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USDA 10-Year Projections: Increased Production, Huge Export Boost to China

USDA 10-Year Projections: Increased Production, Huge Export Boost to China

23 February 2013

GLOBAL - Irrational weather and an ever-increasing global population raises many questions about the future predictions of staple crops. A USDA report projects steady economic growth and increased production over the next 10 years, with a huge boost in exports to China.

Steady global economic growth provides a foundation for continuing strong crop demand. Corn-based ethanol production in the United States is projected to rebound from 2012’s decline, although the pace of further expansion slows considerably.

Nonetheless, the combination of world economic growth, a depreciating dollar, and continued expansion of global biofuels production supports longer run gains in world consumption and trade of crops.

Prices are projected to fall from recent record highs but remain above pre-2007 levels for many crops. Following the near-term decline in prices and planted acreage, strong demand and rising prices provide economic incentives for increases in plantings beyond 2015.

Acreage enrolled in the Conservation Reserve Program (CRP) is projected to decline below 28 million acres in 2013-14 before rising back to close to 32 million acres by the end of projection period.

The projections reflect provisions of the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Act), which is assumed to be extended through the projection period.

Weather-adjusted Trend Yields for Corn and Soybeans

Long-term trends in crop yields reflect improvements in yield-enhancing technology, such as new hybrids, as well as improvement in production practices, such as better pest and nutrient management and precision planting, that in turn support greater per-acre plant populations.

However, several years of poor weather during the US growing season for corn and soybeans have resulted in below-trend yield outcomes for the last 2-3 years.

Thus, assessing the effects of weather on recent yields is important for determining underlying trend yields for these crops. Weather-adjusted yield models were developed for corn and soybeans to provide this information.

Results summarized here are based on data available in January 2013. Earlier versions of these models, based on data available in November 2012, were used for the weather-adjusted, US corn and soybean trend yield projections in this report.


Corn acreage is projected to remain high in the near term, with normal yields leading to an increase in production and a recovery of corn use.

Although corn-based ethanol production is projected to slow significantly, its continued high levels combine with gains in exports and feed use to keep corn use high.

Following several years of adjusting markets, increasing producer returns lead to gradually rising corn acreage in a range of 88 million to 92 million acres after 2015.

For other feed grains, after near-term adjustments, planted area falls back from recent highs over the rest of the projection period.


Strong global demand for soybeans, particularly in China, boosts soybean trade over the projection period—China accounts for almost 90 percent of the increase in world soybean imports.

Even though US soybean exports are projected to rise, competition from South America leads to a reduction in the US share of global soybean trade from 39 percent in 2013/14 to about 30 percent by 2022/23.


Strong wheat prices and expected net returns boost wheat plantings for 2013.

However, with relatively weak overall demand growth projected for wheat, producer returns initially fall and then rise less than returns for other crops in subsequent years.

This leads to a decline in wheat plantings to 50 million acres by the end of the projection period, continuing a long-term general downward trend since the early 1980s.


Competition from other crops is projected to keep US acreage planted to all rice from increasing in 2013.

While a small area increase is projected for medium- and short-grain rice, long-grain rice plantings fall.

With lower relative prices for competing crops in subsequent years, rice area rises through the rest of the projection period.

Domestic use of rice is projected to grow slightly faster than population growth. Moderate expansion in US food use of rice is projected to continue over the next decade.

US rice imports are projected to expand over the next decade, but at a slower rate than in the past.

Asian aromatic varieties, classified as long-grain rice, are expected to continue to account for the bulk of US purchases.


A decline in US mill use of cotton since the late 1990s reflected a gradual, long-term movement of spinning capacity to developing countries.

Continued increases in US imports of apparel from Asia will reduce domestic apparel production and lower the apparel industry’s demand for fabric and yarn produced in the United States.

However, US mill use is projected to grow somewhat over the next decade in response to rising demand for US textile product exports, mainly to other countries in the Western Hemisphere.

Nonetheless, even with this growth, however, domestic mill use is projected to represent about 23 percent of total use at the end of the projection period, down from more than 60 percent in the late 1990s.


Moderate growth is projected for US beet and cane sugar production over the next decade.

Beet sugar production levels in the first two years of the projections are low, at an annual average of 4.752 million short tons, raw value (STRV) due to lower sugarbeet prices relative to prices for alternative crops.

Beet sugar production in 2022/23 is projected at 5.319 million STRV, about 4.20 percent higher than in 2012/13.

Cane sugar production in 2022/23 is projected at 3.864 million STRV, about 3.87 percent higher than in 2012/13.

Over the projection period, sweetener availability (the sum of refined sugar, sugar in net imported products, and high fructose corn syrup (HFCS)) is 119 pounds per capita.

There is only limited substitution between sugar and HFCS as a function of relative prices.

Sugar deliveries for human use average 11.854 million STRV over the projection period, with annual growth of about 0.7 percent a year.

Beet sugar production averages 345,000 STRV below its average share of the Overall Allotment Quantity (OAQ) under the sugar marketing allotment program.

In no year does beet sugar production exceed its OAQ share. Cane sugar production averages 839,000 STRV below its average OAQ share.

Production levels in all cane sugar producing States remain below their OAQ shares.

Sugar imports from Mexico rose sharply starting in 2008 when duty-free sweetener trade between the United States and Mexico began, and are projected to average 1.516 million STRV over the next decade, representing about 12.8 percent of US domestic sugar consumption.

Two conditions in Mexico underlie this projection. First, beverage and food manufacturers in Mexico continue to expand the substitution of lower cost HFCS (except for the first two years of the projection period) for domestic sugar.

Second, remunerative prices in Mexico favor modest expansion of sugarcane area and increased sugar production.

It is assumed that Mexico will not import sugar from third nations to replenish low sugar supplies caused by large exports to the US market.

Further Reading

You can view the full report by clicking here.

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