oppor tunities to expand production are limited by climatic conditions in the Middle East, and by infrastr ucture deficiencies in Sub-Saharan Africa. Sub-Saharan Africa accounts for 20 percent of th e increase in world rice trade during the projection period.USDA Long-term Projections, February 2007 93 0 5 10 15 20 25 30 35 40

1990 1995 2000 2005 2010 2015 Other India China Thailand Pakistan Vietnam South America United States Global rice exports

Million metric tons

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

• Thailand and Vietnam, the world’s largest rice- exporting countries, account for almost half of all rice exports in the coming decade. Vi etnam exports primarily long-grain rice. Thailand exports aromatic, regu lar long-grain, and glutinous varieties of rice. Rising production, a result of higher yi elds, and declining per capita consumption, particularly in Thailand, drive the expansion in exports from both countries.

• India is the third-largest rice exporter. I ndia has been a major exporter since the mid1990s, although export levels have been rather volatile, primarily due to fluctuating production and stock levels. Exports are projec ted to increase over the next decade as high internal prices stimulate production and e xportable supplies. India exports both lowquality long-grain rice and smaller qua ntities of high-quality basmati rice.

• The United States is projected to remain the fourth-largest rice-expo rting country. Rising domestic demand, fractional area expansion, and a slower growth rate in yields constrain the expansion of U.S. rice exports. The United States exports both long-grain and medium/short-grain rice.

• Pakistan is the world’s fift h-leading exporter. Pakistan has boosted rice area and production in the past few years. However, Pa kistan has little ability to expand rice area beyond its current record level, and its agricultural sector is confron ting a growing water shortage and a decaying infrastructure. Rice exports increase very slightly, to about 3.1 million tons by 2016 . Pakistan exports both high-quali ty basmati and low-quality longgrain rice.

• Rice exports from China have declined from about 2 million tons in most years during the half-decade ending in 2003, to about 1 million to ns annually since then. Little, if any, growth in China’s rice exports is projected. Pr oduction is projected to decline very slightly during the next decade, as declining ar ea more than offsets rising yields. Consumption decreases fractionally ov er the next decade as declining per capita rice consumption more than offsets a rising population. China expor ts high-quality, medium/short-grain rice to Northeast Asian markets and low-quality, long- grain rice to Sub-Saha ran Africa and some lower-income Asian markets.94 USDA Long-term Pro j ections, Februar y 200 7 0 10 20 30 40 50

1990 1995 2000 2005 2010 2015 Other China Latin America 1/ Southeast Asia 2/ South Asia 3/ EU, FSU, & OE 4/ East Asia Global cotton imports

Million bales

1/ Includes Mexico. 2/ Malaysia, Indonesia, Ph ilippines, Thailand, and Vi etnam. 3/ Bangladesh, India, and Pakistan. 4/ European Union, former Soviet Union, and other Europe.

With global cotton consumption growing dramatically, international trade has become increasingly important in world cotton markets. Not only ha s textile trade liberalization helped boost world cotton demand through increased efficiency, but geogr aphic shifts in the mill use of cotton have increased the role of trade in meeting the gl obal textile industry’s n eed for cotton. Trade’s importance has rebounded in recent years as China’ s and, to a lesser extent , Pakistan’s textile sectors have grown substantially fa ster than their cotton production.

• The textile industries in China, India, and Pa kistan 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 text ile industry’s growth rapidly accelerated with a booming economy and WTO accessi on. Both its textile industry and its cotton imports are expected to grow more slowly than the rapid increase 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 47 percent of world imports by 2016.

• Pakistan has emerged as a major importer in rece nt years, and is expected to remain in this role throughout the projection period, eventua lly overtaking Turkey as the second-largest global market.

• 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. Consequently, Turkey’s cotton imports are projected to decline slowly over the nex t 10 years.

• The EU, Japan, Taiwan, and South Korea all stea dily reduce their cott on imports as textile trade reforms and/or higher wages in these countries drive textile production to countries with lower wages and other costs.USDA Long-term Projections, February 2007 95 0 10 20 30 40 50

1990 1995 2000 2005 2010 2015 Other Former Soviet Union South America Australia Sub-Saharan Africa United States Global cotton exports

Million bales

Globalization is expected to continue to move raw cotton production to c ountries with favorable resource endowments and technology. Land is a key input factor, but 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. Traditional pr oducers with large land bases suitable for cotton production are expected to be nefit from post-MFA trade patterns. Such producer/exporter regions incl ude the United States, Sub-Sa haran Africa, and Brazil.

• The United States continues as the worl d’s leading cotton e xporter throughout the projections. Exports dip to 17.2 million bales in 2008/09, but grow to more than 19 million bales by 2016/17.

• The Central Asian countries of the former S oviet Union have been the principal U.S. competitors since the early 1990s. Howeve r, government policies in Central Asia promoting investment in textiles have result ed, to some extent, in exports of textile products rather than exports of raw co tton. Furthermore, the region’s economic liberalization is far from complete, and cott on production is expected to grow only slowly.

• Sub-Saharan Africa’s exports have overtaken Central Asia’s e xports in large part due to economic reforms. West Africa’s 1994 exchange rate 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, seve ral southern African countries began increasing their cotton production, aided by reforms such as eliminatin g marketing board monopolies. Continued increases in output are expect ed as producers take advantag e of more export-oriented government policies, and Bt cotton is even tually adopted by the region’s producers.

• Improved Indian cotton crop yields , in part due to the adopti on of Bt cotton, have raised India’s output in recent years. Rapid yield growth is projected to continue with the increase in cotton output being used for domestic textile production rather than for export.96 USDA Long-term Pro j ections, Februar y 200 7 0 2 4 6 8 10

1990 1995 2000 2005 2010 2015 Meat exports 1/

Million metric tons

1/ Major exporters. Beef and veal

Pork Poultry

The growth rates of exports from major export ers of beef, pork, and pou ltry meat average 1.3, 1.5, and 1.9 percent a year, respectively, between 200 7 and 2016. During this period, exports rise nearly 1 million tons for beef, 0.7 million for por k, and 1.3 million for poultry. Rising per capita incomes, combined with population growth in a number of countries , are the driving force behind the projected growth in global meat demand.

• BSE in Canada and the United States has resu lted in changes in Canada’s beef and live cattle exports to the United States. In 2004- 05, Canadian beef exports recovered from much of the decline that followed its 2003 BS E case, but then fell again in 2006. During the coming decade, Canadian beef exports are expected to recover onc e again, rising to a level just below their 2002 record. Canadian exports to the United States of live cattle under 30 months of age are assumed to continue.

