Texas Agriculture March 3, 2017 : Page 25

USDA releases 10-year projections By Jessica Domel Multimedia Editor Demand for American agricultural products both at home and abroad will remain strong over the next de-cade or so, according to a new report from the U.S. Department of Agricul-ture (USDA). “USDA Agricultural Projections to 2026” was released Feb. 16. The report is not a forecast. Instead, it is a con-ditional, long-run scenario based on specific assumptions. The value of the U.S. dollar is ex-pected to appreciate through 2018 and then slowly depreciate. Despite the depreciation, the dollar is expect-ed to be stronger than any year since 2006. A stronger dollar will increase the relative price of U.S. exports, which could constrain export growth, accord-ing to the report. Despite that, the U.S. economy will be a growth leader of the developed world over the next decade, averaging expected to support longer-term gains in food demand, global agricultural trade and U.S. agricultural exports. Crop prices over the next 10 years are likely to remain above pre-2007 levels. Decreased feed costs and stronger livestock prices over the past several years have improved livestock sector returns, so expansions are likely to oc-cur. Nominal beef cattle prices will be pressured through 2026. Hog and broiler prices are expect-ed to trend upward after an initial drop. Egg and milk prices are projected to increase through most of the de-cade. Export values and farm cash re-ceipts will grow over the rest of the projection period. Although farm production expens-es increase after 2017, increased cash receipts mean net farm income gen-erally increases over the rest of the projection period. Global expansion of the biofuel market is expected to continue, but at a slower pace than the last five years. As a result, the demand for biofuel feedstock will also grow, but slowly. U.S. ethanol production is project-ed to increase over the first couple of years and will likely then decline for the rest of the decade. The share of U.S. ethanol produc-tion is likely to fall over time with the global market. Even with the decline, demand for corn to produce ethanol will likely continue to have a strong presence in the sector. The data presented in the report assumes normal weather, no domestic or external shocks that would affect agricultural markets and no changes to the Agricultural Act of 2014. THE BEST JUST GOT INTRODUCING EVEN BETTER Among other things, the report pre-dicts “the United States will remain among the most competitive export-ers of agricultural products” over the next 10 years. A slowdown in global population growth is predicted. During that time, most growth will occur in developing countries, which have younger popu-lations and are becoming more urban. Urbanization and age both are ex-pected to lead to diversification and expansion of their food competition. As this occurs, demand for meat, dairy and processed foods grows. The increasing demand for those foods will account for most of the gains in U.S. agricultural exports. As demand grows, so will trade competition, according to the report. The United States is projected to remain competitive, but is forecast to lose some of its global market share due to increased competition. more than 2.1 percent annual growth. As this occurs, the strong growth in developing economies will cause the U.S. share of the Global Gross Domes-tic Product (GDP) to fall slowly, but steadily, over the next 10 years. Developed countries, as a group, are expected to experience an average of 1.8 percent annual growth over the next 10 years. With the exception of 2015, that growth will be the highest it’s been since 2010. Developed countries, like the U.S., are assumed to have relatively weak long-run growth, especially in the Eu-ropean Union and Japan. Japan’s economy is expected to slow due to, in part, a shrinking work-ing age population. Growth in the European Union is slated to be constrained by structural rigidities, inflexible labor laws and an expensive social security system. Meanwhile, steady global growth is The NEW M2-Series M ARCH 3 , 2017 Bobcat ® , the Bobcat logo and the colors of the Bobcat machine are registered trademarks of Bobcat Company in the United States and various other countries. 16-B340 Contact your local dealer for a demo! ALAMO Bobcat of the Rio Grande Valley 956-782-5580 www.bobcatcce.com AUSTIN Bobcat of Austin 512-251-3415 www.bobcatcce.com CORPUS CHRISTI Bobcat of Corpus Christi 361-887-8499 www.bobcatcce.com KERRVILLE Ranchers ATV and Tractor 830-315-2330 www.bobcatcce.com SAN ANTONIO Bobcat of San Antonio 210-337-6136 www.bobcatcce.com 25

USDA Releases 10-Year Projections

Jessica Domel

Demand for American agricultural products both at home and abroad will remain strong over the next decade or so, according to a new report from the U.S. Department of Agriculture (USDA).

“USDA Agricultural Projections to 2026” was released Feb. 16. The report is not a forecast. Instead, it is a conditional, long-run scenario based on specific assumptions.

Among other things, the report predicts “the United States will remain among the most competitive exporters of agricultural products” over the next 10 years.

A slowdown in global population growth is predicted. During that time, most growth will occur in developing countries, which have younger populations and are becoming more urban.

Urbanization and age both are expected to lead to diversification and expansion of their food competition.

As this occurs, demand for meat, dairy and processed foods grows. The increasing demand for those foods will account for most of the gains in U.S. agricultural exports.

As demand grows, so will trade competition, according to the report.

The United States is projected to remain competitive, but is forecast to lose some of its global market share due to increased competition.

The value of the U.S. dollar is expected to appreciate through 2018 and then slowly depreciate. Despite the depreciation, the dollar is expected to be stronger than any year since 2006.

A stronger dollar will increase the relative price of U.S. exports, which could constrain export growth, according to the report.

Despite that, the U.S. economy will be a growth leader of the developed world over the next decade, averaging more than 2.1 percent annual growth.

As this occurs, the strong growth in developing economies will cause the U.S. share of the Global Gross Domestic Product (GDP) to fall slowly, but steadily, over the next 10 years.

Developed countries, as a group, are expected to experience an average of 1.8 percent annual growth over the next 10 years. With the exception of 2015, that growth will be the highest it’s been since 2010.

Developed countries, like the U.S., are assumed to have relatively weak long-run growth, especially in the European Union and Japan.

Japan’s economy is expected to slow due to, in part, a shrinking working age population.

Growth in the European Union is slated to be constrained by structural rigidities, inflexible labor laws and an expensive social security system.

Meanwhile, steady global growth is expected to support longer-term gains in food demand, global agricultural trade and U.S. agricultural exports.

Crop prices over the next 10 years are likely to remain above pre-2007 levels.

Decreased feed costs and stronger livestock prices over the past several years have improved livestock sector returns, so expansions are likely to occur.

Nominal beef cattle prices will be pressured through 2026.

Hog and broiler prices are expected to trend upward after an initial drop.

Egg and milk prices are projected to increase through most of the decade.

Export values and farm cash receipts will grow over the rest of the projection period.

Although farm production expenses increase after 2017, increased cash receipts mean net farm income generally increases over the rest of the projection period.

Global expansion of the biofuel market is expected to continue, but at a slower pace than the last five years.

As a result, the demand for biofuel feedstock will also grow, but slowly.

U.S. ethanol production is projected to increase over the first couple of years and will likely then decline for the rest of the decade.

The share of U.S. ethanol production is likely to fall over time with the global market.

Even with the decline, demand for corn to produce ethanol will likely continue to have a strong presence in the sector.

The data presented in the report assumes normal weather, no domestic or external shocks that would affect agricultural markets and no changes to the Agricultural Act of 2014.

Read the full article at http://texasagriculture.texasfarmbureau.org/article/USDA+Releases+10-Year+Projections/2723140/388436/article.html.

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