The Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO) have come together for the 14th year to prepare the OECD-FAO Agricultural Outlook 2018-2027. This report is enriched by our close collaboration with contributing member country institutions, specialised commodity bodies, and other partner organisations, and has become an annual benchmark that provides a consistent picture of medium-term trends in global agriculture.

The Agricultural Outlook 2018-2027 is a collaborative effort of the OECD and FAO prepared with input from the experts of their member governments and from specialist commodity organisations. It provides a consensus assessment of the ten-year prospects for agricultural and fish commodity markets at national, regional and global levels. This year’s edition contains a special chapter on the prospects and challenges of agriculture and fisheries in the Middle East and North Africa.

This chapter provides an overview of the latest set of quantitative medium-term projections for global and national agricultural markets. The projections cover consumption, production, stocks, trade and prices for 25 agricultural products for the period 2018 to 2027. The weakening of demand growth is expected to persist over the coming decade. Population will be the main driver of consumption growth for most commodities, even though the rate of population growth is forecast to decline. Per capita consumption of many commodities is expected to be flat at a global level. Consequently, the slower growing demand for agricultural commodities is projected to be matched by efficiency gains in production which will keep real agricultural prices relatively flat. Beyond the traditional risks that affect agricultural markets, there are increasing uncertainties with respect to agricultural trade policies and concerns about the possibility of rising protectionism globally

This chapter reviews the prospects and challenges facing the agricultural sector in the Middle East and North Africa (MENA) region. A dominant concern in the MENA region is its high and growing dependence on international markets for key staple food products, as arable land and water grows scarcer. Policies in the region support grain production and consumption, with the result that 65% of cropland is planted with water-thirsty cereals, in particular wheat which accounts for a large share of calorie intake. The outlook for the MENA region projects slow growth in food consumption, gradual changes in diet to include higher livestock consumption, continued water use at unsustainable rates, and continued and increasing reliance on world markets. An alternative approach to food security would reorient policies towards rural development, poverty reduction, and support for production of higher-value horticulture products. Such a change would contribute to more diversified and healthier diets, but would require building the capacity of farmers to minimise risk while raising higher value crops

This chapter describes the market situation and highlights the latest set of quantitative medium-term projections for world and national cereals markets for the ten-year period 2018-27. Global cereal production is projected to expand by 13% by 2027, accounted for in large part by higher yields. For maize and wheat, the Russian Federation is emerging as a major player on international markets, having surpassed the European Union in 2016 to become the top wheat exporter. For maize, market shares will increase for Brazil, Argentina and the Russian Federation while declining for the United States. Thailand, India, and Viet Nam are expected to remain the major suppliers on international rice markets, while Cambodia and Myanmar are projected to capture a greater share of the global export market. Over the projection period, prices are expected to increase slightly in nominal terms but decline modestly in real terms.

This chapter describes the market situation and highlights the latest set of quantitative medium-term projections for world and national oilseeds markets for the ten-year period 2018-27. Global oilseeds production is expected to expand at around 1.5% p.a., well below the growth rates of the last decade. Brazil and the United States will be the largest soybean producers, with similar volumes. Protein meal use will grow more slowly due to slower growth in livestock production and as the protein meal share in Chinese feed rations has reached a plateau. Demand for vegetable oil is expected to grow more slowly due to slower growth in per capita food use in developing countries and the projected stagnation in demand as feedstock for biodiesel. Vegetable oil exports will continue to be dominated by Indonesia and Malaysia, while soybean, other oilseeds and protein meal exports are dominated by the Americas. Prices are projected to increase slightly in nominal terms over the outlook period, with slight declines in real terms

After two consecutive seasons of supply shortage, global sugar production rebounded in the 2017 marketing year (October 2017-September 2018), with growth close to that recorded five years ago. Good weather conditions in India and Thailand, increased production in the People’s Republic of China (hereafter “China”) and the end of production quotas in the European Union are the main reasons for this increase. But the largest producer, Brazil, experienced a decline in sugar output as processing sugarcane into ethanol became more profitable than sugar production.

