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USDA Agricultural Baseline Projections to 2014. Office of the Chief Economist, World Agricultural Outlook Board, U.S. Department of Agriculture. Prepared by the Interagency Agricultural Projections Committee. Baseline Report OCE-2005-1, 116 pp.

Abstract

This report provides longrun baseline projections for the agricultural sector through 2014. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices. The projections are based on specific assumptions regarding macroeconomic conditions, policy, weather, and international developments. The baseline assumes that there are no shocks due to abnormal weather or other factors affecting global supply and demand. The 2002 Farm Act is assumed to remain in effect throughout the baseline. The baseline projections presented are one representative scenario for the agricultural sector for the next decade. As such, the baseline provides a point of departure for discussion of alternative farm sector outcomes that could result under different assumptions. The projections in this report were prepared in October through December 2004, reflecting a composite of model results and judgment-based analysis.

Steady domestic and international economic growth and gains in population strengthen demand for food and agricultural products in the baseline, providing a favorable demand setting for the U.S. agricultural sector. The United States will remain competitive in global agricultural markets although trade competition will continue to be strong. Gains in global consumption, world trade, U.S. agricultural exports, and domestic demand for agricultural products result in rising farm commodity prices and cash receipts, which help to improve the financial condition of the U.S. agricultural sector. The U.S. agricultural trade balance is projected to return to a moderate surplus after 2005, but will remain smaller than in the past two decades.

Keywords: Projections, baseline, crops, livestock, trade, farm income, food prices.

February 2005