Agricultural Outlook April 2002

Nora Brooks, Richard Magleby, and Lewrene Glaser, and Anne Effland, Economics Editors

Agricultural Outlook No. (290) April 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 May 2002 issue: April 18, 2002. Release of complete text-only version: April 19.

In this report ...

Articles are in Adobe Acrobat PDF format.

Contents, 68 kb

In This Issue, 46 kb

Agricultural Economy

• USDA Longrun Projections to 2011: Global Developments Play Key Role—In USDA's new longrun, 10-year baseline projections, recovery in global economic growth leads to stronger U.S. exports, gains in agricultural commodity prices, and rising farm incomes over the next decade. Slow U.S. and global economic growth in 2001-02 and a strong U.S. dollar provide a weak setting in the near term for the agricultural sector. But in the longer run, projected improvement in world economic growth provides a foundation for gains in U.S. agricultural exports. Paul Westcott (202) 694-5335, 87 kb.

Briefs

• Imports Increase as Share of U.S. Food Consumption—In the second half of the 1990s, Americans increased the proportion of imported foods they consumed. The rise is due partly to greater demand for high-value agricultural products that other countries offer, and partly to the higher exchange rate of the U.S. dollar, which increases its purchasing power. Increasing ethnic diversity of the U.S. population, rising consumer incomes, and more open trade agreements induce lower cost foreign producers to supply the large U.S. market. Alberto Jerardo (202) 694-5266, 76 kb.

Commodity Spotlight

• U.S. Cotton & the Appreciation of the Dollar — The dollar's strength has exacerbated the difficulties facing the U.S. textile industry during the recent slowdown in U.S. and world economic growth. It has also been a factor in lowering cotton prices. Unlike textiles, cotton production in the U.S. accounts for about the same proportion of world production as in 1995, and its share of world trade has surged. However, the dollar-denominated world price of cotton fell by an inflation-adjusted 56 percent between marketing year 1990 and February 2002. Stephen MacDonald (202) 694-5305, 121 kb.

• Imports & Lackluster Demand Pressure Catfish Prices —In the last 2 years, catfish imports have increased dramatically, in contrast to the 1990s when U.S. catfish production was a domestically focused industry. This rise in imports, combined with relatively flat per capita seafood consumption and increased inventories of catfish products, has put downward pressure on domestic catfish prices. Nevertheless, producers whose feeds are primarily grain-based should be able to take advantage of expected relatively low grain prices. David Harvey (202) 694-5177, 132 kb.

World Agriculture & Trade

• Calculating Damages in WTO Trade Disputes—Since its inception in 1995, the World Trade Organization (WTO) dispute settlement system has received over 200 notifications of trade disputes. While most have been settled, in only three cases has the Dispute Settlement Board (DSB) had to approve damage awards. The system is designed to encourage the parties to settle disputes bilaterally. These three cases suggest the DSB measures damages simply and transparently and in a way that minimizes incentives for member countries to violate agreements. Jason Bernstein (202) 694-5165, 62 kb.

• WTO Accession Will Increase China's Agricultural Imports—China's accession to the WTO is expected to lead to a wealthier and more stable international food system. Under terms of accession, China's agricultural trade regime will be more open and responsive to international markets. WTO accession is part of a process of liberalization of China's economy that will also benefit U.S. agricultural exports. A modest increase in China's imports of key bulk commodities in the next few years should result from accession, but most benefits to U.S. farmers will occur several years down the road. Bryan Lohmar (202) 694-5226, 144 kb.

• Proposed Requirements for Manure Nutrient Management: Potential Sector Impacts— When manure from animal feeding operations (AFOs) exceeds land application needs for crop production, the runoff can enter waterways and impair water quality. The U.S. Environmental Protection Agency has proposed bringing additional AFOs under regulation and requiring implementation of nutrient management plans (NMPs) by all regulated AFOs, with a decision expected by December 2002. USDA's Economic Research Service estimated the potential national/regional impacts of the proposed NMPs on all regulated AFOs. Jonathan Kaplan (202) 694-5494, 102 kb.

• Livestock Operations Face Greater Restriction—Take an AFO, concentrate it to make a CAFO, mix in some NPDES and TMDL, and the result is a brew that more livestock and poultry producers may have to imbibe in the near future. Proposed regulatory changes define the terms and expand the nutrient management requirements for large animal feeding operations. Marc Ribaudo (202) 694-5488, 47 kb.

• Farm Families' Savings: Findings from the ARMS Survey—Savings play a role in helping to maintain farm households' standard of living as well as complementing other risk management strategies. If farmers save during 'good times,' there might be less perceived need for large government outlays for disaster assistance and other unearned compensation to decrease income variability. Using data from the Agricultural Resources Management Study survey, USDA's Economic Research Service examined the influence of a range of factors on the types and level of farm household saving. Ashok Mishra (202) 694-5580, 61 kb.

Access Agricultural Outlook Forum Speeches and Presentations, 84 kb.

Statistical Indicators, 179 kb.

Entire issue, 937 kb.

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Updated date: April 2002