• EU enlargement from EU-15 to EU-25 resu lts in greater shipments between the EU member countries and restrained trade of meat outside the EU -25. EU beef exports remain well below the annual WTO export-subsidy limit of 817,000 tons, as a stronger euro limits their competitiveness and policy changes lowe r 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 and other recent policy changes have made Argentina’s exports less competitive. Beef exports are projected to decline, but rema in above their pre-2004 levels.

• The projections assume that Brazil does not gain nationwide FMD-free status. However, exports from Brazil’s expanding pork sector are expected to be competitive in pricesensitive markets, and co untries less concerned about FMD, such as Russia.

• During the coming decade, Brazil is expected to remain the largest exporter of poultry products, due to low production cost s and competitive export prices.

• Poultry exports from the United States ar e expected to continue to increase.

• Exports of poultry from Thailand and China w ill be limited to fully cooked products for most of the projection period because avian influenza has occurred in those countries.USDA Long-term Projections, February 2007 97 0 1 2 3 4 5 6

1990 1995 2000 2005 2010 2015 Russia East Asia N. Africa & M. East European Union Canada & Mexico United States Beef imports 1/

Million metric tons

1/ Selected importers. 2/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992.
Beef imports by major importers expand about 1.4 million tons (27 perc ent) between 2007 and 2016. Traditionally, beef trade occurred largely be tween developed countries. However, Brazil has become a large exporter of lower quality beef that is impor ted by lower income countries and countries with less stringent impor t restrictions concerning FMD. The projections assume gradual recovery of U.S. and Canadian e xports to Japan and South Korea.

• Higher income countries, such as Japan and S outh Korea, increase beef imports, reflecting domestic cattle sectors that are constraine d by land availability. These imports are primarily of grain-fed beef. U.S. beef exports to these countries ar e projected to rebuild over the next 10 years, but do not completely re cover to levels attained prior to the first U.S. BSE case in December 2003. Also, there continues to be an increased 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 s lightly through the period. Continued strong Asian imports of beef from Australia and New Zealand enable these exporters to maintain significant levels of exports.

• Robust import growth of U.S. higher qua lity beef is projected for Mexico.

• The projections assume that Russia’s tariff-ra te 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.98 USDA Long-term Pro j ections, Februar y 200 7 0 1 2 3 4 5

1990 1995 2000 2005 2010 2015 Mexico

East Asia

Russia China & Hong Kong
United States Pork imports 1/

Million metric tons

1/ Selected importers.

The major pork importers are projected to increase trade by nearly 1 million tons (26 percent) between 2007 and 2016.

• Mexican pork imports increase nearly 200,000 tons between 2007 and 2016, making Mexico one of the fastest growing pork importe rs. Increases in income and population are the primary drivers of Mexico’s increasing demand for pork products.

• Higher income countries of East Asia, such as Japan, Hong Kong, and South Korea, increase pork imports as their domestic hog sectors are constrained by environmental concerns and high imported feed costs. In South Korea and Japan, animal health related concerns regarding beef and poultry also boost pork demand.

• As with beef, the projections assume that 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 Russi an meat producers’ ability to respond. By 2016, Russia is projected to import about 250,0 00 tons more pork than in 2007, growing more 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 al so continue to rise but China’s net pork exports rise only slightly during the comi ng decade.USDA Long-term Projections, February 2007 99 0 1 2 3 4 5 6

1990 1995 2000 2005 2010 2015 Russia Other N Afr. & M. East European Union 2/ East Asia China & Hong Kong Saudi Arabia Mexico Poultry imports 1/

Million metric tons

1/ Selected importers. 2/ EU-25 excludes intra-trade after 2002, EU-15 intra-trade before 2003, Slovenia before 1992. Poultry meat imports by major importers are projected to increase by about 0.8 million tons (15 percent) from 2007 to 2016.

• Russia is expected to remain the world’s la rgest poultry importer, with higher consumer income increasing demand for poultry products and offsetting slow population growth. However, the increase in demand is expected to be filled mostly by domestic production, and Russia’s poultry imports are expected to decline slightly during the coming decade.

• In Mexico, strong economic growth raises poul try consumption and imports. Domestic poultry production continues to increase, but lags rising consumer demand. Although beef is the preferred meat among Mexico’s consum ers, consumption of poultry meats rises more rapidly because of its lower price.

• Poultry consumption growth in China is met by expanding domestic production and growing imports.

• Because of avian influenza, some major poul try-exporting countries such as Thailand and China will shift 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 rise strongly. Outbreaks of avian influenza in some countries may slow growth in domestic production and increase re liance on imports to fill consumption needs.

• Rising consumer incomes increase reliance on larger poultry imports in a number of Central America and Caribbean countries. Th e Central America Free Trade Agreement is also expected to stimulate trade. Together with Mexico, these countries form one of the largest markets for poultry imports.100 USDA Long-term Pro j ections, Februar y 200 7 Table 34. Coarse grains trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers Former Soviet Union 1 1.1 1.0 1.0 1.1 1.1 1.2 1.2 1.3 1.3 1.4 1.4 1.5 Other Europe 0.7 0.6 0.7 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.5 0.5 European Union 2 3.5 3.7 3.4 3.8 4.1 4.2 4.4 4.5 4.7 4.8 5.0 5.0 North Africa & Middle East 28.1 28.0 28.5 28.5 29.0 29.6 30.1 30.6 31.1 31.6 32.2 32.8 Sub-Saharan Africa 3 2.9 1.7 1.6 1.7 1.7 1.8 1.8 1.9 2.0 2.1 2.1 2.2 Japan 19.8 19.5 19.5 19.4 19.4 19.3 19.3 19.3 19.2 19.1 19.1 19.0 South Korea 8.6 8.6 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 Taiwan 4.7 4.7 4.6 4.7 4.7 4.7 4.7 4.8 4.8 4.8 4.8 4.8 China 2.3 2.3 2.5 3.3 3.8 4.4 4.9 5.4 5.8 6.3 6.8 7.2 Other Asia & Oceania 5.2 4.6 4.3 4.2 4.3 4.4 4.5 4.7 4.8 5.0 5.1 5.4 Mexico 9.8 9.3 9.3 10.4 10.7 11.2 11.6 12.0 12.4 12.8 13.2 13.6 Central America & Caribbean 4.7 4.8 4.7 4.7 4.9 4.9 5.0 5.0 5.1 5.2 5.2 5.3 Brazil 1.2 0.9 0.5 0.5 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.9 Other South America 7.2 7.1 6.7 6.8 6.9 7.0 7.1 7.1 7.2 7.2 7.2 7.2 Other foreign 4 3.6 4.9 4.4 5.2 6.3 6.4 6.5 6.6 6.8 6.9 7.1 7.3

