While there are many similarities in the numbers, there are also a few key differences worth exploring. The short-range differences appear to be associated with export markets. On the supply side, there appear to be substantial differences regarding the responsiveness of U.S. acreage as well as constraints on U.S. acres. The resulting prices in the USDA baseline increase to levels that are substantially above the per-unit variable costs, suggesting incentives for additional acres both in the U.S. and globally. When comparing the projections for the U.S. livestock sector, the long-term price differences also become evident.
Pork is the one exception.
Higher livestock prices are to be expected given the higher feed costs between the two projections. However, it appears that for beef and dairy, output prices are strong enough to support returns and offer incentives to increase production. As is the case in the crops sector, more pessimism regarding supply potential is evident in the USDA projections. One final point on the livestock projections regards the price outlook across the various enterprises. By the end of the baseline, beef, broiler, and milk prices recover to levels higher than what was observed in the 1980's ad 1990's.