Agricultural Economic Report No. (AER-714) 78 pp

April 1995

Feed Grains: Background for 1995 Farm Legislation

Policy issues likely to be considered in 1995 farm legislation are discussed, including planting flexibility, acreage idling under the acreage reduction program and conservation reserve program, and the malting barley assessment, as well as policy options to address these issues. Feed grains are the leading crop grown in the United States. U.S. feed grain production averaged 239 million tons per year in 1990-94. Total disappearance of feed grains is forecast to reach a record 267 million tons in the 1994/95 marketing year: 211 million tons for domestic use and 56 million tons for exports. Much of the expansion during the last two decades came from domestic use. Returns over cash expenses for corn producers during 1991-93 were only two thirds of those during 1988-90 due to rising cash expenses and declining government payments, but are expected to improve considerably in 1994/95 due to record yields. During 1990-93, world trade in coarse grains was sluggish and the U.S. share of world coarse grain trade was relatively low, averaging 52 percent. Slower growth of competitor exports and increased world import demand projected for the next decade, however, suggest that U.S. exports are likely to increase fairly steadily. During 1991-93, direct government payments as a percentage of annual gross income ranged from 12 to 17 percent for corn production.

Keywords: Feed grains, production, domestic use, exports, farm programs, farm costs and returns, world markets, policy issues

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