10-Year Economic Projections for Food & Ag Released

This week - USDA released its 10 year economic projections for the food and agriculture sector. The report looks ahead through 2019 and covers agricultural commodities and trade - as well as food prices and farm income.  USDA Analyst David Stallings says net farm income is expected to rise from 2011 to 2019.  The value of US trade, and cash receipts to farmers go up. And while we’ll see some increase in production expenses go up, it won’t be enough to offset gains in cash receipts, so we should see a pretty steady increase in farm incomes over the next 10 years.

Growing to a projected 70-billion dollars in 2019 - well below the 2008 record of 87-billion.

Stallings says the projections reflect continuing adjustments to the recession of 2008-09 and the subsequent economic recovery.  The second recovery that’s coming is the livestock sector adjusting to higher feed costs that we’ve seen in ’07 and ’08.  Another factor is the increase in demand of biofuels.  We expect to see an expanded use in biofuels both here and abroad, a resumption of steady, global economic growth.

As for food prices - USDA has retail food prices increasing more than general inflation through 2012. But over the last half of the projection period - USDA shows a return to prices that rise less than the general inflation rate.

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