Trends in global population, income levels, and energy markets could mean more business for U.S. agriculture, USDA chief economist Keith Collins says.
"If these forces do come together, as we anticipate they will, the next few years look very promising," Collins says.
World per capita income is growing, most likely meaning a sustained demand for food, and global Gross Domestic Product looks strong too.
Growth in food spending is expected to slow compared to strong rates the past two years, but the global economy appears to be expanding enough to keep demand for food up. Higher income levels tend to especially raise demand for meats, dairy products, fruits and vegetables.
"The US economy grew at 3.3 percent in 2006," Collins says. "Perhaps what is most amazing is the resiliency of the U.S. economy over the past couple of years. Growth has been solid despite high oil prices, rising short-term interest rates, inflationary concerns, slow downs in housing and domestic auto sales, the continuing budget deficit, and heavy defense expenditures."
"Add the demand for biofuels to the strong foundation for demand for food, and U.S. agriculture faces very profound shifts in crop production in 2007," Collins adds.