US and Global Ag Outlook

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March 29, 2022

Farm cash receipts are projected to top $400 billion a year in the 2020s despite falling government payments

The three major US crops by acreage are corn, soybeans, and wheat. Their combined acreage of about 230 million acres accounts for over 70 percent of harvested US crop land.

Corn, soybeans and wheat account for 70% of US crop land harvested

The value of US fruit, tree nut, vegetable, and pulse (dry bean) crops was $49 billion in 2020, and is projected to increase to $57 billion by 2031. By value, fruits and nuts were worth $28 billion in 2020 and vegetables were worth $21 billion. By volume, the 55 billion pounds of US fruits and nuts were swamped by the 128 billion pounds of US vegetables.

US fruits and nuts were worth $28 billion and vegetables $21 billion in 2020

Noncitrus fruits such as apples, strawberries, and cherries accounted for $15 billion or over half of the $28 billion in fruits and nuts in 2020, followed by tree nuts worth $10 billion and citrus worth $3 billion. US fruit and nut production is expected to rise slightly to 54 billion pounds worth $31 billion by 2031, reflecting a decline in citrus production to 12 billion pounds while tree nut production rises to 10 billion pounds.

Fresh vegetables (including melons, mushrooms and sweet potatoes) are 30 percent of total vegetable output by volume, followed by processing vegetables, 28 percent, potatoes, 20 percent, and pulses, 12 percent. Fresh vegetables are 60 percent of the total value of vegetables, potatoes, and pulses, led by lettuce, tomatoes, onions, and sweet potatoes. Tomatoes are 70 percent of US processing vegetables by value.

The value of by fresh vegetables is projected to rise 30% between 2020 and 2013, and the value of tree nuts by 20%

USDA acknowledges that its data collection systems do not fully reflect output from CEA or controlled environment agriculture such as greenhouses and urban vertical farms. CEA production of tomatoes, cucumbers, and other fresh vegetables is rapidly replacing open-field production.

Trade. The US has had an agricultural trade surplus since 1960, exporting farm goods worth more than the value of imported farm goods. However, the US farm trade surplus is projected to become a deficit as the US imports more high-value fruits and vegetables while the value of US exports of meat and grains stabilizes.

The US farm trade surplus is expected to become a deficit after 2022

Half of US farm exports are grains and oilseeds that are produced in competition with other major farm exporters including Brazil, Canada, and Russia. The value of US meat and dairy product exports is about equal to the value of US fruit and vegetable exports.

Half of US farm exports are grains and oilseeds

US farm imports are dominated by horticultural products including fruits and vegetables, and the horticultural share of US farm imports is expected to increase in the 2020s. The value of US farm imports is expected to increase by almost $100 billion during the 2020s, from $163 billion in FY21 to $261 billion in FY31.

US horticultural imports are projected to increase by almost $100 billion by FY31

Horticultural imports include beer, wine, and distilled spirits, but most are fresh fruits and vegetables and packaged or prepared food products. Many imported horticultural products are organic, making them less sensitive to price and currency fluctuations.

Inflation. Food prices are expected to increase in 2022 due to increased costs for farm inputs such as fertilizers, rising labor costs, and shipping cost increases amidst reduced output attributed to drought, natural disasters, and the Russian invasion of Ukraine in February 2022. La Nina weather, which is occurring in 2021-22 in a repeat of 2011-12, typically means droughts in South America and the southern US.

The FAO global food price index rose over 25 percent between 2020 and 2021

Rabobank expects wheat prices to top $8 a bushel in 2022, corn to decline to about $6 a bushel, and soybean prices to decline to less than $13 a bushel. The price of Arabica coffee is projected to drop from the current $2 a pound by the end of 2022.

The prices of wheat, sugar, and palm oil are rising, while the prices of corn and soybeans are falling

Palm oil is the world’s major vegetable oil, and most of the 80 million metric tons produced each year are from Indonesia, which has 15 million hectares producing 60 million tons, and Malaysia, with five million hectares producing 18 million tons. High fertilizer prices reduced yields of palm oil, while Malaysian covid-prevention policies limited the entry of migrant workers who cut bunches of palm oil fruit from trees for processing.

Palm oil accounts for almost half of the stock of vegetable oils

Stocks of coffee went from surplus to shortage during covid, allowing prices to double from about $1 to $2 a pound. Brazil is expected to produce 45 million bags of Arabica and 21 million bags of Robusta coffee in 2022-23, which should reduce coffee prices.

Coffee prices doubled to over $2 a pound at the end of 2021

NYC-based Gro Intelligence, which uses AI predict commodity prices, predicts high food price inflation in developing countries whose currencies fall as the Fed raises US interest rates, making imported food more expensive.

States. There are several ways to group states by their major farm commodities. One grouping finds that grains and oilseeds such as soybeans were the most valuable commodity in 16 states, poultry and eggs in nine states, and cattle and milk in seven states each. Fruits, nuts and berries were the most valuable commodities in three states, CA, FL, and WA, and vegetables including potatoes were the most valuable commodity in two states, AZ and ME.

Grains and oilseeds were the major ag commodity in 1/3 of US states

Source: https://howmuch.net/articles/the-most-valuable-agricultural-commodity-per-each-state

References

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