Long-term farm income to rise, USDA says | Michigan Farm News

Long-term farm income to rise, USDA says

Category: Markets & Weather

by USDA

Working in Spring_MFN_2018
Strong global demand for soybeans is expected to induce soybean plantings that exceed corn acreage.

This report provides projections for the U.S. agricultural sector to 2027. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income. The projections are based on specific assumptions about macroeconomic conditions, policy, weather, and international developments, with no domestic or external shocks to global agricultural markets.

The Agricultural Act of 2014 (farm bill) is assumed to remain in effect through the projection period. The projections are one representative scenario for the agricultural sector for the next decade and reflect a composite of model results and judgment-based analyses.

The projections in this report were prepared during October 2017 through January 2018 and are based on conditions as of the November 2017 World Agricultural Supply and Demand Estimates (WASDE) report.

Over the next several years, the agricultural sector continues to adjust to lower prices for most farm commodities. Planted acreage drops slightly despite continued low energy costs. However, marked shifts occur – most notably strong global demand for soybeans is expected to induce soybean plantings that exceed corn acreage.

Lower feed costs and continued strong global demand provide economic incentives for expansion in the livestock sector. Long-run developments for global agriculture reflect steady world economic growth and continued but slower global demand growth for biofuel feedstocks, factors which combine to support longer run increases in disappearance, trade, and nominal prices of agricultural products. Although a relatively strong U.S. dollar is expected to dampen growth in U.S. agricultural exports, the United States remains competitive in global agricultural markets, in part due to efficiency and quality margins, and export values grow over the next 10 years.

Net farm income is expected to increase in 2018 followed by a drop, steadying out towards the middle of the decade and rising over the latter part of the projection period.

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