Corn Projections Through 2018
Posted: February 16, 2009
It is hard enough to forecast the next year, much less the next ten years, but that is what USDA’s Economic Research Service has attempted to do with its latest Long Term Agricultural Projections report released last week. Not surprisingly, they expect prospects for the agricultural sector in the near term to reflect adjustments to the global economic slowdown and the U.S. recession.
Among the projections for the next decade in corn, the report says “a gradual shift to corn away from other crops reflects the high levels of domestic corn-based ethanol production and gains in exports that keep corn demand and producer returns strong. Following a decline in 2008, corn acreage increases to 90 million acres by 2011 and remains at or above that level over the remainder of the projection period.”
ERS expects net farm income to initially decline from the highs of 2007 and 2008, yet still remain historically strong, rebounding to near-record levels in the latter part of the projections. Retail food prices are expected to continue to increase more than general inflation through 2011 (particularly meats in 2010 and 2011), but then food prices return to the longer term relationship of rising less than the general inflation rate over the remainder of the projection period.