AGRICULTURAL OUTLOOK -- SUMMARY                            April 20, 1998
May 1998, AO-251
     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 within 3 working days following this summary 
release.    
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FARMERS SIGNAL RECORD SOYBEAN ACREAGE
 Soybean & Corn Planting Intentions Up... Again
     U.S. farmers intend to plant a record 72 million acres of soybeans in
1998 and the most corn acreage since 1985, while reducing wheat plantings
to the lowest level in 10 years, according to USDA's March 1998 Prospective
Plantings report.  These planting intentions and trend yields suggest large
U.S. soybean and corn crops in 1998, while wheat output will decline.  Both
corn and soybean plantings have increased each year since implementation of
the 1996 Farm Act, which allows farmers more planting flexibility to
respond to market prices.  Intended corn plantings for 1998 are higher in
almost all of the Southeastern and Delta States, as acreage shifts from
cotton.  Most Corn Belt States show a decrease in corn planting intentions
as farmers switch to soybeans despite a drop in soybean prices relative to
corn.  In the 1990's, growth in average soybean yields has outpaced corn,
which increases relative returns to soybeans and encourages the switch. 
Mark Simone (202) 694-5312; msimone@econ.ag.gov 
Squeezing Grain Through the Panama Canal
     Ships passing through the Panama Canal--a critical link between the
Atlantic and Pacific Oceans for U.S. agricultural exports to Asia--would be
scraping bottom if not for restrictions on vessel draft.  Panama has
suffered the driest rainy season in the 83-year history of the country's
canal, with rainfall 35 percent below normal in 1997.  Water levels are now
too low for large vessels to transit the canal fully loaded.  Bulk U.S.
agricultural exports transported through the canal (primarily corn,
soybean, wheat, sorghum, and meals) are now being transported in smaller
volumes, which normally raises shipping costs.  But primarily because of
excess capacity in the global charter vessel market and reduced demand for
shipping, ocean freight rates are below year-earlier levels.  Ken A.
Eriksen (202) 690-1328; Ken_A_Eriksen@usda.gov
 Aquaculture's Place in the Livestock Sector
     Aquaculture is gaining recognition as a segment of the livestock
complex by contributing more to per capita consumption than veal, mutton,
and lamb combined.  In 1997, U.S. production of processed catfish products
was close to 1 pound per capita,  imports of farm-raised shrimp were likely
over 1 pound per capita, and the combination of farm-raised salmon, trout,
tilapia, crawfish, and other aquaculture products added another pound.  
     In 1998, prices for catfish, the largest segment of the U.S.
aquaculture industry, are expected to increase, especially in midyear, as
inventories of food-size fish tighten.  But large supplies of competing
meats, especially pork and chicken, may put downward pressure on prices of
aquaculture products. In addition, Asian seafood exporters should find the
U.S. market more attractive with the devaluation of their currencies versus
the dollar. Dave Harvey (202) 694-5177; djharvey@econ.ag.gov
Status Reports on Minority & Women Farmers & on Small Farms 
     The number of U.S. farms continues to decline, and ownership and
control of production has become increasingly concentrated despite the
continued predominance of family farms.   In 1995, approximately 6 percent
of U.S. farms operated 28 percent of the land in farms, according to USDA
estimates.  About 94 percent of the Nation's farms are small, with gross
sales under $250,000.  Three-fourths are very small, with sales under
$50,000.
     U.S. farms operated by Blacks and by women are generally smaller than
the national average and their sales of farm products are less.  Black,
Asian, and women farmers tend to be older than the average U.S. farm
operator, while American Indian operators, on average, are slightly
younger.  The number of Black-operated farms is declining at a faster rate
than U.S. farms in general, while the number of farms operated by women and
other minorities seems to be stable or increasing.
     The information provided by USDA's Economic Research Service on
economic and demographic characteristics of minority, women, and small farm
operators contributed to the Department's efforts to address the special
needs of these groups.  In response to charges of discrimination in USDA's
program delivery system, the Secretary of Agriculture appointed, over the
last year, a Civil Rights Action Team and a National Commission on Small
Farms.  Both bodies have made recommendations to address the special needs
of minority, women, and small-scale farm operators.  Key recommendations
included modernizing USDA's local program delivery system and targeting
research and program assistance to small farms.  Minority and women
farmers: Anne B. W. Effland (202) 694-5319; aeffland@econ.ag.gov.  Small
farms: Janet Perry (202) 694-5583; jperry@econ.ag.gov
Interest Rates To Continue Stable in 1998, 1999
     Rural and farm borrowers will benefit from increased credit
availability and continued relative interest rate stability in 1998 and
1999.  In the first quarter of 1998, rates for farm non-real estate loans
from commercial banks averaged 9.1 percent, compared with  9.3 percent for
1997 and a 9-percent average during 1990-97.  Some mild upward pressure on
long-term rates is expected in the second half of 1998 and in 1999. 
     Contributing to interest rate stability are declining overall
inflation, declines in Federal deficit spending, and reduced default risk
as borrowers' profitability and balance sheets improve.  Moreover, banks
have enjoyed record profits recently, and increased competition from
nonbank lenders such as finance companies has prompted them to keep loan
rates competitive.  Paul Sundell (202) 694-5333 and Ted Covey (202) 694-5344; psundell@econ.ag.gov; tcovey@econ.ag.gov
Brazil's Ag Sector Benefits From Economic Reform
            Brazil's agricultural sector is expected to benefit over the next
decade from the country's ambitious reforms of the past few years. The
government has made significant progress in restructuring the economy since
launching the stabilization program know as the Real Plan in 1994.  The
economy has since grown by 10 percent in real terms, and the crippling
inflation rates of the early 1990's have been arrested.  
            Brazil is among the world's leading producers of grains, oilseeds,
beef, and poultry and is a major exporter and importer of agricultural
commodities.  The soybean sector is expected to be the greatest beneficiary
of the Real Plan; USDA's 1998 baseline projects robust growth in Brazil's
soybean output and in its exports of soybeans and products through 2007/08. 
While wheat acreage and yields are projected to increase, production will
fall short of domestic demand, and annual imports of wheat are projected to
be close to 7 million tons by 2007.  Corn imports are also projected to
expand.  Brazil is expected to remain a net exporter of meats, with
production and exports of beef and poultry projected to grow steadily over
the baseline period.  John Wainio (202) 694-5286; jwainio@econ.ag.gov


