USDA Agricultural Projections to 2021, released in February 2012, provide longrun projections for the farm sector for the next 10 years. These annual projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.

Important assumptions for the projections include:

• Global economic growth reflects a movement back to long-run steady gains.
• Increases in population in the world continue to slow. Growth in most developing countries remains above that in the rest of the world.
• Population gains in developing countries, along with higher incomes, increased urbanization, and expansion of the middle class, are particularly important for growth in global food demand.
• Continued expansion of biofuels further adds to world demand for agricultural products.

Key results in the projections include:

• Prices for major crops decrease in the early years of the projections as global production responds to recent high prices.
• Total U.S. red meat and poultry production is projected to fall in 2012 and 2013 in response to reduced producer returns over much of the past several years. Meat production then increases in response to improved returns.
• World economic growth and demand for biofuels combine to support longer run increases in consumption, trade, and prices for agricultural products.
• Thus, following the near-term declines, prices for corn, wheat, oilseeds, and many other crops remain historically high.
• Following near-term reductions from record levels reached in 2011, the values of U.S. agricultural exports and net farm income each rise through the rest of the decade.
• Retail food price increases average less than the overall rate of inflation in 2013-21, largely reflecting production increases in the livestock sector which limit meat price increases.

Last updated: Wednesday, June 27, 2012

For more information contact: Paul Westcott and Ronald Trostle