NOTE: AO has 10 issues in 1999.  Please note that reports are released in 
one month, BUT THE ISSUE DATE IS FOR THE FOLLOWING MONTH; e.g., the May 
1999 issue is released in April.

AGRICULTURAL OUTLOOK -- SUMMARY                        September 20,1999
October 1999, ERS-AO-265
     Approved by the World Agricultural Outlook Board
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This SUMMARY is published by the Economic Research Service, U.S. Department
of Agriculture, Washington, DC 20036-5831.  The complete text of the 
report will be available electronically 2 working days following this summary
release.    
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U.S. Corn Prices To Remain Weak

     U.S. farm prices for corn are expected to remain weak in
1999/2000.  While this year's crop is smaller, supplies are essentially
unchanged because of larger carryin stocks.  Although prices
strengthened when the impact of the drought in the eastern Corn Belt
became clear, abundant supplies in other major U.S. growing regions are
expected to keep the average farm price near the 1998/99 forecast of
$1.95 per bushel.  Domestic use will likely set another record in
1999/2000, while U.S. corn exports decline because of increased
competition from China, continued large exports by Argentina, and
declining world trade.  Allen Baker; albaker@econ.ag.gov

U.S. Ag Exports To Turn Up in Fiscal 2000

     U.S. agricultural exports are forecast to recover modestly in
fiscal year 2000 to $50 billion, the first increase since 1996.  The
gain from 1999--2 percent--is expected to be limited by relatively low
prices.  For bulk exports, the projected increase is 3 percent (volume
is up 5 percent), and for high-value products just over 1 percent.
Propelling the gains are higher global economic growth, especially in
Asia, and reduced export competition for some bulk commodities.  Carol
Whitton (202) 694-5287; cwhitton@econ.ag.gov

Food Price Rises in 1999, 2000 Lowest Since Early 1990's

      Consumers are benefiting from a low general inflation rate, with
food prices forecast to increase only 2 percent in 1999 and 2-2.5
percent in 2000, in part because of large supplies of meats.  Food
price increases have not been so low since the early 1990's--when
prices increased 1.2 percent in 1992 and 2.2 percent in 1993.  Annette
L. Clauson (202) 694-5373; aclauson@econ.ag.gov

Assessing Ag Commodity Price Variability

     Potentially large swings in farm prices and incomes have been a
longstanding farm policy concern.  Better understanding the patterns
and forces behind commodity price variability would help policymakers
facilitate good risk management practices and help farmers manage their
price risks.  Within-year price variability for corn and wheat
futures contracts follows seasonal patterns, and across-year price
variability for wheat, corn, and soybeans is negatively correlated with
the level of stocks relative to total disappearance.  General price
levels for soybeans and most grains may move in tandem with many of the
same forces, but price variabilities are more distinct, due likely to
disparities in their supply and demand responsiveness.  Randy Schnepf
(202) 694-5293; rschnepf@econ.ag.gov

Striking A New Balance In Public-Private Agricultural Research

     The revolution in biotechnology, coupled with strengthened patent
protection for biological inventions, suggests that the traditional
view of agricultural research--a public sector specializing in
relatively basic research and a private sector oriented toward applied
research and technology development--needs revision.  While some
motivations for research are still distinctly public (e.g., improving
nutritional health and enhancing environmental quality), research areas
able to benefit both sectors suggest a need to expand opportunities for
public/private partnerships, such as the cooperative research and
development agreements used by USDA's Agricultural Research Service.
Nicole Ballenger (202) 694-5013; nicole@econ.ag.gov

Examining EU's Agenda 2000

     The European Union's (EU) Agenda 2000, finalized in March, builds
on key agricultural reforms of 1992 by further reducing support prices
for some commodities while partially compensating producers for the
price declines through direct payments.  In general, Agenda 2000 will
make modest changes in the grain, oilseed, dairy, and beef sectors.
For wheat, the reforms will likely move the government purchase price
below a rising world price, enabling EU countries to expand wheat
exports without subsidies.  Most other EU agricultural commodities will
remain uncompetitive in world markets, and will require continued EU
subsidization for export.  The U.S. farm sector will be largely
unaffected, except that wheat will face more competition.  David Kelch
(202) 694-5151; dkelch@econ.ag.gov

Infrastructure Investment in APEC Region
     A particularly troubling impact of the global financial crisis of
1997-98 has been the scaling back of public and private infrastructure
investment in the most financially distressed economies of  the Asian
Pacific Economic Cooperation (APEC) region--Indonesia, Malaysia, the
Philippines, South Korea, and Thailand.  Sizable investments are needed
to maintain and expand infrastructure across APEC to sustain economic
growth and facilitate trade, both within and among those economies and
with the U.S. (over 60 percent of U.S. agricultural exports goes to the
APEC countries).  Infrastructure development reduces marketing costs,
benefiting both producers and consumers.  Lowering these costs could
have as positive an effect on food and agricultural trade as removal or
reduction of a tariff.  William T. Coyle (202) 694-5216;
wcoyle@econ.ag.gov

Approved by the World Agricultural Outlook Board on September 20, 1999.
Printed copies of Agricultural Outlook will be available in about 2
weeks.  For further information, call Dennis Shields (202) 694-5331.
The full text of the magazine will be available electronically on
Tuesday, 9/21 at http://usda.mannlib.cornell.edu/reports/erssor/
economics/ao-bb/.  For details on electronic subscriptions, visit
http://usda.mannlib.cornell.edu/ess_emailinfo.html.

END_OF_FILE
