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.
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.
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. Since 2015, acreage has increased each year, but remains below its peak in 2014.
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.
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 as the U.S. dollar strengthens.