OECD-FAO Agricultural Outlook › Overview of 2014
The international prices of major crops have dropped significantly from their historical highs, largely in response to bumper crops in 2013/14. In contrast, meat and dairy product prices are at historically high levels, primarily because their supply fell short of expectations in 2013. World ethanol and biodiesel prices continued their declines from the historical peak levels they had reached in 2011 in a context of ample supply for both.
Demand for agricultural products is expected to remain firm although expanding at slower rates compared with the past decade. Cereals are still at the core of human diets, but growing incomes, urbanization and changes in eating habits contribute to the transition of diets that are higher in protein, fats and sugar.
In the next decade, livestock and biofuel production are projected to grow at higher rates than crop production. This changing structure of global agricultural production prompts a relative shift toward coarse grains and oilseeds to meet demands for food, feed and biofuel, away from staple food crops like wheat and rice. The bulk of the additional production will originate in regions where determining factors, such as land and water availability, and policy regulations, are the least constraining.
Crop prices are expected to drop for one or two more years, before stabilizing at levels that remain above the pre-2008 period, but significantly below recent peaks. Meat, dairy and fish prices are expected to rise. In real terms, however, prices for both crops and animal products are projected to decline over the medium term. The expected stock-to-use ratios for cereals improve significantly, which should ease concerns about their price volatility.
World fishery production will be driven primarily by gains in aquaculture in developing countries. Sustained high costs in a context of firm demand will keep fish prices well above their historical averages, holding back consumption growth in the coming decade.
Production growth will come mainly from developing countries in Asia and Latin America. Trade continues to grow, although at a slower pace compared with the previous decade. The Americas will strengthen their position as the dominant export region, both in value and volume terms, while Africa and Asia will increase their net imports to meet their growing demand.
Recent policy reforms in agriculture and fisheries markets have enabled demand and supply fundamentals to become more responsive to market signals; however, both remain influenced by policies such as producer support, public stockholding and biofuel mandates. Further policy changes are underway. The United States’ Agricultural Act of 2014 and the 2013 reform of the Common Agricultural Policy in the European Union have been agreed upon during the last year; however, their provisions are not considered in the current projections because implementation details have not been completed/specified.
For more information, access the full publication online and peruse the underlying data in our agricultural outlook database.