Overall world meat production increased by 1.25% to 323 Mt in 2017, with moderate increases in the production of bovine and poultry meats and more modest gains in pig and sheep meat. Much of the world meat production expansion originated in the United States but other main contributors were Argentina, India, Mexico, the Russian Federation and Turkey. Meat production in the People’s Republic of China (hereafter “China”), the world’s largest meat producer, increased little overall mainly because of the lower growth in poultry meat production as several Avian Influenza (AI) outbreaks affected the country. Nevertheless, China remained the second largest contributor to the 2017 increase in meat production.

This chapter describes the market situation and highlights the latest set of quantitative medium-term projections for world and national dairy markets for the ten-year period 2018-27. Growth in world milk production is projected to increase by 22% over the projection period, with a large share of the increase coming from Pakistan and India. In 2027, these two countries are expected to jointly account for 32% of global milk production. Most of the additional production in these countries will be consumed domestically as fresh dairy products. Over the projection period, the European Union's share in global exports of dairy commodities is expected to increase from 27% to 29%. As the 2017 butter bubble continues to deflate, nominal and real prices for butter will decrease over the projection period. With the exception of skim milk powder (SMP), dairy prices are expected to decrease in real terms.

This chapter describes the market situation and highlights the latest set of quantitative medium-term projections for world and national fish markets for the ten-year period 2018-27. Global fish production will continue to grow, albeit at a much reduced pace compared with last decade. Additional output derives completely from continued but slowing growth in aquaculture, while capture fisheries production is expected to fall slightly. Policy changes in China imply a potentially large reduction in the growth of its aquaculture and capture fisheries output. Asian countries will account for 71% of the increase in fish consumption as food, and per capita fish consumption will increase in all continents except Africa. Fish and fishery products will continue to be highly traded; Asian countries will continue to be the main exporters of fish for human consumption while OECD countries will remain the main importers. Fish prices will all increase in nominal terms but remain broadly flat in real terms

This chapter describes the market situation and highlights the latest set of quantitative medium-term projections for world and national biofuel markets for the ten-year period 2018-27. Given current policy developments and trends in diesel and gasoline demand, global ethanol production is expected to expand from 120 bln L in 2017 to 131 bln L by 2027, while global biodiesel production is projected to increase from 36 bln L in 2017 to 39 bln L by 2027. Advanced biofuels based on residues are not expected to take off over the projection period due to lack of investment in research and development. Trade in biofuels is projected to remain limited. Global biodiesel and ethanol prices are expected to decrease respectively by 14% and 8% in real terms over the next decade; however, the evolution of ethanol and biodiesel markets will continue to be shaped by policies and demand for transport fuel, which implies considerable uncertainty on these projections.

This chapter describes the market situation and highlights the latest set of quantitative medium-term projections for world and national cotton markets for the ten-year period 2018-27. World cotton production is expected to grow at a slower pace than consumption during the first few years of the outlook period, reflecting lower prices and releases of global stocks accumulated between 2010 and 2014. India will remain the world’s largest country for cotton production, while the global area devoted to cotton is projected to recover slightly despite a decrease of 3% in China. Processing of raw cotton in China is expected to continue its long-term downward trend, while India will become the world’s largest country for cotton mill consumption. In 2027, the United States remains the world’s main exporter, accounting for 36% of global exports. Cotton prices are expected to be lower than in the base period (2015-17) in both real and nominal terms, as the world cotton price is continuously under pressure due to high stock levels and competition from synthetic fibres.

This section provides information on how the projections in the Agricultural Outlook are generated. First, a general description of the agricultural baseline projections and the Outlook report is given. Second, the compilation of a consistent set of the assumptions on macroeconomic projections is discussed in more detail. Section 3 provides reference to the underlying Aglink-Cosimo model, while the last section explains how a partial stochastic analysis is performed with the Aglink-Cosimo model.