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Prospects for World Agriculture Baseline Projections to 2014

Prospects for World Agriculture Baseline Projections to 2014. Ronald Trostle Economic Research Service U.S. Department of Agriculture Foro de Perspectiva Agroindustrial, 2005 27 y 28 de Julio, 2005. Buenos Aires, Argentina. Presentation Outline. Summary of projections Main assumptions

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Prospects for World Agriculture Baseline Projections to 2014

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  1. Prospects for World AgricultureBaseline Projections to 2014 Ronald Trostle Economic Research Service U.S. Department of Agriculture Foro de Perspectiva Agroindustrial, 2005 27 y 28 de Julio, 2005. Buenos Aires, Argentina

  2. Presentation Outline • Summary of projections • Main assumptions • Developments influencing world agriculture • Projections for farm commodities • Uncertainties • Conclusion Prospects for World Agriculture: USDA/ERS

  3. USDA Baseline Projections • 10-year projections for major farm commodities - Supply, demand, trade, and prices. • Projections based on: - Economic models >Crop-area allocation model - for the USA > Models for individual commodity markets in the USA > Linked Country Model (“Linker”) ( Links 23 commodity markets in 39 countries & regions ) - Analysis and judgments by commodity analysts, country analysts and policy analysts. • Assumptions: - Basline projections based on many assumption - The baseline is not a forecast; but a projection of what might occur under a specific set of assumptions • Projections made November, 2004. Prospects for World Agriculture: USDA/ERS

  4. Total World Grain & Oilseeds1 Area, Yield, Production, & Percap Consumption; and Population Exponential trend growth rates: 1975-95 95-04 06-14 Prod 1.6 0.7 .09 Yields 1.8 1.3 0.8 Area -0.26 -0.59 0.11 Percap Use 0.08 -0.04 -0.18 Populatio 1.68 1.23 1.05 1 Total oilseeds = soybeans + rapeseed + sunflowers Prospects for World Agriculture: USDA/ERS

  5. Global Meat1 Production & Percap Consumption; and Population Index: 1975 = 100 Production Population Per capita Consumption 1Meat = Beef + Pork + Poultry Prospects for World Agriculture: USDA/ERS

  6. Main Assumptions Prospects for World Agriculture: USDA/ERS

  7. Strong Economic Growth GDP growth rates, by decade averages Percent Source: USDA Agricultural Baseline Projections to 2014, February 2005. Economic Research Service, USDA. Prospects for World Agriculture: USDA/ERS

  8. Population Growth Rates Decline (Percent by Decade) Percent Middle East Africa Latin America Asia Developing World Developed Prospects for World Agriculture: USDA/ERS

  9. Inflation Rates Generally Decline Percent Prospects for World Agriculture: USDA/ERS

  10. U.S. Dollar Projected to Strengthen1 Index values: 2000=100 1/ Real U.S. agricultural trade-weighted dollar exchange rate, using U.S. agricultural export weights. Prospects for World Agriculture: USDA/ERS

  11. Crude Oil Prices $ per barrel Refiners' acquisition cost of crude, imports Refiners' acquisition cost, adjusted for inflation Prospects for World Agriculture: USDA/ERS

  12. Policy Assumptions • Domestic agricultural and trade policies in most countries either do not change, or they continue to evolve along their current path. • All countries fully comply with all existing bilateral and multilateral agreements. Prospects for World Agriculture: USDA/ERS

  13. Other Global Influences • Technical developments enhance productivity: - Biotechnology increased farm productivity - Developments in transportation, processing, energy use - Increased availability of data and information • Globalization: Markets more integrated from farm to table. • Environmental Policy: Will influence farm production. • Renewable energy: Will reallocate production resources. • Food Safety: Will affect production, processing & marketing. • New producers exporting to niche markets: Will mean increased competition. • Aging World Population: Will change eating habits. Prospects for World Agriculture: USDA/ERS

  14. Changes in Food Consumption • Greater consumption of: • - Fruits & Vegetables • - Vegetable Oils • - Processed Cereal Products • - Meats & Dairy Products • Less consumption of: • - Staple grains - rice in Asia, corn in Mexico & Africa • - Low-quality grain varieties (switching to higher quality) (high-quality varieties may have lower yields) • - Roots & tubers • Feed demand increases: •  import demand for feed grains& protein meals Prospects for World Agriculture: USDA/ERS

  15. Oilseeds, Grains and Cotton Prospects for World Agriculture: USDA/ERS

  16. Global trade: Wheat, Coarse Grains, and Soybeans & Soybean products Million metric tons Soybeans and soybean products 1/ Wheat Coarse grains 1/ Soybeans and soybean meal in soybean-equivalent units. Prospects for World Agriculture: USDA/ERS

  17. S. American Exports: Grain & Soybeans Million metric tons Oilseeds Coarse grains Wheat Rice Prospects for World Agriculture: USDA/ERS

  18. Global exports: Soybeans, soybean meal, and soybean oil Soybeans and soybean meal, million metric tons Soybean oil, million metric tons Soybeans Soybean oil Soybean meal Prospects for World Agriculture: USDA/ERS

  19. Global Soybean Imports Million metric tons 1/ European Union-15 prior to 1999, EU-25 thereafter. Excludes intra-EU trade. Prospects for World Agriculture: USDA/ERS

