Publications

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  • Ethanol Expansion in the United States: How Will the Agricultural Sector Adjust?

    FDS-07D-01, May 18, 2007

    A large expansion in ethanol production is underway in the United States. Cellulosic sources of feedstocks for ethanol production hold some promise for the future, but the primary feedstock in the United States currently is corn. Market adjustments to this increased demand extend well beyond the corn sector to supply and demand for other crops, such as soybeans and cotton, as well as to U.S. livestock industries. USDA's long-term projections, augmented by farmers' planting intentions for 2007, are used to illustrate anticipated changes in the agricultural sector.

  • NAFTA at 13: Implementation Nears Completion

    WRS-0701, March 29, 2007

    Implementation of the North American Free Trade Agreement (NAFTA) is drawing to a close. In 2008, the last of NAFTA's transitional restrictions governing U.S.-Mexico and Canada-Mexico agricultural trade will be removed, concluding a 14-year project in which the member countries systematically dismantled numerous barriers to regional agricultural trade. During the implementation period, the agricultural sectors of Canada, Mexico, and the United States have become much more integrated. Agricultural trade within the free-trade area has grown dramatically, and Canadian and Mexican industries that rely on U.S. agricultural inputs have expanded. U.S. feedstuffs have facilitated a marked increase in Mexican meat production and consumption, and the importance of Canadian and Mexican produce to U.S. fruit and vegetable consumption is growing.

  • USDA Agricultural Projections to 2016

    OCE-2007-1, February 14, 2007

    This report provides longrun (10-year) projections for the agricultural sector through 2016. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.

  • The Impact of Big-Box Stores on Retail Food Prices and the Consumer Price Index

    ERR-33, December 29, 2006

    This report focuses on retail food market dynamics and how they affect food price variation across store formats. The differences in prices across store formats are especially noteworthy when compared with standard measures of food price inflation over time. Over the past 20 years, annual food price changes, as measured by the CPI, have averaged just 3 percent per year, while food prices for similar products can vary by more than 10 percent across store formats at any one point in time. Since the current CPI for food does not fully take into account the lower price option of nontraditional retailers, a gap exists between price changes as measured using scanner data versus the CPI estimate, even for the relatively low food inflation period of 1998-2003. This study estimates that the CPI for dairy products overstates food price change by 0.5 to 2.5 percentage points per year for dairy, eggs, and butter/margarine.

  • Possible Implications for U.S. Agriculture From Adoption of Select Dietary Guidelines

    ERR-31, November 20, 2006

    To help Americans meet nutritional requirements while staying within caloric recommendations, the 2005 Dietary Guidelines for Americans encourage consumption of fruits, vegetables, whole-grain products, and fat-free or low-fat milk or milk products. This report provides one view of the potential implications for U.S. agriculture if Americans changed their current consumption patterns to meet some of those guidelines. For Americans to meet the fruit, vegetable, and whole-grain recommendations, domestic crop acreage would need to increase by an estimated 7.4 million harvested acres, or 1.7 percent of total U.S. cropland in 2002. To meet the dairy guidelines, consumption of milk and milk products would have to increase by 66 percent; an increase of that magnitude would likely require an increase in the number of dairy cows as well as increased feed grains and, possibly, increased acreage devoted to dairy production.

  • U.S. Dairy at a Global Crossroads

    ERR-28, November 14, 2006

    Current dynamics in world dairy markets and the potential for global and domestic trade policy reform are bringing the U.S. dairy sector to a new crossroads as it faces competitive forces from outside its borders. Those forces-demand for new products by consumers in industrialized countries, changes in technology, rapid economic growth in emerging developing countries, particularly in Asia, and the increasing role of multinational firms in domestic and global dairy markets-are leading to increased dairy consumption, more opportunities for dairy product trade, and foreign direct investment benefiting both U.S. consumers and producers. As global demand for milk and new dairy products expands, the roles of policies that support prices are diminishing, while the roles of flexibility and innovation aimed at improving competitiveness are growing.

  • Animal Products Markets in 2005 and Forecasts for 2006

    LDPM-14601, September 08, 2006

    Uncertainty continues to shape the forecasts for animal products markets in 2006. Potential and actual animal disease outbreaks, consumer sensitivities, volatile exchange rates, and growing competition from producers in other countries cloud U.S. trade prospects for major meats. Loss of U.S. trade market share, partly caused by disease outbreaks and related trade restrictions that have affected animal product exports since 2003, compounds the problem. The outlook for U.S. meat, poultry, and dairy markets in 2006 depends on how well domestic production adjusts to changes in input costs, the effect of exchange rates on trade, the continuing effects of disease and trade restrictions on exports, and the increasing competitiveness of emerging animal products exporters.

  • Dairy Backgrounder

    LDPM-14501, July 24, 2006

    Over time, shifts in consumer demands, in the location and structure of milk production, in industry concentration, in international markets, and in trade agreements have dramatically altered the U.S. dairy industry and changed the context for dairy policies and the sector as a whole. In the future, the U.S. dairy industry is likely to become more fully integrated with international markets. At the same time, dairy products such as fluid milk, butter, and cheese are likely to continue to be increasingly used as ingredients for restaurants and in processed foods while still being sold in their traditional forms.

  • Trade Liberalization in International Dairy Markets: Estimated Impacts

    ERR-16, February 22, 2006

    This report examines issues related to modeling complex policy regimes that affect international dairy markets using a partial equilibrium, multiple-commodity, multiregion model of agricultural policy and trade. Average bound tariffs for dairy remain among the highest of all agricultural commodities and dairy trade is characterized by a large number of megatariffs and tariff-rate quotas (TRQs). In addition to tariffs and TRQs, countries have used milk production quotas to control milk production. Modeling results indicate that liberalization would reduce world dairy product supplies and increase the value of dairy trade.

