The COVID pandemic brought greater-than-normal uncertainty to the assumptions the USDA used to come up with its projections for agricultural markets 10 years into the future, the department said in its annual Agricultural Outlook Forum projections.
As the Outlook Forum commences in Washington, D.C., today, the department’s Interagency Agricultural Projections Committee released its agricultural projections to 2031, saying, “The macroeconomic assumptions underlying USDA’s long-term projections reflect the economic consequences of the global spread of the COVID-19 pandemic that began in 2020.”
World economies rebounded unevenly last year, and there are projections for even more growth in coming years, but the path to recovery is unclear.
PLANTED ACREAGE TO GROW THEN DECLINE
Total planted acreage to the eight major US field crops was expected to increase modestly over the first several years of the 10-year projection period compared with the 2021/22 season and to decline slightly thereafter, the report said.
Planted acreage for those crops peaks at 255.6 million in 2023/24 and ends at a near low of 251.7 million in 2031/32, the USDA said. A three-million-acre increase from 24 to 27 million in the legislated cap to the Conservation Reserve Program was anticipated to allow for a quick expansion in CRP acreage.
CRP acreage was expected to rise from 20.5 million in 2021/22 and exceed 26 million every year after 2023/24, reaching the cap for the last three years of the projections, the USDA said.
MOST MEAT, DAIRY, EGG PRODUTION FORECASTS RISE
In the livestock sector, meat, dairy and egg production were expected to rise continuously throughout the 10-year period, except for beef, which continues a recent downward trend through 2023 before resuming growth, the USDA said. Production of milk, eggs and all meat products except turkey end the projection period at record levels.
Note that for animals and animal products, the projections began with calendar year 2023, while figures for calendar year 2022 and earlier were based on published data as of Oct. 12, the USDA said. Overall growth of milk, chicken and egg production range from 9.1% to 14%, in that order. Estimated pork production grows 7.9%, beef rises 6.2%, and turkey increases 4.6%.
CROP PRICES SEEN HIGHER
Prices for most crops rose dramatically in 2021/22 based on supply issues, a resurgence of exports for some crops, logistical issues and economic recovery, the USDA said.
After that, prices for all crops decline starting in 2022/23 through the projection period. For most crops with declining prices, most of the adjustment takes place in the next four years.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $142.61 to $144.23 per cwt, compared with last week’s range of $140.55 to $143.00. FOB dressed steers and heifers went for $221.90 to $224.11 per cwt, versus $218.70 to $224.02.
The USDA choice cutout Wednesday was down $0.76 per cwt at $260.88, while select was down $4.68 at $258.96. The choice/select spread widened to $1.92 from minus $2.00 with 161 loads of fabricated product and 35 loads of trimmings and grinds sold into the spot market.
The USDA reported that basis bids for corn from feeders in the Southern Plains were unchanged at $1.15 to $1.25 a bushel over the Mar futures and for southwest Kansas were unchanged at $0.20 over Mar, which settled at $6.83 3/4 a bushel, up $0.09.
No contracts were tendered for delivery against Feb on Wednesday.
The CME Feeder Cattle Index for the seven days ended Tuesday was $162.26 per cwt up $0.13. This compares with Wednesday’s Mar contract settlement of $162.77 per cwt, down $1.45.