  20. Global soybean meal imports Million metric tons 1/ Former Soviet Union and Other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 2/ European Union-15 prior to 1999, EU-25 thereafter. Excludes intra-EU trade. Prospects for World Agriculture: USDA/ERS

  21. Global soybean oil imports Million metric tons 1/ Asia less India and China. 2/ Includes Mexico. Prospects for World Agriculture: USDA/ERS

  22. Global Exports of Soybeans & Products1 Million metric tons Other Brazil Argentina United States 1Soybeans + bean equivalent of soymeal. Prospects for World Agriculture: USDA/ERS

  23. Global Corn Imports Million metric tons 1/ Includes Oceania. 2/ Excludes Mexico which is part of NAFTA. Prospects for World Agriculture: USDA/ERS

  24. China: Corn Imports and Exports Million metric tons Exports Imports Prospects for World Agriculture: USDA/ERS

  25. Global Corn Exports Million metric tons 1/ Republic of South Africa, Brazil, EU, former Soviet Union, and others. Prospects for World Agriculture: USDA/ERS

  26. Global Wheat Imports Million metric tons 1/ Predominantly South and Southeast Asia. 2/ Former Soviet Union and Other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 3/ European Union-15 prior to 1999, EU-25 thereafter. Excludes intra-EU trade. Prospects for World Agriculture: USDA/ERS

  27. Global Wheat Exports Million metric tons 1/ Former Soviet Union and Other Europe; prior to 1999, includes Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. 2/ European Union-15 prior to 1999, EU-25 thereafter. Excludes intra-EU trade. Prospects for World Agriculture: USDA/ERS

  28. Global Cotton Imports Million bales 1/ Includes Mexico. 2/ Malaysia, Philippines, Thailand, and Vietnam. 3/ Bangladesh, India, and Pakistan. 4/ European Union, former Soviet Union, and Other Europe. Prospects for World Agriculture: USDA/ERS

  29. Global Cotton Exports Million bales Prospects for World Agriculture: USDA/ERS

  30. Livestock and Meats Prospects for World Agriculture: USDA/ERS

  31. Beef and Veal Imports: Major Countries1 Million metric tons 1/ Selected importers. 2/ European Union-15 prior to 1999, EU-25 thereafter. Excludes intra-EU trade. Prospects for World Agriculture: USDA/ERS

  32. Pork Imports: Major Countries1 Million metric tons 1/ Selected importers. Prospects for World Agriculture: USDA/ERS

  33. Poultry Imports: Major Countries1 Million metric tons 1/ Selected importers. 2/ European Union-15 prior to 1999, EU-25 thereafter. Excludes intra-EU trade. Prospects for World Agriculture: USDA/ERS

  34. Meat Exports from Major Exporters Million metric tons Poultry Pork Beef & veal Prospects for World Agriculture: USDA/ERS

  35. S. Amercia: Meat Exports Million metric tons Poultry Beef Pork Prospects for World Agriculture: USDA/ERS

  36. Uncertainties - General • Economic growth: Will it be less rapid than projected? • Energy prices: Will petroleum & natural gas prices drop from current highs -- or rise even further? What will be impact on fertilizer and fuel costs? • Diseases: Will Avian influenza, BSE, FMD and Asian rust spread to other countries? • Supply response: How fast can world ag production respond to future shocks in production? • Additional crop land: How much can be brought into production -- on a sustainable basis? • Water shortages: Agriculture competition with residential, commercial and industrial demand? Prospects for World Agriculture: USDA/ERS

  37. Uncertainties - Country Specific • Argentina: Expansion in crop area? Productivity growth? Expansion in cattle feed-lot sector? • Brasil: Expansion in crop area? Infrastructure improvements (transportation & on-farm storage)? • China: Becomes a net corn importer? Soybean imports continue to rise? Possible revaluation of Yuan? Water shortages constrain farm production? • Eastern Europe: Becomes the bread basket for Europe and a major exporter? • Asian Rice Consumption: Trend in per capita consumption continues to decline? Prospects for World Agriculture: USDA/ERS

  38. Conclusions Prospects for World Agriculture: USDA/ERS

  39. Farm Prices1 Corn, Wheat, and Soybean $ per bushel Soybeans Wheat Corn 1Nominal U.S. farm prices Prospects for World Agriculture: USDA/ERS

  40. Livestock Prices1 $ per hundredweight Beef cattle Broilers Hogs 1Nominal U.S. prices Prospects for World Agriculture: USDA/ERS

  41. Conclusions • Demand: Strong income growth in developing countries and increasing population increases import demand for bulk commodities and high-value products. • Production: Slower producivity growth, but still nearly sufficient to maintain global level of per capita production. • Trade: Continued growth in global trade in most agriculture commodities. But trade continues to be very competitive. • Prices: Prices for farm products, after adjusting for inflation, will decline more slowly than in past decades. Prospects for World Agriculture: USDA/ERS

  42. Prospects for World AgricultureBaseline Projections to 2014 USDA-ERS baseline briefing room http://www.ers.usda.gov/briefing/baseline Gracias, Obrigado, y Thank you Ronald Trostle Economic Research Service U.S. Department of Agriculture

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