Agricultural Production and Prices

Markets for major agricultural commodities are typically analyzed by looking at supply-and-use conditions and implications for prices. From an economic perspective, these factors determine the market equilibrium. In the U.S. agricultural sector, many interactions and relationships exist between and among different commodities. For example, corn production and prices affect feed costs in the livestock sector.

U.S. agricultural production occurs in each of the 50 States

Friday, April 1, 2016

The United States produces and sells a wide variety of agricultural products across the Nation. In terms of sales value, California leads the country as the largest producer of agricultural products (crops and livestock), accounting for almost 11 percent of the national total, based on the 2012 Census of Agriculture. Iowa, Texas, Nebraska, and Minnesota round out the top five agricultural-producing States, with those five representing more than a third of U.S. agricultural-output value.

Crop production is concentrated in California and the Midwest

Friday, April 1, 2016

California, Iowa, Illinois, Minnesota, and Nebraska are the five States with the highest value of crop sales. With its large horticultural sector, California?s overall crop value of more than $30 billion in 2012 is about 75 percent higher than that of Iowa, the second-ranked State. In contrast to California, crop values in the next four leading States derive from grains and oilseeds, particularly corn and soybeans. For other crops, Washington State typically leads the country in apple production, while Florida is the largest producer of oranges.

Livestock production is scattered across the country

Friday, April 1, 2016

Livestock production and sales occur in all 50 States. Texas, Iowa, California, Nebraska, and Kansas lead the country in sales value of livestock and their products. The cattle sector is the dominant source of value in Texas, Kansas, and Nebraska. Milk from cows accounts for about 57 percent of livestock-sale value in California. Both the hog and cattle sectors are large sources of sales value in Iowa. North Carolina is the leading producing State of poultry and eggs, followed by Georgia.

Crops account for the largest share of the value of U.S. agricultural production

Wednesday, July 20, 2016

The value of agricultural production in the United States rose over most of the last decade due to increases in production as well as higher prices. Yield gains for crops were particularly important, although acreage also rose in response to elevated prices from 2008 to 2012. Falling prices in the last two years, accompanied by some reduction in acreage, have led to a 15-percent decline in the value of crop production since 2012. While livestock production increased over the decade, high feed costs and drought led to slower growth in recent years. Cattle herd rebuilding combined with Porcine Epidemic Diarrhea Virus (PEDv) to reduce red meat production by almost 4 percent in 2014, pushing overall red meat and poultry production down more than 1 percent. Higher prices more than compensated for lower production, resulting in a 17-percent increase in the value of livestock production last year.

Corn and soybean acreage has risen since 1990, while wheat and cotton are down

Friday, August 12, 2016

Since 1990, combined acreage planted to corn, wheat, soybeans, and upland cotton in the United States has ranged from 218 million to 242 million acres. Policy changes increased planting flexibility provided to farmers starting in the 1990s, which has allowed them to respond to market signals in their cropping choices. Overall, acreage has generally been higher in recent years, with the four highest combined annual planting totals for these crops since 1990 occurring in 2011-14 when prices were higher. Reduced acreage in 2015 reflected, in part, lower prices.

Fruit and tree nuts lead the growth of horticultural production value

Friday, August 12, 2016

U.S. fruit and tree nut value of production has increased steadily over the past decade, while the value of vegetable production has been more stable. Grapes, apples, strawberries, and oranges top the list of fruits; tomatoes and potatoes are the leading vegetables. Tree-nut value rose dramatically to record levels of around $10 billion in recent years, with crop value for most major tree nut crops?led by almonds, walnuts, and pistachios?achieving historical highs.

Broiler production continues its long-term expansion

Friday, April 1, 2016

With only a few exceptions, production of broilers (the most efficient converter of feed to meat) has outpaced growth in beef and pork production since 1990, and poultry meat has been the major meat produced and consumed in the United States since the mid-1990s. Total domestic per capita beef, pork, and poultry disappearance (a proxy for use) is beginning to increase again after several years of decline that reflected higher feed costs, higher retail prices, and effects of the 2007-09 economic recession. Exports of meats and products also continue to be an important source of demand.

Growth in output per cow drives U.S. milk production gains

Friday, April 1, 2016

The number of milk cows in the United States generally fell in the 1980s and 1990s, but has generally risen over the past 10 years. Milk output has risen more than 60 percent since 1980 and now exceeds 200 billion pounds per year. Genetic developments and technological improvements underlie a pronounced upward trend in milk output per cow. Consolidation in the dairy sector also has facilitated efficiency gains in milk production.

Corn-based ethanol production in the United States has plateaued in recent years

Friday, April 1, 2016

Corn is the major agricultural input used in the United States to produce ethanol, which has accounted for 35-40 percent of U.S. corn use in recent years. Rapid expansion of ethanol production in the past decade reflected a response to high crude oil prices, the Renewable Fuel Standard, and other factors. However, ethanol production has plateaued as oil prices have fallen and the gasoline market has hit a 10-percent blend constraint.

More U.S. cotton is exported than milled domestically

Friday, April 1, 2016

The 10-year phase out of textile and apparel import quotas that existed under the international Multifiber Arrangement was completed at the start of 2005, leading to increased U.S. imports of those products and contributing to reduced U.S. milling and increased U.S. exports of cotton. Exports now account for more than 70 percent of overall use of U.S. cotton, compared with less than 40 percent in the 1990s. The United States is the leading global exporter of cotton. China is the largest destination of U.S. cotton exports.

Farm-level prices have declined from recent highs

Friday, April 1, 2016

Although prices for agricultural commodities frequently vary from year to year, they have generally moved higher in the past decade. In these aggregate measures, nominal prices for crops were up more than 70 percent above their 2005 levels, while those for livestock rose over 75 percent from 2006 to 2014. Prices for both crops and livestock fell in 2015, however, as U.S. and global markets responded to higher prices by increasing production.

Inflation-adjusted price indices for corn, wheat, and soybeans show long-term declines

Friday, August 12, 2016

Increased productivity in crop production underlies a general decrease in inflation-adjusted prices for corn, wheat, and soybeans over the past century. This downward price trend was reversed during the past decade by global growth in population and income, increasing biofuel production, and a depreciation of the U.S. dollar, but is likely to resume from these recent higher levels as population and income growth slow, biofuel production levels off, and the U.S. dollar strengthens.

Prices for beef cattle have outpaced other livestock prices

Friday, August 12, 2016

From 2000 to 2014, inflation-adjusted meat prices have reflected slower production growth as meat output responded to lower producer profits due in part to rising feed costs. Cattle production costs, production, and prices also were affected by poor forage conditions due to lingering droughts over much of the past decade, particularly in the Southern Plains. As feed prices softened, however, livestock production rose in 2015, which lowered U.S. livestock prices.