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USDA’s Long-Term Baseline Projections
Neilson C. Conklin
Director, Market and Trade Economics Division, Economic Research Service, USDA
Prepared for
USDA Agricultural Outlook Forum
February 2000
USDA’s Long-term
Baseline Projections
Neilson Conklin, Director
Market and Trade Economics Division
Economic Research Service, USDA
Baseline Projections
• Assumptions
• Current Situation
• Longer Term Prospects
• Uncertainties
Some Critical Assumptions
• Continued macroeconomic improvement
– reform and recovery in crisis countries
– global growth rates averaging about 3% over
the period
• Policy assumptions
–
–
–
–
U.S. no further emergency assistance
loan rates follow formula after 2000
no EU enlargement
no change in trade regimes
Setting the stage: the current situation
• Weak prices
– Declining export values
– Declining cash receipts
– Higher government payments
• Weak agricultural commodity prices reflect:
– Weakness in demand
– Large supplies
Wheat: Ratio of exporter stocks
to
world
trade
120
Major exporters
100
Major exporters less U.S.
Percent
80
60
40
20
0
1970
1975
1980
1985
1990
1995
Major exporters: U.S., EU-15, Canada, Australia, Argentina
2000
2005
2010
U.S. stocks-to-use ratios
45
40
Wheat
35
Percent
30
25
Corn
20
15
10
Soybeans
5
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
120
U.S. Stocks-to-Use Ratios
Increased in the Late 1990s
100
Wheat
Percent
80
60
40
Corn
20
Soybeans
0
1975
1980
1985
1990
1995
2000
2005
2010
Major Commodity Prices
8
$/Bu
6
4
2
0
1998/99
2000/01
2002/03
Wheat
2004/05
Corn
2006/07
Soybeans
2008/09
Soybean Prices and Loan Rates
Dollars per bushel
8
7
Price
6
5
Loan Rate
4
3
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
90
80
$ per cwt.
70
Nominal Livestock Prices
Beef: Choice steers, Nebraska
Broilers
60
50
40
Pork: Iowa, So. Minn. market
30
20
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Net Farm Income
70
Billion dollars
60
50
40
30
20
10
0
1975
1980
1985
1990
1995
2000
2005
2010
Changing Expectations
100
Value of Agricultural Exports
90
$ Bil
80
70
60
50
40
1996
1998
2000
1998
2002
1999
2004
2000
2006
2008
Uncertainties
• Weather
• Agricultural Policy
• Global Supply Response
• China
10
Real GDP Growth: Selected
Southeast Asian Countries
Percent
5
0
-5
-10
-15
1997
Korea
1999
Taiwan
2001
2003
Indonesia
2005
Malaysia
2007
2009
Philippines
Thailand