Agricultural Outlook June-July 2002

Nora Brooks, Economics Editor

Agricultural Outlook No. (292) June 2002

About this magazine

AO is the main source of USDA's farm and food price forecasts. AO emphasizes the short-term outlook for all major areas of the agricultural economy. It also presents long-term analyses of such issues as U.S. agricultural policy, trade forecasts and export-market development, food safety, the environment, and farm financial institutions. Each issue includes 30 pages of data on individual commodities, the general economy, U.S. farm trade, farm income, production expenses, input use, prices received and paid by farmers, per capita food consumption, and related issues. AO is published 10 times per year by the Economic Research Service, U.S. Department of Agriculture. Materials may be reprinted without permission. Contents have been approved by the World Agricultural Outlook Board. Release of summary for the August 2002 issue: July 22, 2002. Release of complete text-only version: July 23.

In this report ...

Articles are in Adobe Acrobat PDF format.

Contents, 449 kb

In This Issue, 460 kb

Briefs

• World Economic Growth Positive But Slow—The world economy is now in a gradual recovery driven by U.S. and Asian growth. Despite the Japanese and German recessions, world growth is expected to be about 2 percent in 2002, up modestly from 1.4 percent in 2001. Given a slow world recovery, the dollar will stay strong, oil prices will moderate, and U.S. interest rates will remain low. David Torgerson (202) 694-5334, 455 kb.

• Meat Production in 2003 Essentially Unchanged—Red meat and poultry production in 2003 is forecast at about 84.5 billion pounds, about the same as this year. Continuing moderate increases in broiler and pork production, helped by expectations of continuing low feed costs, will offset the expected decline in beef production. Although red meat and poultry supplies are expected near record levels, a modest rebound in exports and economic expansion in 2003 should lead to fractionally higher prices. Leland Southard (202) 694-5187, 559 kb.

• Cuba's Citrus Industry: Growth & Trade Prospects—Cuba is the world's third largest grapefruit producer, after the U.S. and Israel. Citrus is a major commercial crop and generates significant revenues for Cuba. Production consists primarily of oranges and grapefruit. Agriculture is a key component of the Cuban economy, and if trade restrictions between Cuba and the U.S. were eased, the citrus sector has the potential to generate both Cuban markets for U.S. exports and U.S. markets for Cuban exports. William E. Kost (202) 694-5246, 507 kb.

Commodity Spotlight

• Stable Field Crop Supplies Forecast for 2002/03—Supplies of most major U.S. field crops are expected to rise in 2002/03, according to USDA’s first projection of production and prices for the next marketing year. Bountiful production is anticipated despite similar or lower planted acres for most crops this year, although production gains for corn and oats are driven by large projected planted acreage increases. Higher use may offset downward pressure on farm prices for some crops, as relatively low prices are expected to encourage domestic consumption and exports. Gregory K. Price (202) 694-5315, 529 kb.

World Agriculture & Trade

• South Korea's Agricultural Policy Hampered Economic Growth—The rapid economic development of South Korea (Korea) is often considered a model for developing countries, and some may consider adopting the Korean pattern of policy choices. However, while Korea clearly prospered between 1975 and 1990, a new study by USDA’s Economic Research Service (ERS) finds that Korea’s agricultural trade policies hindered the country’s economic progress. Korea’s protective policies kept resources in agriculture, which, combined with high food prices, limited growth in the manufacturing and services sectors. John Dyck (202) 694-5221, 519 kb.

• Non-trade Concerns: International Debate & U.S. Policy—Among the topics for World Trade Organization (WTO) negotiations on agriculture, non-trade concerns remain one of the more contentious. “Non-trade concerns” refer to a range of issues related to agriculture but not strictly linked to traditional trade measures. The term covers environmental protection, rural development, and food security. The crux of the debate derives from the presumption that agricultural production is necessary to obtain these noncommodity outputs. Non-trade concerns became controversial when used in trade negotiations to justify exemptions from commitments or to support reconsideration of other disciplines. Mary Anne Normile (202) 694-5162, 493 kb.

Resources & Environment

• Public Lands & Western Communities—Net migration into the West and changing preferences for recreation opportunities and environmental amenities are increasing demand for recreational/environmental goods and services. This, in turn, is reshaping the economic relationship between public lands and rural communities. Traditional uses of public lands in the West—such as grazing, mining, and forestry—remain key sources of rural jobs and income, but continuing demographic changes are likely to put additional pressures on policymakers regarding multiple uses for public lands. Kenneth H. Mathews Jr. (202) 694-5183, 2,284 kb.

• Communications & the Internet in Rural America—Beginning with the telephone, communication and information service innovations have penetrated rural America in fits and starts. The marked decline in investment in telecommunications since the dot-com bust in the late 1990s will slow the diffusion of Internet and other new services, but demand for these services is likely to continue growing. The availability of new services and their affordability will be determined by public policy, economic feasibility and technical limits of new technologies, and market incentives. Peter L. Stenberg (202) 694-5366, 873 kb.

Special Article

• Does Land Degradation Threaten Global Agricultural Productivity & Food Security?—Global food production has risen more rapidly than population in recent decades, but 800 million people remain food insecure. Soil erosion and other forms of land degradation can reduce productivity growth and increase food insecurity, particularly where fragile resources combine with poverty and poorly functioning markets. When markets function well, however, farmers have incentives to adopt appropriate conservation practices. Recent ERS research indicates that land degradation does not threaten productivity growth and food security at the global level. Keith Wiebe (202) 694-5529, 536 kb.

Statistical Indicators, 622 kb.

The new Farm Bill: Side-by-side comparison with previous legislation , 448 kb

New electronic newsletter/yearbook on floriculture and environmental horticulture, 504 kb

Entire issue, 3,368 kb.

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Updated date: June 2002