United States 2.0 2.5 2.4 2.7 2.8 2.7 2.7 2.7 2.7 2.8 2.8 2.8

Total trade 105.4 104.2 103.0 106.3 109.6 111.7 113.8 115.7 117.8 120.1 122.1 124.2

Exporters European Union 2 3.8 4.2 4.0 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 China 3.8 4.0 3.9 3.5 3.0 2.9 2.8 2.5 2.1 1.9 1.7 1.4 Argentina 9.0 12.0 13.5 16.5 18.0 18.5 19.0 19.5 20.1 20.6 21.1 21.7 Australia 5.7 2.9 5.2 5.4 5.5 5.5 5.6 5.6 5.6 5.7 5.7 5.8 Canada 4.1 3.5 2.8 3.4 3.6 3.7 3.8 3.9 4.0 4.1 4.2 4.3 Republic of South Africa 0.8 0.9 1.5 1.7 1.9 2.1 2.2 2.4 2.5 2.6 2.7 2.8 Other Europe 2.4 2.5 2.5 2.8 3.0 3.2 3.4 3.5 3.7 3.9 4.0 4.2 Former Soviet Union 1 8.4 9.4 9.5 9.5 9.8 10.2 10.5 10.6 10.7 10.8 10.8 10.8 Other foreign 7.4 4.3 6.6 8.2 9.3 8.2 7.4 7.2 7.4 7.6 7.5 7.6

United States 60.1 60.5 53.4 51.3 51.3 53.2 55.1 56.4 57.6 58.9 60.2 61.4
Percent

U.S. trade share 57.1 58.1 51.9 48.2 4 6.8 47.6 48.4 48.7 48.9 49.1 49.3 49.5 1/ Covers FSU-12, includes intra-FSU trade. 2/ Covers EU-25, excludes intra-EU trade. 3/ Includes Republic of South Africa. 4/ Includes unaccounted. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tonsUSDA Long-term Projections, February 2007 101 Table 35. Corn trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers European Union 1 3.2 3.0 3.0 3.3 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.1 Former Soviet Union 2 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 Egypt 4.5 4.8 4.4 4.2 4.1 4.2 4.3 4.3 4.4 4.5 4.5 4.6 Algeria 1.9 2.0 2.2 2.2 2.3 2.4 2.4 2.5 2.6 2.6 2.7 2.8 Morocco 1.4 1.5 1.5 1.5 1.6 1.6 1.6 1.6 1.7 1.7 1.7 1.8 Iran 2.3 2.5 2.7 2.5 2.5 2.6 2.7 2.7 2.8 2.8 2.9 3.0 Saudi Arabia 1.4 1.5 1.6 1.6 1.6 1.7 1.7 1.7 1.7 1.8 1.8 1.8 Turkey 0.1 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other N. Africa & Middle East 4.8 5.0 4.9 5.0 5.2 5.3 5.4 5.5 5.6 5.7 5.8 6.0 Japan 16.6 16.5 16.3 16.2 16.2 16.1 16.1 16.0 16.0 15.9 15.9 15.8 South Korea 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.4 Taiwan 4.5 4.5 4.5 4.5 4.5 4.6 4.6 4.6 4.6 4.6 4.7 4.7 China 0.1 0.1 0.2 1.0 1.4 1.9 2.3 2.7 3.1 3.6 4.0 4.3 Indonesia 1.5 1.3 1.3 1.2 1.2 1.2 1.3 1.3 1.4 1.4 1.5 1.5 Malaysia 2.5 2.6 2.6 2.7 2.7 2.8 2.9 3.0 3.1 3.1 3.2 3.4 Other Asia & Oceania 1.2 0.6 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 Canada 2.0 2.8 2.0 2.8 3.9 4.0 4.1 4.2 4.4 4.5 4.7 4.9 Mexico 6.7 6.3 6.7 8.0 8.4 8.8 9.3 9.6 10.0 10.4 10.7 11.0 Central America & Caribbean 4.7 4.8 4.7 4.7 4.8 4.9 4.9 5.0 5.1 5.2 5.2 5.2 Brazil 1.0 0.8 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.5 0.5 0.5 Other South America 6.7 6.7 6.2 6.3 6.4 6.5 6.5 6.6 6.6 6.7 6.7 6.7 Sub-Saharan Africa 3 2.3 1.3 1.3 1.3 1.3 1.4 1.4 1.5 1.6 1.7 1.7 1.8 Other foreign 4 0.5 2.7 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9

United States 0.2 0.3 0.4 0.5 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Total trade 79.0 80.8 78.1 81.1 84.0 85.7 87.4 88.9 90.7 92.5 94.0 95.7

Exporters European Union 1 0.1 0.5 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 China 3.7 4.0 3.9 3.5 3.0 2.9 2.8 2.5 2.1 1.9 1.7 1.4 Argentina 8.5 11.5 13.0 16.0 17.5 18.0 18.5 19.0 19.5 20.0 20.5 21.0 Brazil 3.5 2.0 4.2 5.5 6.6 5.4 4.5 4.3 4.5 4.6 4.5 4.5 Republic of South Africa 0.8 0.9 1.5 1.7 1.9 2.1 2.2 2.3 2.5 2.6 2.7 2.8 Other Europe 1.9 2.2 2.2 2.5 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 Former Soviet Union 2 2.5 1.8 2.0 2.4 2.6 2.8 2.9 2.9 2.9 2.9 2.8 2.7 Other foreign 3.4 2.0 2.2 2.5 2.6 2.6 2.7 2.7 2.7 2.6 2.6 2.6

United States 54.5 55.9 48.9 47.0 47.0 48.9 50.8 52.1 53.3 54.6 55.9 57.2
Percent
U.S. trade share 69.1 69.2 62.6 57.9 56.0 57.1 58.2 58.6 58.8 59.1 59.4 59.7 1/ Covers EU-25, excludes intra-EU trade. 2/ Covers FSU-12, includes intra-FSU trade. 3/ Includes Republic of South Africa. 4/ Includes unaccounted. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tons

Table 36. Sorghum trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers Japan 1.4 1.4 1.4 1.4 1.5 1.5 1.5 1.4 1.5 1.5 1.4 1.4 Mexico 3.0 2.9 2.5 2.3 2.3 2.2 2.3 2.3 2.3 2.3 2.4 2.5 North Africa & Middle East 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 South America 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Sub-Saharan Africa 1 0.5 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Other 2 0.3 0.2 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6

