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Best of NAMA 2023

By Keith Good, University of Illinois FarmDoc project

On Wednesday, the U.S. Department of Agriculture released its 10-year projections for the food and agricultural sector.

In part, the baseline update explained that, "The Agriculture Improvement Act of 2018 is assumed to remain in effect through the projection period. The projections are one representative scenario for the agricultural sector and reflect a composite of model results and judgment-based analyses. The projections in this report were prepared using data through the October 2022 World Agricultural Supply and Demand Estimates (WASDE) report, except where noted otherwise. Macroeconomic assumptions were concluded in August 2022."

The report stated that, "The Baseline projects U.S. corn production to grow over the next decade as yield gains offset a slight decline in acreage. Planted area is projected to steadily decline after 2023/24's strong response to increased global demand and tight supplies."

"The stocks-to-use ratio is expected to rise somewhat rapidly, from 11.6 percent in 2023/24 to 16.0 percent in 2026/27. Later in the projection period, supply and use grow at similar rates, slowing growth in the stocks-to-use ratio," the report said.

USDA Agricultural Projections to 2031. Office of the Chief Economist, World Agricultural Outlook Board, U.S. Department of Agriculture. (February 15, 2023).

With respect to ethanol, the report noted that, "Corn used for ethanol production declines slightly over the projection period, from 5.325 billion bushels to 5.300 billion bushels by 2032/33. Expected declines in motor gasoline consumption constrains ethanol demand."

While addressing long-term corn exports, USDA explained that, "U.S. corn exports are expected to increase by 11.4 million tons to 69.2 million tons by 2032/33."

“Only Brazil is projected to increase market share by 2032/33, from 25.8 percent to 30.7 percent. The 4 largest corn exporting countries—the United States, Brazil, Argentina, and Ukraine— account for more than 85 percent of the global market share over the projection period.” (USDA Agricultural Projections to 2031. Office of the Chief Economist, World Agricultural Outlook Board, U.S. Department of Agriculture. (February 15, 2023)).

"Corn prices are expected to fall steadily from a near-record peak of $6.80 per bushel in 2022/23 to $5.70 per bushel in 2023/24 and continue a downward trend through 2026/27 before stabilizing at $4.30 through 2032/33," the report said.

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