I remember my economics professors at the University of Wisconsin four decades ago stating the importance of agriculture in feeding the growing world population.
Looking back, they were right, but how does agriculture look going forward?
World food demand is expected to double by 2050, influenced by global population expansion and rising income levels. World grain production and consumption have increased fourfold since 1990.
Net cash farm income reached a record high of slightly more than $90 billion in 2008 but dropped significantly in 2009 to approximately $69 billion.
Net cash farm income for 2010 is expected to increase 23 percent, or $16.2 billion, and move well above the previous 10-year average.
Total cash receipts are expected to increase 6.5 percent to slightly more than $300 billion in 2010.
Crop cash receipts are forecast at $164 billion in 2010, $600 million above 2009, reflecting offsetting trends in different crop categories:
- Sales of corn for grain, the largest single source of crop cash receipts for U.S. farmers, is forecast at $40.3 billion in 2010.
- Soybean receipts in 2010 are expected to reach a record $30.5 billion, reflecting an expected record harvest and high soybean prices.
Livestock cash receipts are forecast at $137.5 billion in 2010.
- Dairy cash receipts are expected to increase $6.4 billion to $30.7 billion in 2010. Milk production is expected to increase through productivity gains. Milk prices also are expected to increase.
- Cattle cash receipts could increase to $48.6 billion in 2010, based on expected higher prices.
- Hog receipts could rise to $18.1 billion in 2010, due to lower hog numbers and improved domestic and foreign demand.
Producers will rely less on government farm payments compared to recent years, leveling out at nearly 14 percent of net cash farm income. Fixed direct payments and conservation program payments will anchor government support to producers.
Farm production expenses are expected to increase 1.1 percent in 2010 after a 4.1 percent decline in 2009.
The farm sector balance sheet will remain favorable. A solid foundation for net cash farm income boosts asset accumulation and debt management.
The future outlook for agriculture is positive. I would offer today’s students the same advice my economics professors gave 40 years ago: U.S. agriculture will continue to play a prominent role in the global economy and will provide excellent opportunities for those who elect to work in this industry.