Total trade 5.4 4.8 4.8 4.7 4.7 4.7 4.7 4.7 4.7 4.8 4.9 5.0
Exporters Argentina 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 Australia 0.2 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 Other foreign 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4

United States 4.9 4.2 4.1 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 Percent U.S. trade share 91.2 88.0 84.0 81.3 81.3 81.1 80.9 80.7 80.4 79.6 78.1 76.3 1/ Includes the Republic of South Africa. 2/ Includes unaccounted. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tons102 USDA Long-term Pro j ections, Februar y 200 7 Table 37. Barley trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers Former Soviet Union 1 0.5 0.3 0.4 0.4 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.7 Japan 1.4 1.4 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 South Korea 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 Taiwan 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 China 2.2 2.2 2.3 2.3 2.4 2.5 2.6 2.6 2.7 2.7 2.8 2.8 European Union 2 0.2 0.4 0.4 0.4 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8 Latin America 3 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 Algeria 0.2 0.1 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Saudi Arabia 6.7 6.0 6.3 6.3 6.4 6.4 6.4 6.4 6.3 6.3 6.3 6.3 Morocco 0.5 0.4 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 Tunisia 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Republic of South Africa 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Iran 1.1 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Other N. Africa & M. East 2.4 2.5 2.7 2.7 2.8 2.9 3.0 3.0 3.1 3.1 3.2 3.3 Other foreign 4 1.6 0.1 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5

United States 0.1 0.3 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Total trade 18.4 15.9 17.5 17.8 18.2 18.6 19.0 19.3 19.6 19.9 20.2 20.6

Exporters European Union 2 3.1 3.0 2.9 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Australia 5.3 2.7 4.9 4.9 5.0 5.0 5.1 5.1 5.1 5.1 5.2 5.2 Canada 2.3 1.5 1.4 2.0 2.1 2.3 2.4 2.5 2.5 2.6 2.7 2.7 Russia 1.7 2.5 2.7 2.1 1.9 1.8 1.8 1.8 1.8 1.7 1.6 1.6 Ukraine 4.0 4.7 4.0 4.2 4.4 4.6 4.8 4.9 5.0 5.1 5.2 5.3 Other Former Soviet Union 5 0.1 0.3 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.8 Turkey 0.5 0.3 0.1 0.2 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.4 Other foreign 0.8 0.5 0.5 0.6 0.6 0.6 0.7 0.8 0.9 0.9 1.0 1.1

United States 0.6 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4

Percent

U.S. trade share 3.3 2.7 2.5 2.4 2.4 2.3 2.3 2.3 2.2 2.2 2.2 2.1 1/ Covers FSU-12, includes intra-FSU trade. 2/ Covers EU-25, excludes intra-EU trade. 3/ Includes Mexico. 4/ Includes unaccounted. 5/ Covers FSU-12 except Russia and Ukraine, includes intra-FSU trade. The projections were completed in November 2006. Exports, million metric tons Imports, million metric tonsUSDA Long-term Projections, February 2007 103 Table 38. Wheat trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers Algeria 5.5 4.8 4.9 4.9 5.1 5.2 5.3 5.4 5.6 5.7 5.8 6.0 Egypt 7.8 7.0 7.7 8.0 8.3 8.7 9.1 9.2 9.4 9.5 9.6 9.7 Morocco 2.4 1.9 2.4 2.5 2.7 2.7 2.8 2.9 3.0 3.0 3.1 3.2 Iran 0.4 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Iraq 4.8 3.5 4.0 4.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 Tunisia 1.2 1.2 1.4 1.5 1.5 1.6 1.6 1.6 1.7 1.7 1.7 1.7 Other N. Africa & Middle East 9.0 8.4 8.9 9.1 9.4 9.6 9.8 9.9 10.1 10.3 10.4 10.6
Sub-Saharan Africa 1 13.0 12.2 13.0 13.5 13.9 14.3 14.8 15.2 15.7 16.1 16.6 17.2 Mexico 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6 Central America & Caribbean 3.4 3.5 3.5 3.6 3.7 3.7 3.7 3.8 3.8 3.9 3.9 4.0 Brazil 6.5 7.3 6.8 7.2 7.4 7.6 7.8 8.0 8.2 8.4 8.6 8.9 Other South America 6.6 5.9 6.2 6.3 6.4 6.4 6.5 6.6 6.6 6.7 6.7 6.7 European Union 2 7.6 6.8 7.2 7.6 7.9 8.1 8.3 8.5 8.7 8.9 9.1 9.2 Other Europe 1.6 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5
Former Soviet Union 3 4.7 4.0 4.9 5.3 5.3 5.5 5.6 5.7 5.7 5.7 5.7 5.7 Japan 5.5 5.5 5.5 5.5 5.5 5.4 5.4 5.4 5.3 5.3 5.2 5.2 South Korea 3.9 3.6 4.1 4.2 4.4 4.5 4.7 4.8 4.9 5.0 5.1 5.2 Philippines 3.0 2.7 2.9 3.0 3.1 3.2 3.2 3.3 3.4 3.5 3.6 3.7 Indonesia 5.0 4.8 5.1 5.2 5.3 5.4 5.5 5.7 5.8 5.9 6.1 6.2 China 1.0 0.7 1.0 1.3 1.6 1.8 2.0 2.1 2.2 2.4 2.5 2.6 Bangladesh 2.1 2.1 2.2 2.2 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 Malaysia 1.2 1.4 1.4 1.5 1.5 1.5 1.5 1.5 1.6 1.6 1.6 1.6 Thailand 1.2 1.2 1.2 1.3 1.4 1.4 1.5 1.5 1.5 1.6 1.6 1.7 Vietnam 1.2 1.3 1.4 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.9 Pakistan 1.0 0.6 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 Other Asia & Oceania 4.9 10.5 6.0 5.9 5.9 6.0 6.0 6.1 6.2 6.3 6.5 6.6 Other foreign 5.4 -0.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8

United States 2.2 2.9 2.7 2.9 2.9 3.0 3.0 3.1 3.1 3.3 3.3 3.4

Total trade 115.5 109.1 113.5 117.5 120.7 123.7 126.8 129.4 132.0 134.6 137.1 140.1

