World agricultural demand was weakened by the global financial crisis of the late 1990's. Net farm income over the past several years was maintained near the average of the 1990's only through large marketing loan benefits and additional funds provided to the sector through emergency and disaster assistance legislation. Although there remain some lingering effects of the global economic crisis, the general recovery in crisis countries strengthens global demand and trade early in the baseline, and U.S. agricultural exports rise. The buildup of global supplies keeps agricultural prices under pressure in the next several years, with government marketing loan benefits continuing to have an important role in the U.S. farm sector. U.S. farm income initially declines, largely reflecting a reduction in direct government payments to the sector from the high levels of the past several years.
Longer term projections Global demand strengthens.
Longer run developments in the agricultural sector reflect continuing global macroeconomic improvement. Strengthening world economic growth, particularly in developing countries, provides a foundation for further gains in trade and U.S. agricultural exports. Trade competition remains a concern. Expanding production potential in a number of foreign countries results in continued strong export competition throughout the baseline. Nonetheless, growth in trade leads to rising market prices, increases in farm income, and improvement in the financial condition of the U.S. agricultural sector.