Agricultural Outlook, October 2002

Nora Brooks, Economics Editor

Agricultural Outlook No. (295) October 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, 464 kb

In This Issue, 459 kb

Briefs

• Poor Weather Reduces 2002 U.S. Apple Crop—This year's U.S. apple crop will be smaller for the third consecutive year due to adverse weather during the growing season. Apple production in 2002 is forecast to decline to 9.2 billion pounds—the smallest crop since 1988. With production down significantly in both the Eastern and Central states, even an increase in production in the Western region (with 60 percent of U.S. production) will not prevent overall declines. Agnes Perez (202) 694-5255, 497 kb.

Commodity Spotlight

• Organic Food Industry Taps Growing American Market—American consumer interest in organically grown foods has opened new market opportunities, leading to a transformation in the organic foods industry. Organic food is currently sold in a wide variety of venues, including farmers' markets, natural foods supermarkets, conventional supermarkets, and club stores. New national organic standards will facilitate the marketing of organic products to consumers. Carolyn Dimitri (202) 694-5252, 520 kb.

• French Fries Driving Globalization of Frozen Potato Industry—Driven largely by growing global popularity of Western-style cuisine, frozen french fries and other frozen potato products are generating billions of dollars in sales worldwide each year. Worldwide exports of frozen potato products in 2000 (over 90 percent frozen french fries) were valued at $1.9 billion. Rapid expansion of quick-service restaurants is key to the tremendous growth in worldwide consumption and trade of frozen potato products. Charles Plummer (202) 694-5256, kb.

• U.S. Agricultural Exports to Rise $4 Billion in 2003—Sharply higher prices for grains and soybeans, reflecting drought-reduced U.S. production, are expected to boost U.S. agricultural exports to $57.5 billion in fiscal year 2003, a 7.5-percent gain over 2002. Bulk commodity exports are likely to lead the gains, although high-value product exports also are expected to increase. In contrast to export value, bulk export volume will be down in 2002, mainly from lower soybean volume. Carol Whitton (202) 694-5287, 568 kb.

• EU Revisits Ag Reform with Bold New Proposals—The Commission of the European Union (EU) is proposing bold changes to its Common Agricultural Policy (CAP). The core proposal is a single annual whole-farm payment, not requiring production by farmers. Support for large farms would be cut. Greater emphasis would be placed on rural development, food safety, animal welfare, and environmental regulations. The proposals have implications for WTO negotiations and EU enlargement. But for many commodities, CAP price support and stabilization mechanisms are maintained. David Kelch (202) 694-5151, 550 kb.

Food & Marketing

• Food Price Inflation to Moderate in 2002 & 2003—The U.S. Consumer Price Index (CPI) for all food is forecast to increase 2.1 percent in 2002 and 2-2.5 percent in 2003, compared with 3.1 percent in 2001. In 2002, record beef, pork, and poultry supplies, plus a lackluster domestic economy, are holding down meat prices. Smaller potato supplies should push up the fresh vegetable CPI in 2002. But adequate supplies of fresh fruits, dairy products, nonalcoholic beverages, and other processed foods will likely keep the food-at-home price increase below 2 percent. Annette L. Clauson (202) 694-5389, 541 kb.

Farm & Rural Communities

• Farm Numbers: Largest Growing Fastest—Declining farm numbers, increasing farm size, and concentration of production have interested the media, the general public, and lawmakers for decades. Average farm size has grown as farms consolidated. A smaller share of farms accounts for a growing proportion of production, but the proportion of very small farms is also growing. Acreage and sales-class data show a trend toward large operations with at least 500 acres or with annual sales of at least $250,000 in farm products. Robert A. Hoppe (202) 694-5572, 541 kb.

Research & Technology

• A Role for Technology in 21st Century Global Agriculture—Technological advances can potentially enhance agricultural productivity, incomes, and quality of life. However, some regions of the world have gained little from discoveries and innovations in agriculture, partly because private research investment tends to address the market demands of developed-country consumers. One way the agricultural community and public sector could meet the needs of less developed countries is to strengthen their technological infrastructure and facilitate transfer of appropriate technologies. Margriet Caswell (202) 694-5529, 490 kb.

Special Article

• NAFTA's Impacts on U.S. Agriculture: Trade & Beyond—NAFTA, the North American Free Trade Agreement, has generally benefited U.S. agriculture and related industries. U.S. agricultural trade with Canada and Mexico more than doubled during the 1990s, a development to which NAFTA contributed. Beyond direct trade impacts, NAFTA established rules and institutions that mitigate potential trade frictions, promote foreign direct investment, and facilitate discourse on environmental issues Steven Zahniser (202) 694-5230, 571 kb.

Statistical Indicators, 616 kb.

Announcing a new magazine from ERS, 440 kb.

Agricultural Outlook Forum 2003, 488 kb.

New ERS report on organic foods market, 440 kb.

Entire issue, 1,998 kb.

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Updated date: October 2002