usda’s long-term projections to 2024 · market conditions –lower agricultural commodity prices...
TRANSCRIPT
Paul Westcott
U.S. Department of Agriculture
Economic Research Service [email protected]
February 2015
Highlights of
USDA’s Long-term Projections to 2024
Presentation Topics
• Background on long-term projections
• Overview of projections
• Key assumptions
• Selected results
– Trade
– U.S. crops
– U.S livestock
• Uncertainties
Background
Background for long-term projections
• 10 year annual projections for agriculture
– Covers major U.S. and international agricultural markets
• Projections, not forecasts
– Conditional, long-run scenario
– Neutral assumptions for macroeconomic conditions, agricultural policy, weather
• Prepared by USDA interagency committees – Composite of models & judgment-based analysis
• Start with November WASDE report
Projections Overview
• Short- to medium-term adjustments to current
market conditions
– Lower agricultural commodity prices
– Supply response for both crop and livestock sectors
• Longer term market developments
– Long-term supply and demand factors
Overview: Two parts to each set of projections
• Short- to medium-term adjustments to current
market conditions
– Lower agricultural commodity prices
– Supply response for both crop and livestock sectors
• Longer term market developments
– Long-term supply and demand factors
• Implications
– Prices projected to bottom out over next several
years and then increase
Overview: Two parts to each set of projections
Demand
• Developing country population and economic growth
lead to increased food demand
• Biofuel developments
– Expansion slows
– Continued demand for biofuel feedstocks
Supply
• Yield growth slowing
Overview: Key factors underlying long-term projections
Key Assumptions—Macroeconomy
-4
-2
0
2
4
6
8
1990 1995 2000 2005 2010 2015 2020 2025
Macroeconomic assumptions: Growth in developing economies important for agriculture
GDP growth, percent
Developing economies
Source: USDA Agricultural Projections to 2024, February 2015.
World
Developed economies
-0.5
0.0
0.5
1.0
1.5
2.0
2.51991-2000
2001-10
2015-24
Population growth continues to slow: Strongest growth in developing countries
Average annual percent
Source: U.S. Department of Commerce, U.S. Census Bureau.
USDA Agricultural Projections to 2024, February 2015.
World United
States
Former
Soviet
Union
Developing
countries
Developed
countries
Key Assumptions—Biofuels
Biofuels
• U.S. ethanol use constrained by
– Declining gasoline consumption
– 10-percent blend wall
• U.S. biodiesel mandate assumed fixed at
1.28 billion gallons per year
• EU biofuel use slows
Key Assumptions—Yields
Exponential annual growth rates
Coarse grains 1.7
Wheat Rice 2.3
Corn 2.0
Commodity
Global crop yield growth
generally lower than past 40 years
Oilseeds
2.5
1.9
Soybeans Cotton
1.3 2.2
percent
1970-1990
1.8
0.9
1.7 1.0
1.7
1.2 1.9
1990-2010 2014-2024
1.0
0.6
1.0 0.6
0.8
1.0 1.3
Source: USDA Agricultural Projections to 2024, February 2015.
Selected Results Commodity trade projections
Wheat 89
Coarse grains 102
Rice 98
Commodity
Developing economies drive
global agricultural trade growth
Soybeans Cotton
104 100
percent
Source: USDA Agricultural Projections to 2024, February 2015.
Share of global import growth
from developing countries,
2015 to 2024
Selected trade projection highlights
• China has a strong presence in trade for many agricultural commodities
• U.S. agricultural sector continues to face trade competition from South America
0
10
20
30
40
50
60
70
1990 1995 2000 2005 2010 2015 2020 2024
China’s per capita meat consumption continues to grow
Kilograms per person
Source: Preliminary international results underlying USDA Agricultural Projections to 2024, February 2015.
Poultry
Beef
Pork
0
5
10
15
20
25
30
2010 2011 2012 2013 2014 2015
EU Japan Mexico Canada China
Fiscal year
China has been the top destination for
U.S. agricultural exports in recent years
Billion dollars
Source: USDA, Foreign Agricultural Service and Economic Research Service.
China agricultural policies, selected provisions
• China emphasizes the production of grains over
soybeans
• Policies favor the imports of soybeans over
imports of soybean meal and soybean oil
to use a large oilseed crushing capacity
0
20
40
60
80
100
120
140
160
1990 1995 2000 2005 2010 2015 2020 2024
Other
China
Africa & M. East
NAFTA
Latin America 1/
S & SE Asia 2/
East Asia
Million metric tons
1/ Excludes Mexico which is part of NAFTA. 2/ Includes Oceania.
Source: USDA Agricultural Projections to 2024, February 2015.
.
Global corn imports
0
20
40
60
80
100
120
140
160
1990 1995 2000 2005 2010 2015 2020 2024
China
Other
N. Africa & Middle East
Latin America 1/
East Asia
EU
Million metric tons
1/ Includes Mexico.
Source: USDA Agricultural Projections to 2024, February 2015.
Global soybean imports
0
2
4
6
8
10
12
14
1990 1995 2000 2005 2010 2015 2020 2024
Other
N. Africa & Middle East
China
EU, FSU, & OE 1/
India
Latin America 2/
Other Asia 3/
Million metric tons
1/ European Union, former Soviet Union, and other Europe.
