Specialists share information about the outlook for U.S. agriculture and the possible implications for LAC

San Jose, Costa Rica. Specialists from the Inter-American Institute for Cooperation on Agriculture (IICA) shared details of the USDA’s forecasts for the agricultural sectors of the U.S. and the rest of the world, and considered the possible implications for the sector in Latin America and the Caribbean (LAC).

A virtual workshop was held at the end of March to allow specialists of the IICA Delegation in the U.S. and the Center for Strategic Analysis for Agriculture (CAESPA) to share the main results of the USDA’s Agricultural Outlook Forum, which took place during the last week of February.

“Given the importance of the U.S. in global agricultural production and trade, the Agricultural Outlook Forum has become a default source of information for the governments of other countries and firms that participate in global agricultural markets,” pointed out Miguel García, IICA’s Representative in the United States and coordinator of CAESPA.

In addition to the analysis performed by the USDA’s Economic Research Service (ERS) to forecast the outlook for the world’s leading agricultural producers, exporters, and importers, renowned experts from academia, governments and private enterprise discussed the most important issues involved in the current state of the world’s agriculture.

The virtual workshop, webcast to the authorities, decision-makers, and specialists of IICA’s 34 member countries, facilitated a wide-ranging discussion of the issues addressed in the Forum, which are of great importance for Latin America and the Caribbean.

A high-level event

The Agricultural Outlook Forum began with an expert presentation on the economic outlook for U.S. agriculture in 2016. Parallel sessions were then held to discuss the forecasts for the core U.S. agricultural commodity markets, such as grains, cereals, oilseeds, sugar, dairy products, livestock, etc., and the outlook for the issues on the agricultural agenda of the country’s public and private sectors.

With regard to the economic outlook, the speakers highlighted the weak global economic growth (mainly in the Euro Area and LAC), and the slowdown in China’s economy over the last two years.

Joaquín Arias, IICA Specialist in Policies and Sectoral Analysis, noted that the macroeconomic scenario had reduced demand for agricultural commodities, leading to an oversupply and lower international prices for products like corn, wheat and soybeans.

“Product prices have fallen along with international prices of inputs such as oil, which are an incentive for agricultural production as production and transport costs have fallen, as has the demand for biofuels,” explained Arias.

In the sessions on international trade, the participants discussed the fall in the value of the agricultural exports of the U.S. and countries in other regions of the world, while there was strong interest in the evolution of China’s agricultural market and the potential impact of the Trans-Pacific Partnership (TPP), an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP).

“China is an important player in the global food market, so the economic slowdown has reduced the value of agricultural exports, mainly exports of coarse grains,” observed Hugo Chavarría, CAESPA specialist in strategic analysis.

He went on to explain that the value of U.S. agricultural exports to China fell in 2015 as a result of the Asian country’s sluggish economic growth, lower international prices, the policy of food self-sufficiency, and the appreciation of the dollar, among other factors.

“The outlook for U.S. agricultural trade is positive thanks to the expected growth in demand for food, lower transport costs, and the expected effects of the signing of the TPP,” Chavarría added.

Important issues

The issues of conservation, climate change, and natural resources sparked particular interest during the event. Emphasis was placed on organic farming’s contribution to sustainability and the role of climate smart agriculture as a strategy for mitigating and offsetting the effects of climate change.

“Organic agriculture is playing a leading role in the U.S. due to its growth in the markets. The 77% increase in sales of products of this kind between 2011 and 2014 demonstrates the level of consumer interest and confirms that this activity will continue to present opportunities for LAC producers,” observed the leader of IICA’s flagship project Competitiveness and Sustainability of Agricultural Chains, Daniel Rodríguez.

Other issues addressed were big data, the agrarian structure in the U.S., and the human talent required to boost the competitiveness and sustainability of agriculture.

“Precision farming, based on the use of data and information, has helped to increase agricultural yields and the sustainability of natural resources. However, certain questions continue to be raised by farmers, governments, and the private sector, especially concerning the question of data ownership and whether precision technologies could potentially be used by small-scale producers,” García affirmed.

In light of this situation, he explained, it was important for progress to be made with regulations governing data property rights and the bridging of the gaps between data and technological developments and their applicability.

The forum was also used to present the challenges in relation to land ownership in the U.S., and to stress the need for new training and capacity creation models attuned to the new market conditions.

“As in LAC countries, the average ages of agricultural workers and landowners in the U.S. have increased in recent years. Combined with the limited availability of farmland for new purchases, this poses major challenges for incorporating young people into the sector,” observed CAESPA research assistant Eugenia Salazar.

The presentations made during the USDA’s Agricultural Outlook Forum can be accessed at http://1.usa.gov/21POjsL. The presentation made by IICA’s specialists during the virtual forum can be accessed at http://bit.ly/1omMNRE. The latter contains information that IICA’s specialists regard as important, but does not reflect the position of the USDA).

More information: miguel.garcia@iica.int