Exporters European Union 2 15.0 16.0 16.0 16.0 16.0 16.0 16.2 16.3 16.4 16.5 16.6 16.6 Canada 16.1 20.5 18.0 17.6 17.7 17.6 17.5 17.2 17.2 17.2 17.1 17.1 Australia 16.0 10.5 14.5 16.5 17.2 17.9 18.6 19.3 20.0 20.7 21.4 22.1 Argentina 8.2 8.5 10.5 11.0 12.0 12.4 13.0 13.2 13.1 13.0 13.0 13.4 Russia 10.7 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5 Ukraine 6.5 3.5 4.7 5.7 6.5 7.3 7.7 8.3 8.7 9.2 9.6 9.9 Other Former Soviet Union 4 3.2 5.2 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6.0 Other Europe 2.0 1.6 1.6 2.1 2.3 2.4 2.5 2.8 3.0 3.3 3.6 3.9 India 0.8 0.5 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 China 1.4 2.5 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 Turkey 3.2 2.0 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.9 Other foreign 5.0 4.7 4.5 4.4 4.4 4.3 4.2 4.2 4.2 4.1 4.1 4.1

United States 27.5 25.2 25.9 25.9 25.9 26.5 27.2 27.9 28.6 29.3 29.9 30.6

Percent
U.S. trade share 23.8 23.1 22.8 22.0 21.4 21.5 21.5 21.6 21.7 21.7 21.8 21.9 1/ Includes Republic of South Africa. 2/ Covers EU-25, excludes intra-EU trade. 3/ Covers FSU-12, includes intra-FSU trade. 4/ Covers FSU-12 except Russia and Ukraine, includes intra-FSU trade. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tons104 USDA Long-term Pro j ections, Februar y 200 7 Table 39. Soybean trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers European Union 1 13.8 14.1 13.5 13.6 13.5 13.4 13.2 13.1 13.0 12.9 12.6 12.4 Japan 4.0 4.1 4.1 4.1 4.1 4.1 4.2 4.2 4.2 4.2 4.2 4.2 South Korea 1.2 1.3 1.3 1.2 1.2 1.2 1.2 1.2 1.1 1.1 1.1 1.1 Taiwan 2.4 2.4 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Mexico 3.7 3.8 3.9 4.0 4.1 4.2 4.3 4.5 4.6 4.7 4.8 4.9 Former Soviet Union 2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 Other Europe 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 China 28.3 32.0 35.9 38.4 40.9 43.8 46.5 48.7 50.8 52.9 55.1 57.2 Malaysia 0.5 0.6 0.6 0.6 0.7 0.7 0.7 0.8 0.8 0.8 0.9 0.9 Indonesia 1.3 1.4 1.4 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9 1.9 Other 8.7 10.3 10.9 11.4 12.0 12.6 13.1 13.7 14.3 14.9 15.4 16.0

Total imports 64.4 70.6 74.8 78.2 81.3 84.8 88.2 91.1 93.9 96.7 99.4 102.0

Exporters Argentina 7.3 7.0 6.5 6.5 6.5 6.4 6.4 6.3 6.3 6.2 6.2 6.1 Brazil 25.9 25.9 29.9 37.4 44.4 47.6 50.5 53.1 55.3 57.7 59.7 62.0 Other South America 3.3 4.1 4.3 4.5 4.8 5.0 5.3 5.5 5.8 6.1 6.4 6.7 China 0.3 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Other foreign 1.8 2.1 2.4 2.2 2.3 2.4 2.5 2.7 2.8 2.9 3.1 3.3

United States 25.8 31.2 31.3 27.2 23.0 23.0 23.1 23.1 23.4 23.4 23.7 23.7

Total exports 64.4 70.6 74.8 78.2 81.3 84.8 88.2 91.1 93.9 96.7 99.4 102.0
Percent U.S. trade share 40.0 44.2 41.9 34.8 28.3 27.1 26.2 25.4 24.9 24.2 23.8 23.2 1/ Covers EU-25, excludes intra-EU trade. 2/ Covers FSU-12, includes intra-FSU trade. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tonsUSDA Long-term Projections, February 2007 105 Table 40. Soybean meal trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers European Union 1 22.9 22.7 22.9 23.3 23.6 23.9 24.2 24.5 24.8 25.1 25.4 25.7 Former Soviet Union 2 0.7 0.7 0.7 0.8 0.9 1.0 1.0 1.1 1.2 1.2 1.3 1.4 Other Europe 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.9 0.9 0.9 0.9 Canada 1.3 1.4 1.4 1.4 1.5 1.5 1.6 1.6 1.7 1.8 1.8 1.9 Japan 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.7 1.7 1.7 1.7 Southeast Asia 8.0 8.5 8.8 9.2 9.5 9.9 10.2 10.5 10.9 11.3 11.6 12.0 Latin America 7.0 7.4 7.7 8.0 8.4 8.7 9.0 9.3 9.7 10.0 10.3 10.6 North Africa & Middle East 4.0 4.8 5.1 5.4 5.8 6.1 6.4 6.7 7.0 7.3 7.7 8.0 Other 5.1 5.2 5.4 5.6 6.0 6.2 6.4 6.6 6.8 6.9 7.0 7.2

Total imports 51.3 52.9 54.5 56.2 57.9 59.6 61.2 62.9 64.5 66.1 67.7 69.4

Exporters Argentina 24.3 26.3 27.6 28.2 29.3 30.4 31.2 32.0 32.8 33.5 34.1 34.7 Brazil 12.9 12.6 12.9 13.1 13.8 14.2 14.8 15.7 16.4 17.2 18.2 19.3 Other South America 1.6 1.7 1.8 1.8 1.8 1.9 1.9 2.0 2.0 2.0 2.1 2.1 China 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 India 3.7 3.0 2.8 2.8 2.7 2.7 2.6 2.6 2.5 2.5 2.5 2.4 European Union 1 0.7 0.8 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Other foreign 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

United States 7.2 7.7 8.2 9.0 9.2 9.3 9.5 9.5 9.5 9.6 9.6 9.7

Total exports 51.3 52.9 54.5 56.2 57.9 59.6 61.2 62.9 64.5 66.1 67.7 69.4
Percent U.S. trade share 14.1 14.6 15.0 16.1 15.8 15.5 15.5 15.1 14.8 14.5 14.2 14.0 1/ Covers EU-25, excludes intra-EU trade. 2/ Covers FSU-12, includes intra-FSU trade. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tons

Table 41. Soybean oil trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers China 1.5 1.7 1.6 1.7 1.7 1.8 1.8 1.9 2.1 2.2 2.3 2.4 India 1.7 1.9 1.8 1.7 1.7 1.8 1.8 1.9 1.9 2.0 2.0 2.1 Other Asia 0.9 1.0 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.2 1.2 1.3 Latin America 1.4 1.4 1.4 1.5 1.6 1.6 1.6 1.7 1.7 1.7 1.7 1.8 North Africa & Middle East 2.0 2.0 2.1 2.1 2.2 2.2 2.3 2.3 2.4 2.5 2.5 2.6 European Union 1 0.7 0.9 0.9 1.0 1.0 1.2 1.4 1.5 1.7 1.8 2.0 2.1 Former Soviet Union & Other Europe 2 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 Other 1.0 0.9 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.1 1.1 1.1

