Consolidations and mergers are expected to continue as the food processing segments seek to reduce operating costs and capitalize on core competencies in specific markets. Food processors are also shifting emphasis to improving long-term profitability with increased investment in newer technology aimed at higher productivity and implementation of new product development programs. These trends will be especially important in fast growing value-added product lines where increased domestic and foreign competition, declining profit margins, and rising costs for regulatory compliance are threatening the pace of future growth.

Global food demand is expected to outpace gains in production, until the adoption of new technology catches up in both the U.S. and abroad. The cost of farm inputs will increase slightly faster than historical trends because of greater constraints on natural resources and environmental measures, but total production costs will rise more slowly due to improved productivity. Mid-sized farms will continue consolidating or breaking up into smaller "life style" rural homes.