August 1999
Economics Editor: Dennis A. Shields, dshields@ERS.USDA.gov
This issue was published in August 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 USDA Order Desk. The contents section at the bottom
of this page links to each article in Adobe Acrobat PDF format.
In This Issue...
U.S. WHEAT SUPPLIES REMAIN LARGE IN 1999/2000 -- Large beginning stocks of wheat will offset a forecast decline in U.S. production, leaving U.S. supplies at 3.4 billion bushels in 1999/2000, up slightly from last year and the highest since 1987/88. Although global trade will pick up while world production declines moderately, little if any increase in world prices is expected because major wheat exporters' supplies are large. Mack N. Leath (202) 694-5302; mleath@ERS.USDA.gov
AGRICULTURE & THE EVOLUTION OF TARIFF BARGAINING -- Preparations have already begun for the ninth round of international trade talks, to be launched at the World Trade Organization Ministerial Conference in December. While agriculture had been included in each round, it was not until the Uruguay Round of Multilateral Trade Negotiations (1986-94) that real progress was made in negotiating overall reductions in barriers to agricultural trade. A review of how reductions in tariffs for manufactured goods was accomplished reveals some valuable lessons for future negotiations on agricultural tariffs. John Wainio (613) 759 7452; jwainio@ERS.USDA.gov
KOREA'S AGRICULTURAL IMPORTS RECOVERING FROM FINANCIAL CRISIS -- Beginning in late 1997 and extending into 1998, South Korea experienced a major economic shock—including devaluation of its currency, a decline in the production of goods and services, and temporary inability to obtain credit. Agricultural imports fell by 28 percent in calendar-year 1998. The economy is now rebounding, following strong intervention by the government and the International Monetary Fund, and agricultural imports are rising again. John Dyck (202) 694- 5221; jdyck@ERS.USDA.gov
FACING THE METHYL BROMIDE PHASEOUT -- Public and private research programs are exploring alternatives to methyl bromide, a widely used agricultural pesticide that is being phased out by parties to the Montreal Protocol. In 1992, methyl bromide was classified as a substance that depletes the stratospheric ozone layer. Many U.S. users of methyl bromide are concerned that alternative practices currently available to replace it will be less effective, resulting in financial losses.Craig Osteen (202) 694-5547; costeen@ERS.USDA.gov
REDUCING GREENHOUSE GAS BUILDUP: IMPACTS ON AG-SECTOR RETURNS --
Efforts to reduce U.S. greenhouse gas (GHG) pollution come at a cost to all sectors of the economy, including agriculture. But a program to pay farmers to develop emissions-absorbing "carbon sinks" on agricultural land could add to farm income. Shifting cropland to forest and grasses and using conservation tillage could reduce atmospheric GHG's. Private industry or government could pay farmers to engage in specific cultural practices that would remove GHG's from the air, reducing the need for more costly cuts in GHG emissions. Howard McDowell (202) 694-5485; howardm@ERS.USDA.gov
CROP & REVENUE INSURANCE: BARGAIN RATES BUT STILL A HARD SELL -- Federal crop and revenue insurance subsidies alter the tradeoff between expected income and risk exposure, so operators may attain significant risk reduction at relatively low cost, while actually increasing expected (i.e., longrun) returns. Government outlays for insurance programs pay a portion of producers' premiums on approved policies, and reimburse private insurance carriers for the costs of selling and underwriting policies, adjusting losses, and processing policy data. Yet the rate of participation in insurance programs has remained significantly less than universal. Randy Schnepf (202) 694-5293; rschnepf@ERS.USDA.gov
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Contact: Carrie Ingoglia
Updated: August 2, 1999
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