In recent years, concerns have been voiced about the capacity of U.S. agriculture to continue meeting prospective increases in demand, foreign as well as domestic, without substantial increases in prices. Demand from abroad, which in 1976 absorbed 22 percent of U.S. agricultural production in terms of value, is likely to continue to expand rapidly. Domestic production may not grow as rapidly, however. Growth in yields has slowed markedly in recent years; the surplus of high-quality land, which can be called into production at little cost, no longer exists; and more intensive cultivation is likely to increase environmental costs. This chapter speaks to these concerns. It compares projections of foreign and domestic demand for U.S. agricultural production with projections of production potential. It also presents estimates of the land and other resource requirements that are likely to accompany efforts to meet future demand and considers the associated effects on relative prices.
This chapter's demand and production projections rest heavily on the results of a study undertaken for this project by the Economic Research Service (ERS) of the Department of Agriculture ( USDA, 1977b). That study used specialized models of the agriculture sector, in particular the National Interregional Agricultural Projections (NIRAP) model ( Jaski, 1977; and Rojko and Schwartz, 1976). The SEAS/RFF model contains materials on agriculture, but the ERS models have the advantage of being more detailed so far as foreign agricultural trade, domestic production trade, and prices are concerned.