Highlights from Congressional Budget Baseline through 2024/25
The CBO baseline indicates weaker prices for cotton over the decade ahead. CBO puts the 2013/14 cotton price at 76 cents per pound and prices fall to less than 66 cents per pound by 2016/17 before rebounding to 70 cents per pound by the end of the forecast. Cotton acreage drops to a low of 9.85 million acres by 2019 but rebounds to 10.1 million acres in 2024. Domestic use for cotton increases by nearly 9 percent over the decade, a significant change from recent trends. The U.S. cotton stocks-to-use ratio stays above 0.30 throughout the 2014/15 through 2024/25 period.
No one has a crystal ball that they can use to see the future. Long range forecasts, by necessity, balance production and disappearance over the long term, otherwise there are unsustainable increases or decreases in stocks. Essentially all forecasts show corn acreage falling below the levels in recent years, even with pretty optimistic forecasts for demand. It is very unlikely that crop markets will turn out to be as stable as indicated in long-range forecasts.
Weather events that cause yields to deviate from trends will cause big changes in stocks and prices. Still, the long range forecasts provide some insights into how many acres of the various crops will be needed to satisfy expected demand.
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