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 in 3 working days; for
details, call (202) 694-5050  

Table 1.  Key Statistical Indicators of the Food and Fiber Sector

                             1997                            1998
                     --------------------       ---------------------------
                     III     IVF   Annual      IF     IIF     IIIF  AnnualF

Prices received by 
 farmers(1990-92=100)  107     106     107       --      --      --      --
   Livestock/products   99      97      99       --      --      --      --
   Crops               115     113     115       --      --      --      --
 
Prices paid by 
 farmers (1990-92=100)
   Production items    116     115     116       --      --      --      --
   Commodities/services, 
    interest, 
    taxes/wages        116     116     116       --      --      --      --
    

Cash receipts($ bil.)1/ 49      61     201       48      42      48     198
   Livestock($ bil.)    23      23      93       23      22      23      91
   Crops($ bil.)        26      38     109       25      20      25     107

Retail prices (1982-84=100)
   All food            158     159     157      160     160     161     161
     At home           158     159     158      160     161     161     161
     Away from home    157     159     157      160     160     161     161

Ag. exports ($ bil.)2/  12.9    16.3   57.4    14.4   12.9    12.5    56.0
Ag. imports ($ bil.)2/   8.7     9.2   35.8     9.4    9.5     9.9    38.0
  
Commercial production
 Red meat (mil.lb.) 10,939  11,167  43,209   11,209  11,149  11,342  44,724 
        
 Poultry (mil. lb.)  8,398   8,383  33,258    8,275   8,690   8,705  34,295
 Eggs (mil. doz.)    1,606   1,667   6,460    1,630   1,640   1,665   6,625
 Milk (bil. lb.)      38.8    38.2   156.6     39.2    40.9    38.8   157.5

Consumption, per capita
 Red meat/
  poultry (lb.)       52.5    53.9   208.6     52.2    54.1    54.3   215.0
 
Corn beg. stock 
 (mil. bu.)3/        4,494   2,497     426      883   7,247    4,937    883
Corn use 
 (mil. bu.)3/        2,001   1,617   8,850    3,004   2,312      --   9,050

Prices 4/
  Choice steers--Neb. 
   Direct ($/cwt)    65.65   66.61   66.32    61.8    63-65   65-69   65-68
  Barrows/gilts--IA, 
   So. MN ($/cwt)    54.45   43.53   51.36    34.75   36-38   39-41   36-38
  Broilers--12-city  
   (cts./lb.)         62.0    54.0    58.8     56.4   57-59   58-62   56-59
  Eggs--NY gr. A large 
   (cts./doz.)        79.7    88.2    81.2     79.0   69-71   72-78   75-79
  Milk--all at 
   plant ($/cwt)     12.70   14.40   13.38   14.63   13.20-  12.55-  13.55-
                                                      13.60   13.25   14.05
Wheat--KC HRW 
 ordinary ($/bu.)     3.76    3.82    4.16     3.62      --      --      --
Corn--Chi. ($/bu.)    2.64    2.74    2.78     2.72      --      --      --
Soybeans--Chi. ($/bu.)7.19    6.95    7.60     6.68      --      --      --
Cotton--Avg. spot 
 41-34 (cts./lb.)    71.40   67.64   69.89     64.48     --      --      --



                  
                      1991    1992    1993     1994    1995    1996    1997
                      -----------------------------------------------------
Farm real estate 
 values 5/,6/
   Nominal ($/acre)    703     713     736      782     832     890     942
   Real (1982 $)       521     507     511      529     550     574     596
 
1/ Quarterly data seasonally adjusted at annual rates.  2/ Annual data
based on Oct.-Sept. fiscal years ending with year indicated.  3/ Sept.-Nov.
first quarter;Dec.-Feb. second quarter; Mar.-May third quarter; Jun.-Aug.
fourth quarter; Sept.-Aug. annual.  Use includes exports & domestic
disappearance.  4/ Simple averages, Jan.-Dec.  5/ 1990-94 values as of
January 1.  1986-89 values as of February 1.  6/ The 1989-94 values are
revised based on the 1992 Census of Agriculture.  F = forecast, -- = not
available.
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