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USDA Agricultural Baseline Projections

USDA Agricultural Projections for 2011-20, released in February 2011, 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:

* U.S. and world economic growth move back toward longrun steady increases in the aftermath of the global financial crisis and economic recession.
* Although global population gains 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:

* Recent price increases for many farm commodities underlie record projected levels of U.S. agricultural exports and U.S. net farm income in 2011.
* Prices for major crops decrease in the early years of the projections as global production responds to current high prices.
* 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.
* After near-term reductions from projected 2011 records, the value of U.S. agricultural exports and net farm income each rise through the rest of the decade.

USDA Economic Research Service
Contact Person
Paul Westcott
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USDA Economic Research Service