Total imports 9.3 9.9 9.9 10.0 10.3 10.8 11.2 11.7 12.2 12.6 13.0 13.5

Exporters Argentina 5.6 5.9 6.0 6.2 6.4 6.7 6.9 7.1 7.3 7.4 7.6 7.7 Brazil 2.1 2.3 2.2 2.2 2.3 2.5 2.7 3.0 3.3 3.5 3.8 4.1 European Union 1 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Other foreign 0.9 1.0 1.0 1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.1

United States 0.5 0.6 0.4 0.4 0.3 0.3 0.4 0.4 0.4 0.4 0.3 0.3

Total exports 9.3 9.9 9.9 10.0 10.3 10.8 11.2 11.7 12.2 12.6 13.0 13.5
Percent
U.S. trade share 5.6 5.7 4.5 4.0 3.1 2.9 3.1 3.0 2.9 2.8 2.6 2.4 1/ Covers EU-25, excludes intra-EU trade. 2/ Includes intra-FSU trade. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tons106 USDA Long-term Pro j ections, Februar y 200 7 Table 42. Rice trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers Canada 0.34 0.35 0.36 0.36 0.37 0.37 0.38 0.39 0.39 0.40 0.40 0.41 Mexico 0.60 0.60 0.64 0.67 0.68 0.71 0.73 0.75 0.77 0.79 0.81 0.83 Central America/Caribbean 1.60 1.76 1.77 1.80 1.84 1.85 1.88 1.92 1.95 1.99 2.01 2.03 Brazil 0.60 0.75 0.85 0.90 0.95 1.00 1.05 1.10 1.05 1.00 0.95 0.90 Other South America 0.31 0.38 0.36 0.37 0.38 0.39 0.40 0.41 0.42 0.43 0.44 0.45 European Union 1 0.93 0.93 1.11 1.12 1.15 1.19 1.23 1.26 1.28 1.31 1.34 1.37 Former Soviet Union 2 0.55 0.55 0.55 0.56 0.56 0.56 0.56 0.56 0.56 0.56 0.56 0.56 Other Europe 0.22 0.22 0.21 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.21 0.21 Bangladesh 0.70 0.60 0.70 0.75 0.81 0.89 0.98 1.08 1.19 1.31 1.44 1.57 China 0.70 0.80 0.88 0.92 1.02 1.08 1.12 1.17 1.25 1.33 1.41 1.49 Japan 0.70 0.65 0.68 0.68 0.68 0.68 0.68 0.68 0.68 0.68 0.68 0.68 South Korea 0.40 0.27 0.27 0.29 0.31 0.33 0.35 0.37 0.39 0.41 0.41 0.41 Indonesia 0.90 0.60 0.85 0.95 1.05 1.16 1.27 1.36 1.52 1.65 1.78 1.90 Malaysia 0.85 0.85 0.74 0.73 0.73 0.73 0.73 0.73 0.74 0.75 0.76 0.77 Philippines 1.90 1.75 1.70 1.65 1.62 1.65 1.65 1.65 1.68 1.70 1.74 1.81 Other Asia & Oceania 2.25 2.49 2.48 2.47 2.49 2.51 2.53 2.56 2.59 2.61 2.63 2.65 Iraq 1.20 1.20 1.06 1.10 1.14 1.18 1.21 1.25 1.28 1.32 1.35 1.38 Iran 1.20 0.90 0.98 0.97 1.00 1.02 1.08 1.12 1.18 1.25 1.31 1.37 Saudi Arabia 1.36 1.00 1.13 1.31 1.33 1.36 1.38 1.41 1.43 1.46 1.48 1.50 Other N. Africa & M. East 1.48 1.56 1.54 1.54 1.56 1.60 1.64 1.67 1.71 1.74 1.79 1.82 Sub-Saharan Africa 3 6.56 6.60 6.80 7.01 7.15 7.27 7.40 7.54 7.69 7.84 8.02 8.20 Republic of South Africa 0.85 0.80 0.86 0.86 0.87 0.88 0.88 0.89 0.90 0.91 0.92 0.92 Other foreign 4 1.15 1.95 1.96 1.96 1.95 1.95 1.96 1.96 1.96 1.96 1.96 1.96

United States 0.54 0.57 0.58 0.61 0.62 0.64 0.66 0.68 0.70 0.72 0.74 0.77

Total imports 27.86 28.10 29.08 29.77 30.47 31.19 31.95 32.72 33.51 34.31 35.13 35.95

Exporters Australia 0.33 0.15 0.15 0.22 0.28 0.30 0.32 0.35 0.37 0.40 0.41 0.42 Argentina 0.35 0.45 0.44 0.46 0.46 0.48 0.50 0.52 0.55 0.57 0.59 0.61 Other South America 1.30 1.18 1.11 1.13 1.14 1.15 1.16 1.19 1.23 1.26 1.30 1.35 European Union 1 0.18 0.15 0.18 0.20 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.23 China 1.10 1.00 0.98 1.00 0.96 0.97 1.00 1.02 1.03 1.04 1.06 1.08 India 3.80 4.30 4.58 4.61 4.73 4.90 5.08 5.27 5.40 5.60 5.80 6.00 Pakistan 2.90 2.90 2.86 2.95 3.03 3.04 3.04 3.04 3.04 3.04 3.05 3.06 Thailand 7.30 8.25 8.92 9.09 9.42 9.75 10.10 10.40 10.80 11.20 11.55 11.95 Vietnam 5.00 4.70 4.61 4.84 4.97 5.14 5.27 5.39 5.49 5.58 5.67 5.75 Egypt 1.00 0.90 0.83 0.78 0.73 0.69 0.66 0.64 0.61 0.57 0.54 0.51 Other foreign 0.96 1.08 1.05 1.08 1.12 1.14 1.16 1.18 1.20 1.22 1.26 1.29

United States 3.65 3.05 3.37 3.40 3.40 3.40 3.43 3.50 3.56 3.61 3.65 3.72

Total exports 27.86 28.11 29.08 29.77 30.47 31.19 31.95 32.72 33.51 34.31 35.13 35.95
Percent
U.S. trade share 13.1 10.9 11.6 11.4 11.2 10.9 10.7 10.7 10.6 10.5 10.4 10.3 1/ Covers EU-25, excludes intra-EU trade. 2/ Covers FSU-12, includes intra-FSU trade. 3/ Excludes Republic of South Africa 4/ Includes unaccounted. The projections were completed in November 2006. Imports, million metric tons

