WASHINGTON, D.C. -- Despite continued high energy prices, the Food and Agricultural Policy Research Institute expects world economic growth to remain strong in the coming decade, at around 3 percent per annum, boosting consumption of vegetable oil, dairy products, and meat in many parts of the world.
This projection is part of FAPRI's 2006 agricultural outlook presented to Congress today. The outlook runs from crop years 2005/06 to 2015/16. According to FAPRI, solid commodity prices and a persistently weak U.S. dollar in industrialized trading countries keep U.S. exports strong for the next 10 years.
FAPRI also reports that new policy developments and rising interest in renewable fuels due to high fossil energy costs are expected to boost ethanol and biodiesel markets in the United States, European Union and Asia. Industry thus expands its use of oilseeds, grains, and sugarcane, and prices are sustained. Ethanol trade is projected to double in the next decade, increasing from 0.65 to 1.20 billion gallons. The world ethanol price increases by 1.8 percent, reaching $1.32 per gallon in 2015.
The agricultural outlook is a set of 10-year projections for U.S. and international commodity markets prepared each year for policymakers and agricultural planners. FAPRI is an economic research group with centers at Iowa State University and the University of Missouri-Columbia. The projections incorporate recent macroeconomic forecasts and currently adopted agricultural policies.
Other highlights from FAPRI's 2006 agricultural outlook:
The multi-year FAPRI projections provide a starting point for evaluating and comparing scenarios involving macroeconomic, policy, weather, and technology variables in world agricultural trade. More information is available at the Iowa State and University of Missouri FAPRI Web sites.
SOURCE: Iowa State University news release.