02/16/07 Ten Year Projections

USDA has released its 10-year agricultural projections. And according to the report - corn and ethanol will be the two major movers of the ag economy over the next decade. By 2009 - USDA Analyst David Stallings says ethanol will consume 30-percent of U.S. corn production - up from the 20-percent it currently consumes. Of course he says corn production is likely to increase as well. Stallings says corn growers planted 78.6-million acres this year - and that number is expected to jump drastically in the next couple of years - as acres are switched to corn from soybeans. STALLINGS: By 2009, 2010, we've got corn area planted at about 90-million acres. Even with the additional production - Stallings says USDA doesn't predict falling corn prices. STALLINGS: We see a fairly rapid increase in corn prices for 2007-08 and 2008-09; and then peaking in 2009-10 at an average farm prices of 3.75 per bushel. In fact - USDA doesn't even think corn prices will dip below three-dollars any year in the next decade. But with rising crop prices and declining government payments - Stallings says net cash income will remain fairly flat for the next ten years - though higher than this past season's 66.5-billion. STALLINGS: We do expect net cash income to be above it's most recent 5-year average and we expect it to peak at around 70-billion dollars from 2009 through 2012. As for exports - USDA expects them to soar - reaching nearly 95-billion dollars in 2017 as a result of higher crop prices and faster world economy growth. USDA says these 10-year projections should not be considered a USDA forecast - but rather a conditional, long-run scenario based on specific assumptions about farm policy, the weather, the economy and international developments. For more on the report - visit the Office of the Chief Economist at www dot usda dot gov slash oce (www.usda.gov/oce). That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.