Agricultural Outlook September 2002

Nora Brooks, Economics Editor

No. (294) September 2002

About this magazine

AO addresses a broad spectrum of agriculture-related issues. It provides short-term outlook articles on commodity markets and food prices. It also presents in-depth analyses of U.S. agricultural policy, trade and export markets, food production and safety, the environment, the rural economy, and farm financial institutions.

In this report ...

Articles are in Adobe Acrobat PDF format.

Contents, 445 kb

In This Issue, 476 kb

Briefs

• Pork Production to Reach Record Levels in 2002 & 2003—U.S. hog producers are expected to respond to higher feed costs by reducing the number of sows farrowing in 2003. Pigs per litter are expected to increase slightly, as less productive sows are eliminated from the breeding herd. USDA forecasts pork production at 19.8 billion pounds in 2002, and 19.85 billion pounds in 2003. Both quantities exceed all previous levels. Mildred Haley (202) 694-5176, 473 kb.

• U.S. Sugar Policy Under the 2002 Farm Act—The 2002 Farm Act reauthorized the sugar price support loan program, and a key change requires that USDA operate the sugar loan program at no cost to the Federal government. To accomplish this, the Act includes measures to discourage forfeiture of sugar to the government by processors who offered it as collateral for nonrecourse loans under the program. Among the cost-reducing provisions is USDA authority to impose flexible marketing allotments. Stephen Haley (202) 694-5312, 567 kb.

• Demand Strong for Tree Nuts—Strong demand for tree nuts, especially in export markets, has been driving up shipments this season. Supply is also strong, the result of large crops and large beginning stocks, and the net effect is lower grower prices. But overall revenue is expected to be high, because of the high volume of tree nut crops being moved. Susan L. Pollack (202) 694-5251, 473 kb.

Commodity Spotlight

• Strong Competition & Rising Prices Confront U.S. Soybean Exports—The U.S. soybean crop for 2002 is forecast at 2,628 million bushels, well below last year's record. The forecast reflects a decline in both plantings and expected yield. Crop rotations, improved net returns for corn, and economic and weather conditions in western states encouraged greater planting of corn and the lowest U.S. soybean area since 1998. Lower soybean supplies will promote a hard retreat in U.S. soybean exports. Higher U.S. prices will erode the ability to compete with likely aggressive export campaigns by Brazil and Argentina. Mark Ash (202) 694-5289, 514 kb.

• Cabbage Heads Higher—The French word for cabbage is incorporated into a term of endearment: "mon petit chou" ("my little cabbage"). This vegetable has recently become a little more endearing to Americans, a turnaround from a steady decline in use between the 1920s and the 1990s. In the past decade, fresh-cut products, new recipes, and a growing body of nutritional research have lent new support to cabbage demand. Total cabbage consumption rose to 10.3 pounds per person in the early 2000s. Gary Lucier (202) 694-5528, 501 kb.

World Agriculture & Trade

• The Ongoing Reform of Land Tenure Policies in China—Economic transition, rapid economic growth, and increased integration into the world economy are propelling substantial changes in rural China. How farmers respond to changing economic opportunities and challenges depends critically on choices about use of land and other resources—choices that depend on land tenure patterns. Control over land in China reflects a complex and changing distribution of authority among the national government, local governments and households, with potential implications for efficiency, equity, and environmental quality. Bryan Lohmar (202) 694-5226, 1,319 kb.

• Trade Among Unequal Partners: Changing EU Trade Arrangements with Developing Countries—The European Union (EU), more than other members of the World Trade Organization (WTO), has used exceptions to international trading rules to provide nonreciprocal trading preferences to selected developing countries. Some of these arrangements have been challenged under WTO procedures as discriminatory and not in compliance with trade rules. To achieve compatibility, the EU proposes to convert these arrangements into reciprocal free trade areas. Many elements of the EU's current and proposed free trade area arrangements also remain controversial and untested in the WTO. Gene Hasha (202) 694-5168, 517 kb.

Research & Technology

• Genetically Engineered Crops: U.S. Adoption & Impacts—Since the introduction of genetically engineered (GE) crops in 1996, U.S. farmers have rapidly adopted some varieties. Soybeans and cotton with herbicide-tolerant traits have been the most widely and rapidly adopted GE crops in the U.S., followed by insect-resistant cotton and corn. Analyses by USDA's Economic Research Service and others indicate economic benefits to many farmers adopting first-generation GE crops. Not all benefits of GE crop adoption are reflected in standard measures of net returns. Jorge Fernandez-Cornejo (202) 694-5537, 517 kb.

• Does Off-Farm Work Hinder "Smart" Farming?—As off-farm income takes on greater importance to farm households, less time is available for farm management. Smart farming (e.g., soil testing, integrated pest management, and precision farming) typically substitutes management for capital. The value of management time and effort does not typically enter into calculations of economic returns to alternative production technologies or farming systems. The result could be misleading in understanding the benefits of technology adoption, particularly if farm households are willing to forego some financial return from farming to gain convenience. Katherine R. Smith(202) 694-5500, 489 kb.

Statistical Indicators, 1,019 kb.

Announcing a new magazine from ERS, 436 kb.

Agricultural Outlook Forum 2003, 492 kb.

Entire issue, 1,404 kb.

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Updated date: September 2002