USDA looks to the end of the decade

A new report released by the United States Department of Agriculture (USDA), entitled 'USDA Agricultural Projections to 2019', has shed light on what the country's agricultural sector can expect by the end of the decade.

The study's projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices, based on specific assumptions about macroeconomic conditions, policy, weather, and international developments, with no domestic or external shocks to global agricultural markets.

'Prospects for the agricultural sector in the near term reflect continuing US and global
adjustments to the recession of 2008-09, and the subsequent economic recovery,' the USDA report read. 'A resumption of steady global economic growth will support increases in consumption, trade, and prices in the longer run.

'Agricultural trade and cash receipts to farmers grow through the projection period. Increases in production expenses offset some of the gains in cash receipts, resulting in net farm income in the US rising moderately from 2011 to 2019,' the USDA said. 'US retail food prices increase more than general inflation through 2012, but then return to a longer term relationship of rising less than the general inflation rate over the last-half of the projection period.'

According to the report, the growth of imports is projected to increase at a quicker pace than either exports or domestic production, with import values set to grow annually by 3.7 per cent from 2010 to 2019 (export growth forecast at 2.8 per cent for the same period).

The share of imports in US consumption of horticultural crops and products is expected to climb from 47 per cent to 52 per cent by 2019, the USDA said, with exports set to increase their share of US production value from 35 per cent to 39 per cent.

Farm sales of crops are projected to grow by 2.3 per cent annually over the next decade, up to US$68.6bn from US$56bn this year, with vegetables and melons ranking first in farm sales value, accounting for a 38 per cent of the total.

The USDA added that the US trade deficit in horticultural crops will increase from US$13bn in 2010 to US$20bn in 2019.