2/ Includes Mexico. 3/ Asia excluding India and China.
Source: USDA Agricultural Projections to 2024, February 2015.
Global soybean oil imports
0
10
20
30
40
50
60
70
1980 1985 1990 1995 2000 2005 2010 2015 2020 2024
Area harvested, South America: Soybeans
Million hectares
Source: Preliminary international results underlying USDA Agricultural Projections to 2024, February 2015.
Other
Brazil
Argentina
0
20
40
60
80
100
120
140
160
1990 1995 2000 2005 2010 2015 2020 2024
Other
Argentina
Brazil
Other South America
United States
Million metric tons
Source: USDA Agricultural Projections to 2024, February 2015.
Global soybean exports
0
10
20
30
40
50
60
70
80
1990 1995 2000 2005 2010 2015 2020 2024
Other
Argentina
Brazil
United States
Million metric tons
Global soybean meal exports
Source: USDA Agricultural Projections to 2024, February 2015.
0
2
4
6
8
10
12
1990 1995 2000 2005 2010 2015 2020 2024
Other
Argentina
Brazil
EU
United States
Million metric tons
Source: USDA Agricultural Projections to 2024, February 2015.
Global soybean oil exports
Selected Results U.S. crop projections
75
100
125
150
1990 1995 2000 2005 2010 2015 2020 2025
Fiscal year
U.S. agricultural exports, bulk volume
Million metric tons
Source: USDA Agricultural Projections to 2024, February 2015.
0
20
40
60
80
100
120
140
1990 1995 2000 2005 2010 2015 2020 2024
United States
Other
FSU 1/
Argentina
Brazil
Million metric tons
1/ Former Soviet Union.
Source: USDA Agricultural Projections to 2024, February 2015.
.
Global corn exports
0
1
2
3
4
5
6
7
1990/91 1995/96 2000/01 2005/06 2010/11 2015/16 2020/21 2024/25
Crop year
U.S. corn use projections: Corn-based ethanol shows little change
Billion bushels
Feed use
Exports
Ethanol
Source: USDA Agricultural Projections to 2024, February 2015.
0.0
0.5
1.0
1.5
2.0
1990/91 1995/96 2000/01 2005/06 2010/11 2015/16 2020/21 2024/25
U.S. soybean use projections
Billion bushels
Domestic use
Exports
Source: USDA Agricultural Projections to 2024, February 2015.
Crop year
240
245
250
255
260
265
1990 1995 2000 2005 2010 2015 2020 2024
U.S. planted area: Eight major crops1
Million acres
1 The eight major crops are corn, sorghum, barley, oats, wheat, rice, upland cotton, and soybeans.
Source: USDA Agricultural Projections to 2024, February 2015.
0
2
4
6
8
10
12
14
1990/91 1995/96 2000/01 2005/06 2010/11 2015/16 2020/21 2024/25
Prices reflect global demand & continued biofuel use: Retreat from recent highs, but remain above historical averages
$/bushel
Corn
Soybeans
Wheat
Source: USDA Agricultural Projections to 2024, February 2015.
Crop year
Selected Results U.S. livestock projections
15
20
25
30
35
40
45
1990 1995 2000 2005 2010 2015 2020 2024
U.S. livestock sector responds to lower feed prices:
Production increases
Billion pounds
Beef
Broilers
Pork
Source: USDA Agricultural Projections to 2024, February 2015.
0
25
50
75
100
125
150
175
1990 1995 2000 2005 2010 2015 2020 2024
U.S. livestock prices
$ per hundredweight, nominal, U.S. markets
Beef cattle: Steers, 5-area
Broilers:
National composite
Hogs: National base
Source: USDA Agricultural Projections to 2024, February 2015.
5
10
15
20
25
1990 1995 2000 2005 2010 2015 2020 2024
Milk prices
Dollars per hundredweight
Source: USDA Agricultural Projections to 2024, February 2015.
Uncertainties
80
90
100
110
120
130
1990 1995 2000 2005 2010 2015 2020 2025
U.S. dollar value strengthening
Real U.S. agricultural trade-weighted dollar exchange rate, using U.S. agricultural export weights, based on
192 countries.
Source: USDA Agricultural Projections to 2024, February 2015.
Index values, 2010=100
Updated,
December 2014 estimate
Long-term projections
0
20
40
60
80
100
120
1990 1995 2000 2005 2010 2015 2020 2025
U.S. crude oil prices: Sharply lower in near term
Dollars per barrel Refiner acquisition cost,
crude oil imports,
long-term
projections
Source: USDA Agricultural Projections to 2024, February 2015.
EIA February 2015
Short-term Energy Outlook
Summary
Summary
Near term market adjustments to lower prices
Longer term demand factors • Global economic growth and population increases, particularly in
developing countries, provide the foundation for gains in demand
for agricultural products
• Continued global biofuel production adds to agricultural demand
Longer term supply factors
• Slower yield growth
Prices • Crop prices retreat from recent highs before rising in the projections
• Meat and dairy prices also reflect increased production, in response
to lower feed prices