Publications

Agricultural Outlook

June-July 1998

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

This issue was published in June 1998 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...

LARGE FIELD CROP SUPPLIES TO REDUCE FARM PRICES -- Large U.S. supplies in 1998/99 are projected to reduce season-average farm prices for most field crops from 1997/98, based on USDA's first forecasts of U.S. and world supply and demand. After surging to record highs during 1995 and 1996, grain prices are forecast to return to the levels of the early 1990's, while soybean prices could take a deeper plunge. The slump also reflects prospects for weak foreign demand. Although lower prices will promote gains in domestic consumption in 1998/99, export growth will be relatively limited because of larger supplies in some competing countries and weak import demand resulting from the Asian economic crisis.

PORK, BROILER INCREASES TO OFFSET BEEF DECLINE -- First forecasts for 1999 red meat and poultry indicate production will remain large, about unchanged from 1998. Increases in pork and broiler production will likely offset a sharp decline in beef production. Primary market prices for hogs and poultry are expected to be about the same as in 1998, while cattle prices rise. Despite stagnant hog and poultry prices in 1999, producer returns are expected to improve as feed costs decline.

OZONE: NEW POTENTIAL FOR FOOD SAFETY -- Ozone, a form of oxygen commonly associated with either its ability to protect us from the sun's harmful ultraviolet radiation or with smog, recently gained approval for use in the U.S. food processing industry as a disinfectant wash or spray to help rid food of dangerous pathogens (bacteria, parasites, fungi, and viruses). When dispersed into water, ozone can kill bacteria--like E. coli--faster than traditionally used disinfectants, such as chlorine. Most bottled water is treated with ozone, and nearly 200 municipal water treatment plants in the U.S. employ ozone to help cleanse their drinking water. The adoption of ozone technology in food processing depends upon economic competitiveness with existing and emerging technologies that sanitize food, as well as its effectiveness in enhancing food safety.

U.S. RED MEAT & POULTRY IN A GLOBAL SETTING -- U.S. red meat--beef and pork--and poultry meat exports are expected to grow about 2 percent in 1998, compared with the double-digit rates that have prevailed until now in the 1990's. About the same rate of increase in meat exports is forecast for 1999, although production is expected to increase about 3 percent in 1998 and remain about the same in 1999. After generally declining in the 1990's, U.S. meat imports rose 11 percent in 1997 and are expected to rise about 9 percent in 1998 then taper off to about 4-percent growth in 1999. Reduced demand in Asian markets, especially Japan and Korea, will lead to significantly reduced U.S. meat exports to the region this year, but strong demand in Russia and Mexico will help sustain U.S. meat export growth.

WETLANDS: IS "NO NET LOSS" ACHIEVABLE? -- Wetlands have figured prominently in policy debates since the mid-1970's; public benefits that accrue from keeping wetlands in their natural state often run counter to private interests in converting wetlands. "No net loss" of wetlands is a Federal policy goal that emerged in 1989 and that has garnered bipartisan support, reflecting a compromise between those who believe that too few wetlands have been converted and those who believe that too many have been lost. The U.S. appears to be approaching achievement of "no net loss" of wetland acreage in the 1990's. But the goal may not be sustained if economic conditions spur additional wetland conversion, wetland provisions of the Clean Water Act are weakened, the 1985 Farm Act's link between wetland preservation and farm program payments is diminished, or Federal funding for wetland restoration programs is reduced or eliminated.

LIVESTOCK RESTRUCTURING IN CEE/NIS COUNTRIES -- One of the most dramatic adjustments brought on by liberalization of the economies of Central and Eastern Europe (CEE) and the Newly Independent States (NIS) has been the virtual free fall in their livestock sectors. Consumer and producer subsidies for meat were eliminated, producers were exposed to new international competition, consumer demand plummeted, and producers were increasingly squeezed between falling output prices and skyrocketing production costs. The result was a drastic decline in livestock inventories of all kinds. The situation is beginning to change, however, in some of the transition economies, particularly in the CEE countries. In general, the restructuring process is quite far along in Poland and Hungary, but remains incomplete in most of the NIS countries.

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 from Mann Library. The text versions are available immediately after publication clearance.

Contents, 63 kb

In This Issue..., 26 kb

Briefs; 95 kb

Field Crops: Grain & Soybean Prices Forecast Lower in 1998/99 in 1998
Livestock, Dairy, & Poultry: Large U.S. Meat & Poultry Production in 1999
Specialty Crops: Dry Bean Plantings Up for 1998, But Little Change in Potato Acreage; Prices Could Rise for Some Stone Fruits This Summer
Taking Measure of the Dollar's Value: New Exchange Rate Indexes

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