Economic Research Service--Agricultural Outlook Magazine

Publications

Agricultural Outlook

January/February 1999

Economics Editor: Dennis A. Shields, dshields@ERS.USDA.gov

This issue was published in January 1999 by the Market and Trade Economics Division.

Agricultural Outlook is published 10 times per year by the Economic Research Service, U.S. Department of Agriculture. To order Agricultural Outlook, please visit the ERS-NASS Sales Desk. The contents section at the bottom of this page links to each article in Adobe Acrobat PDF format.

In This Issue...

NET FARM INCOME TO DECLINE BUT REMAIN NEAR 1990-98 AVERAGE -- USDA's financial outlook for U.S. agriculture remains generally favorable, despite recent price collapses for many commodities. With prospects of lower production expenses and additional government payments authorized by recent legislation, net farm income for 1999 is forecast down $3.4 billion to $44.6 billion, still near the 1990-98 average. Farmers' equity should increase for the 10th straight year. Nonetheless, specific segments of the industry and areas of the country will continue to have cash flow problems. Mitch Morehart, 202-694-5581, morehart@ERS.USDA.gov

FINANCIAL CRISES ABROAD, LOWER FEED COSTS SHAPE BROILER PROSPECTS -- Economic crises in Asia and Russia have combined to depress U.S. poultry export projections for 1998 and 1999, especially for broilers. The 1998 broiler export estimate has been lowered to 4.5 billion pounds and the forecast for 1999 reduced to 4.3 billion. With the export market impact on dark meat, which comprises only 25-35 percent of the value of a broiler, the strength of the domestic market has offset potential negative effects on profitability. As a result, U.S. broiler production is expected to grow about 5 percent in 1999. David Harvey, 202-694-5177, djharvey@ERS.USDA.gov

GREEN INDUSTRY RECEIPTS GROW DESPITE IMPORTS -- The U.S. green industry--producers of indoor and outdoor flowers and plants--has seen cash receipts rise an average $500 million per year for more than a decade despite a steady loss of domestic market share to foreign growers. Consumer confidence in a robust economy, and low interest rates that spur new housing and businesses, will push retail floral and plant product purchases to a record $54.6 billion in 1998, up $2.9 billion from 1997. Doyle C. Johnson, 202-694-5248, djohnson@ERS.USDA.gov

CIGARETTE PRICE INCREASE FOLLOWS TOBACCO PACT -- Key elements of the recent agreement between the tobacco industry and state attorneys general require manufacturers to pay $206 billion to states over a 25-year period (including $300 million annually for research to reduce youth smoking and to support other anti-smoking measures). Combined with expenses from four previous state settlements, the agreement will have an inflationary effect on cigarette prices. Cigarette consumption is expected to decline, curbing demand for tobacco leaf and reducing marketing quota levels. Thomas Capehart, Jr., 202-694-5311, thomasc@ERS.USDA.gov

FARMING UNDER CONTRACT -- Nearly $60 billion of U.S. crops and livestock--about one-third--was grown or sold under contract in 1997, according to USDA's Agricultural Resource Management Study, and more than 1 in 10 farm operators reported income from contractual arrangements. Two-thirds of farms with contracts in 1997 were small family farms, but larger family farms and nonfamily farms accounted for more than three-fourths of the value of products grown and sold under contract. David Banker, 202-694-5559, dbanker@ERS.USDA.gov

CONSERVATION ON RENTED FARMLAND: A FOCUS ON U.S. CORN PRODUCTION -- Analysis by USDA's Economic Research Service indicates a significant relationship between land tenure and corn farmers' decisions to adopt certain conservation practices. Based on 1996 data, cash-renters and share-renters are less likely than owner-operators to adopt contour farming, strip cropping, or grassed waterways. Cash-renters are also less likely to adopt conservation tillage, while share-renters adopt this practice at about the same rate as owner-operators. These findings may have implications for resource use and environmental quality. If the percentage of farmland rented continues to rise, future adoption of certain conservation practices, at least for corn producers, may be lower than otherwise expected. Meredith Soule, 202-694-5552, msoule@ERS.USDA.gov

TECHNOLOGY EASES PERISHABLES' JOURNEY -- Advances in transportation technology have extended the marketing reach of U.S. perishable products by reducing delivery times, maintaining product quality, and reducing costs. The revolution in perishable product shipping technology began with containerization--handling standardized containers filled with cargo rather than the cargo itself. Next came "reefers"--20- or 40-foot boxes with their own refrigeration units--and a further refinement--controlled atmosphere technologies--allowed shippers to regulate gases and humidity within containers to slow ripening, retard discoloration, and maintain freshness. Nicole S. Ballenger, 202-694-5202, nicole@ERS.USDA.gov

This publication is in Adobe Acrobat Reader 4.0 PDF format. You can download and get help using the Adobe Acrobat Reader to view and print this document. Text-only versions of Agricultural Outlook are also available, immediately after publication clearance.

Contents; 64 kb.

In This Issue...; 27 kb.

Briefs; 50 kb.

Livestock, Dairy, & Poultry: Broiler Prospects Shaped by Financial Crises Abroad, Lower Feed Costs.
Specialty Crops: Green Industry Cash Receipts Growing Despite Import Competition.
Farm Structure: More Farmers Contracting To Manage Risk.

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