Exports, million metric tonsUSDA Long-term Projections, February 2007 107 Table 43. All cotton trade long-term projections 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Importers European Union 1 2.3 2.1 1.8 1.7 1.6 1.6 1.6 1.5 1.5 1.4 1.4 1.3 Former Soviet Union 2 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Indonesia 2.2 2.2 2.1 2.1 2.1 2.1 2.2 2.3 2.3 2.4 2.3 2.4 Thailand 1.9 2.0 2.0 2.0 2.0 2.0 2.0 2.1 2.1 2.2 2.2 2.3 India 0.4 0.6 0.6 0.6 0.8 0.8 0.9 1.0 1.1 1.1 1.1 1.1 Brazil 0.3 0.5 0.5 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Other Europe 0.2 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Other Asia & Oceania 3.8 3.9 3.9 3.9 4.1 4.2 4.4 4.6 4.8 5.0 5.1 5.3 Pakistan 1.8 2.3 2.7 2.4 2.4 2.4 2.5 2.8 3.1 3.4 3.7 4.1 Japan 0.7 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 South Korea 1.0 1.0 1.0 1.0 0.9 0.9 0.9 0.9 0.9 0.9 0.8 0.8 China 19.3 17.5 21.3 21.4 22.1 22.7 23.1 23.6 23.8 23.9 24.2 24.2 Taiwan 1.1 1.2 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 Turkey 3.4 2.6 2.8 2.7 2.7 2.7 2.8 2.9 2.9 3.0 3.0 3.1 Mexico 1.7 1.4 1.3 1.4 1.4 1.3 1.3 1.3 1.3 1.2 1.2 1.1 Other 2.5 2.5 2.5 2.4 2.4 2.4 2.5 2.5 2.5 2.6 2.6 2.6

Total imports 44.2 42.0 46.0 45.7 46.4 46.9 48.0 49.3 50.1 50.9 51.4 51.9

Exporters Former Soviet Union 2 7.0 6.8 7.2 6.9 6.8 6.8 6.9 7.0 7.0 7.2 7.1 7.2 Australia 2.9 2.4 2.3 2.5 2.8 3.0 3.2 3.4 3.5 3.6 3.6 3.7 Argentina 0.1 0.2 0.1 0.1 0.1 0.2 0.2 0.2 0.3 0.3 0.3 0.4 Pakistan 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 India 4.0 4.2 5.0 4.6 4.5 4.6 4.6 4.4 4.1 3.8 3.4 3.0 Egypt 0.5 0.6 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6 Brazil 2.0 1.4 2.3 3.0 3.2 3.3 3.4 3.7 3.8 4.1 4.3 4.5 Other Latin America 0.6 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 Sub-Saharan Africa 3 6.5 6.3 6.8 6.8 6.9 6.9 7.1 7.4 7.8 8.0 8.5 8.7 Other foreign 3.5 2.8 3.1 2.9 3.0 3.0 3.0 3.1 3.2 3.3 3.3 3.3

United States 18.0 16.2 17.6 17.2 17.4 17.5 17.9 18.3 18.6 18.8 19.0 19.2

Total exports 45.4 41.5 45.5 45.2 45.9 46.4 47.5 48.8 49.6 50.4 50.9 51.4
Percent U.S. trade share 39.8 39.0 38.6 38.1 37.8 37.7 37.7 37.5 37.5 37.4 37.4 37.4 1/ Covers EU-25, excludes intra-EU trade. 2/ Covers FSU-12, includes intra-FSU trade. 3/ Includes Republic of South Africa. The projections were completed in November 2006. Imports, million bales

Exports, million bales108 USDA Long-term Pro j ections, Februar y 200 7 Table 44. Beef trade long-term projections 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Importers Japan 700 693 765 785 801 813 825 836 846 856 866 876 South Korea 243 193 230 263 280 293 309 329 348 363 384 400 Taiwan 92 98 100 101 102 106 108 110 113 116 119 121 Philippines 140 142 148 168 180 189 201 208 215 222 229 237 European Union 1 599 540 560 650 650 650 651 651 651 650 650 650 Russia 993 840 905 989 1,005 1,014 1,023 1,039 1,046 1,059 1,070 1,074 Other Europe 137 119 115 178 187 193 197 204 209 214 218 221 Egypt 214 225 240 273 284 291 303 308 314 320 326 332 Mexico 325 365 375 450 506 546 588 623 666 699 734 767 Canada 133 150 160 179 190 195 200 210 216 224 229 233

United States 1,632 1,439 1,524 1,527 1,537 1,548 1,559 1,570 1,581 1,593 1,605 1,617

Major importers 5,208 4,804 5,122 5,563 5,721 5,837 5,963 6,087 6,204 6,316 6,429 6,527

Exporters Australia 1,413 1,420 1,495 1,477 1,459 1,410 1,385 1,376 1,379 1,386 1,410 1,414 New Zealand 589 540 570 568 561 557 556 553 552 550 547 545 Other Asia 719 840 885 899 927 945 974 1,006 1,038 1,059 1,077 1,099 European Union 1 255 200 200 215 252 273 285 297 309 327 346 365 Argentina 762 500 600 554 543 527 523 516 509 498 491 474 Brazil 1,867 1,945 1,985 1,992 2,049 2,127 2,190 2,243 2,283 2,311 2,338 2,355 Canada 551 455 440 433 438 462 484 504 524 541 556 568

United States 317 523 680 706 741 776 811 846 881 925 963 1,024

Major exporters 6,473 6,423 6,855 6,844 6,968 7,076 7,209 7,342 7,475 7,596 7,729 7,844 1/ Covers EU-25, excludes intra-EU trade. The projections were completed in November 2006. Imports, thousand metric tons, carcass weight

Exports, thousand metric tons, carcass weightUSDA Long-term Projections, February 2007 109 Table 46. Poultry trade long-term projections 1/ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Importers Russia 1,332 1,336 1,251 1,212 1,252 1,259 1,268 1,278 1,278 1,256 1,235 1,202 European Union 2 625 710 760 610 614 617 620 623 626 629 632 635 Other Europe 183 157 147 150 147 150 155 160 164 169 175 181 Canada 107 110 120 121 123 125 127 129 131 132 134 136 Mexico 559 590 624 645 665 685 705 725 745 765 790 810 Central America/Caribbean 497 510 514 528 537 541 542 547 552 552 559 565 Japan 748 740 725 724 725 731 737 747 748 755 759 760 Hong Kong 222 234 237 248 252 255 259 263 266 270 274 277 China 219 370 430 461 486 506 524 540 556 575 590 602 South Korea 59 70 75 86 91 98 105 112 120 129 137 145 Saudi Arabia 484 434 470 492 510 529 545 563 580 598 615 632 Other N. Africa & M. East 336 232 349 347 374 402 429 458 489 519 555 592

