Net farm income is projected to be relatively strong during the next 10 years, averaging about $67 billion, according to the U.S. Dept. of Agriculture's Agricultural Projectors to 2016. Increases in corn-based ethanol production provide a major impetus for this strong income projection. Growth in export demand also contributes to increases in agricultural commodity prices and gains in farm cash receipts.
During the next 3-4 years, rapid expansion in global production of biofuels changes the price relationships among various agricultural commodities. Production of all meats slows or declines in the first half of the projections, reflecting higher feed costs and lower producer returns as more corn is used in the production of ethanol. After those productions adjustments, strong domestic demand and some strengthening in meat exports result in higher prices and higher returns, providing economic incentives for expansion in the sector. Prices of poultry and pork in the
U.S. feed use of corn typically accounts for 50-60% of total corn use and the United States typically accounts for 6070% of world corn exports. Market adjustments to higher prices result in a reduced share of corn used directly for domestic livestock feeding and a lower