  • Effect of Food Industry Mergers and Acquisitions on Employment and Wages

    ERR-13, December 09, 2005

    Empirical analysis of mergers and acquisitions in eight important food industries suggests that workers in acquired plants realized modest increases in employment and wages relative to other workers. Results also show that mergers and acquisitions reduced the likelihood of plant closures while high relative labor costs encouraged plant shutdowns. These results differ from commonly held views that mergers and acquisitions lead to fewer jobs, wage cuts, and plant shutdowns.

  • U.S. Dairy at a New Crossroads in a Global Setting

    Amber Waves, November 01, 2005

    This Amber Waves articles addresses how global dairy markets have changed and asks the question whether dairy policies stand in the way of the industry taking advantage of new market opportunities.

  • Dairy Policies in Japan

    LDPM-134-01, August 24, 2005

    This report provides a detailed description and analysis of Japan's policies that support its milk producers and regulate dairy markets. Domestic supply controls boost the milk price, and government subsidies for producing manufacturing milk, for environmental improvements, and for hazard insurance provide additional support to farms. Regulations about milk labeling have affected milk powder use. At the border, tariff-rate quotas offer limited opportunities to private firms within the quota amounts, and impose very high tariffs on imports of dairy products outside the quota. If Japan's policies were liberalized, prices and production in Japan would fall, but sizable milk production would remain.

  • Disease-Related Trade Restrictions Shaped Animal Product Markets in 2004 and Stamp Imprints on 2005 Forecasts

    LDPM-133-01, August 03, 2005

    Disease outbreaks and related trade restrictions that affected U.S. animal product markets and exports in 2003 continued to constrain markets in 2004. U.S. cattle and beef markets were most affected. Pork, dairy, and lamb markets did not face any direct disease issues but both U.S. and international outbreaks of Avian Influenza buffeted poultry markets. Forecasts of 2005 U.S. animal-products trade reflect expected market responses given the uncertainties surrounding cattle and beef markets in the United States.

  • Market Integration of the North American Animal Products Complex

    LDPM-13101, May 26, 2005

    The beef, pork, and poultry industries of Mexico, Canada, and the United States have tended to become more economically integrated over the past two decades. Sanitary barriers, which are designed to protect people and animals from diseases, are some of the most significant barriers to fuller integration of meat and animal markets. In addition, diseases such as Bovine Spongiform Encephalopathy (BSE), also known as mad cow disease, have caused major disruptions to beef and cattle trade.

  • On the Map: Milk Production Shifts West

    Amber Waves, September 01, 2004

    Since 1980, milk production in the U.S. has increased almost 33 per- cent, and regional production growth has been most pronounced in the Pacific and Mountain West

  • The Changing Landscape of U.S. Milk Production

    SB-978, June 01, 2004

    The U.S. dairy industry underwent dramatic restructuring during the last 50 or so years. Key structural features of the dairy industry are the quantity of milk produced and the location, number, size, and organization of dairy farms. The questions of where, how much, and by whom milk is produced are important from both a national and a regional perspective. The structure of milk production defines the potential direction of the industry. Dairy farms continue to grow, become more concentrated in certain regions, and become more specialized in producing milk. However, small traditional dairy operations remain scattered around the country.

  • Effects of U.S. Dairy Policies on Markets for Milk and Dairy Products

    TB-1910, March 04, 2004

    This report examines the economic effects of the principal programs authorized under the Farm Security and Rural Investment Act of 2002 that influence the U.S. dairy sector. The analytical results presented in this study were used as input to a broader study mandated by Congress, which required an evaluation of the economic impacts of Federal milk marketing orders, direct payments to producers, price supports, and export programs.

  • Characteristics and Production Costs of U.S. Dairy Operations

    SB-974-6, February 25, 2004

    Total costs of producing milk in 2000 ranged from an average of $11.58 per hundredweight (cwt) of milk sold in the Fruitful Rim-West region to $18.23 per cwt in the Eastern Uplands. Milk producers in the West had a significant cost advantage over producers in other regions in 2000 because their operations were much larger. Operations with 500 or more milk cows had significantly lower total operating and ownership costs, indicative of the economies of size experienced by larger operations. Also, differences in animal performance, feed efficiency, and labor efficiency were critical in determining whether producers were in the low- or high-cost group for producing milk. These findings were based on the 2000 Agricultural Resource Management Survey (ARMS), the most recent national survey of milk producers.

  • World Events Frame Outlook for Livestock, Dairy, and Poultry

    LDPM-9601, June 25, 2002

    This report examines changes in the livestock, dairy, and poultry industry in 2001 and provides initial assessments of 2002 based on forecasts from the June 2002 World Agricultural Supply and Demand Estimates. In 2001, U.S. red meat and poultry production stabilized as lower beef production was partially offset by higher pork and poultry production. In 2002, slightly larger projected growth in meat production (2 percent) and lower exports are expected to result in lower wholesale prices for cattle, hogs, and poultry. Recovery in milk per cow is expected to override declining milk cow numbers and boost 2002 milk production by 2 to 3 percent.

  • Livestock, Dairy, and Poultry Outlook: 2000 in Review and 2001 Outlook

    LDPM-8701, October 03, 2001

    This report examines changes in the livestock industry in 2000 and provides initial assessments of 2001 based on forecasts from the August 2001 World Agricultural Supply and Demand Estimates. Strong economic growth in the United States in 2000 boosted the demand for high quality cuts of red meats, thereby increasing wholesale prices of beef, pork and lamb. However, broiler and farm milk prices declined compared with 1999. Poultry output remained strong in 2000 as exports increased by 9 percent. Extreme weather conditions may dampen beef production in 2001. U.S. pork exports should increase by 18 percent in 2001.