Major importers 5,371 5,493 5,702 5,625 5,774 5,896 6,015 6,144 6,255 6,349 6,454 6,537

Exporters European Union 2 943 770 835 911 941 958 961 975 978 974 972 965 Brazil 2,900 2,653 2,710 2,716 2,796 2,900 3,005 3,110 3,215 3,320 3,425 3,530 China 331 350 365 381 394 388 384 382 381 376 380 383 Thailand 240 280 280 292 314 325 332 342 345 342 343 343

United States 2,678 2,762 2,833 2,807 2,840 2,881 2,930 2,970 3,015 3,057 3,101 3,146

Major exporters 7,092 6,815 7,023 7,108 7,284 7,451 7,612 7,780 7,935 8,069 8,221 8,367 1/ Broilers and turkeys only. 2/ Covers EU-25, excludes intra-EU trade. The projections were completed in November 2006. Imports, thousand metric tons, ready to cook

Exports, thousand metric tons, ready to cook Table 45. Pork trade long-term projections 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Importers Japan 1,339 1,250 1,228 1,273 1,282 1,295 1,309 1,323 1,337 1,352 1,368 1,385 China 48 36 37 38 39 42 44 46 48 51 53 54 Hong Kong 305 310 317 331 340 350 359 370 381 393 406 419 South Korea 328 254 220 257 282 301 314 321 328 337 345 352 Russia 765 800 825 860 893 925 959 981 1,006 1,031 1,055 1,076 Mexico 420 450 460 488 505 532 554 572 592 615 635 657 Canada 140 140 145 149 152 154 157 160 163 166 169 172

United States 465 463 467 473 480 489 498 508 518 529 539 550

Major importers 3,810 3,703 3,699 3,868 3,973 4,088 4,194 4,281 4,372 4,475 4,569 4,665

Exporters Brazil 761 540 570 584 593 615 654 687 709 751 787 816 Canada 1,084 1,100 1,120 1,135 1,129 1,118 1,108 1,090 1,081 1,079 1,082 1,084 Mexico 59 65 70 72 74 77 79 82 84 87 89 92 European Union 1 1,357 1,400 1,400 1,458 1,495 1,515 1,534 1,561 1,583 1,593 1,605 1,617 China 502 500 510 529 545 558 565 574 582 586 589 594

United States 1,209 1,346 1,402 1,444 1,465 1,487 1,510 1,532 1,555 1,579 1,602 1,626

Major exporters 4,972 4,951 5,072 5,221 5,301 5,370 5,450 5,525 5,595 5,673 5,754 5,829 1/ Covers EU-25, excludes intra-EU trade. The projections were completed in November 2006. Imports, thousand metric tons, carcass weight

Exports, thousand metric tons, carcass weight110 USDA Long-term Pro j ections, Februar y 200 7 List of Tables Page Table 1. U.S. macroeconomic assumptions........................................................................................ ... 17 Table 2. Global real GDP growth assumptions .................................................................................... . 18 Table 3. Population growth assumptions......................................................................................... ...... 19 Table 4. Summary policy variables for major field crops, 2005-2016.................................................. 36 Table 5. Conservation Reserve Program acreage assumptions ............................................................. 36 Table 6. Planted and harvested acreage for major field crops, long-term projections .......................... 37 Table 7. Selected supply, use, and price variab les for major field crops, long-term projections .......... 38 Table 8. U.S. corn long-term projections ....................................................................................... ....... 39 Table 9. U.S. sorghum long-term projections .................................................................................... ... 40 Table 10. U.S. barley long-term projections .................................................................................... ....... 41 Table 11. U.S. oats long-term projections...................................................................................... ......... 42 Table 12. U.S. wheat long-term projections..................................................................................... ....... 43 Table 13. U.S. soybean and prod ucts long-term projections................................................................... 44 Table 14. U.S. rice long-term projections, rough basis ......................................................................... .. 45 Table 15. U.S. upland cotton long-term projections............................................................................. ... 46 Table 16. U.S. sugar long-term projections..................................................................................... ........ 47 Table 17. Flue-cured tob acco long-term projections............................................................................. .. 48 Table 18. Burley tobacco long-term projections ................................................................................. .... 48 Table 19. Horticultural crops long-term projections : Production, values, and prices, calendar years .... 49 Table 20. Horticultural crops long-term proj ections: Exports and imports, fiscal years......................... 50 Table 21. Per capita meat c onsumption, retail weight........................................................................... .. 57 Table 22. Consumer expenditures for meats ...................................................................................... ..... 57 Table 23. Beef long-term projections........................................................................................... ........... 58 Table 24. Pork long-term projections........................................................................................... ........... 59 Table 25. Young chicken long-term projections .................................................................................. ... 59 Table 26. Turkey long-term projections......................................................................................... ......... 60 Table 27. Egg long-term projections ............................................................................................ ........... 60 Table 28. Dairy long-term projections .......................................................................................... .......... 61 Table 29. Farm receipts, expenses, and incomes in nominal dollars....................................................... 68 Table 30. Farm receipts, expenses, and incomes in 1996 dollars............................................................ 68 Table 31. Consumer food price indexes and food expenditures, long-term projections ......................... 69 Table 32. Changes in consumer f ood prices, long-term projections ....................................................... 69 Table 33. Summary of U.S. agricultural tr ade long-term projections, fiscal years ................................. 70 Table 34. Coarse grains trade long-term projections............................................................................ . 100 Table 35. Corn trade long-term projections..................................................................................... ...... 101 Table 36. Sorghum trade long-term projections.................................................................................. .. 101 Table 37. Barley trade long-term projections................................................................................... ..... 102 Table 38. Wheat trade long-term projections .................................................................................... .... 103 Table 39. Soybean trade long-term projections.................................................................................. ... 104 Table 40. Soybean meal trade long-term projections............................................................................ 1 05 Table 41. Soybean oil trade long-term projections.............................................................................. .. 105 Table 42. Rice trade long-term projections ..................................................................................... ...... 106 Table 43. All cotton trade long-term projections ............................................................................... ... 107 Table 44. Beef trade long-term projections..................................................................................... ...... 108 Table 45. Pork trade long-term projections..................................................................................... ...... 109 Table 46. Poultry trade long-term projections.................................................................................. ..... 109
Feature Table Corn and soybean projections under a lternative biofuel policy assumptions ............................................. 25