NOTE: AO has 10 issues in 2000.  Please note that reports are released in one
month, BUT THE ISSUE DATE IS FOR THE FOLLOWING MONTH; e.g., the May 2000 issue 
is released in April.


AGRICULTURAL OUTLOOK -- SUMMARY                        February 22, 2000
March 2000, ERS-AO-269
     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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China's WTO Accession Would Boost U.S. Ag Exports & Farm Income

China's participation in the World Trade Organization would result in
significant gains in U.S. agricultural exports and farm income, based on
recently completed analysis by USDA's Economic Research Service.  U.S. exports
of grains, oilseeds and related products, and cotton would be $1.6 billion
above projected baseline levels in 2005.  Additional gains would result from
significantly greater market access for other products, such as poultry, pork,
beef, citrus, other fruits, vegetables, tree nuts, and forest and fish
products.  U.S. net farm income would be $1.7 billion higher than baseline
projections in 2005.  Hunter Colby (202) 694-5215; whcolby@ers.usda.gov

Railroads' Urge to Merge
A proposed railroad merger between Burlington Northern Santa Fe and Canadian
National would create North America=s largest railroad, stretching 50,000
miles from Nova Scotia to Los Angeles, and from the Gulf of Mexico to British
Columbia. The proposed merger, announced in December 1999, is primarily an
"end-to-end" combination, which is less likely than a parallel combination to
weaken competition.  The two firms will seek approval from the U.S. and
Canadian governments over the next year, asserting benefits stemming from
their ability to avoid intercompany interchange of freight cars--with the
delays that result and replace them with more efficient intracompany transfer
of cars at interchange points. For agriculture, the implications of the merger
include its potential to affect the relative trade advantages of U.S. and
Canadian producers.  Keith Klindworth, Agricultural Marketing Service (202)
720-4211; Keith.Klindworth@usda.gov

World Meat Trade: The Shape of Things to Come

Forces driving the growth in world meat trade since the mid-1980's are still
at work in shaping trade patterns.  Since 1985, global meat trade has advanced
because of significant reductions in trade barriers, notably the relaxation of
barriers by Japan and South Korea, regional trade agreements among the
countries of North America (NAFTA) and South America (MERCOSUR), and the
opening of new markets for poultry in Russia and China. 

Diversity among trade partners in preferences for particular meat products is
also a factor that can enhance trade.  U.S. consumers, for example, favor
chicken breasts over dark meat, while in China and Mexico, dark meat is more
valued.  Further relaxation of trade barriers and progress in controlling
animal diseases will allow expansion of intra-industry trade--with countries
importing and exporting different cuts of meat from the same animal species--
and will allow countries to exploit relative cost advantages.  John Dyck (202)
694-5221; jdyck@ers.usda.gov

Hog Producers Look to Higher Returns 

U.S. hog producers are benefiting from the combination of a declining hog
inventory that is reducing pork production and raising prices, and a booming
economy that is fueling demand for meat products.  Hog prices rallied in the
last half of 1999, while feed costs remained relatively low, boosting
producers' returns. Breeding herd reductions continuing since late 1998 ensure
higher hog prices, lower pork production in 2000, and a rise in producers'
returns if feed costs continue low.  Retail prices are expected up 4-6 percent
in 2000 after declining for 2 years.  Leland Southard (202) 694-5187;
southard@ers.usda.gov

200 Years of U.S. Farm Policy

Since the founding of the national government, farmers have been supported by
a series of markedly different policy approaches.  In general, Federal farm
policies have been rooted in attempts to ensure opportunities for individuals
and families to make a living at farming.  In the earliest period, Federal
land policy offered the opportunity to become a farmer with minimal
investment.  Succeeding periods brought new policy approaches intended to help
farmers improve their incomes in the face of burgeoning production and
fluctuating prices.  Current challenges facing farm policymakers--e.g.,
continuing structural change, complexities of global trade, and new
environmental goals--will require creativity in crafting farm policy for the
future.  Anne B. W. Effland  (202) 694-5319; aeffland@ers.usda.gov

Premium Discounts Boost Crop & Revenue Insurance Coverage

Sparked by $400 million in premium discounts for "buy-up" coverage as part of
emergency assistance legislation, farmers' participation in crop insurance
increased in 1999.  Total insured acres reached 196 million, up about 8
percent from 1998, and acres insured at buy-up levels--coverage above minimum
catastrophic coverage (CAT)--increased by 19 percent.  The discounts--
applicable to any federally supported crop yield or revenue insurance plan--
dropped producers' after-subsidy premium costs for buy-up coverage about 30
percent, on average, across all buy-up levels.  Higher levels of buy-up
participation are expected to continue in 2000, with Federal agriculture
appropriations for FY2000 providing funds for premium discounts.  Robert
Dismukes (202) 694-5294; dismukes@ers.udsa.gov

Cutbacks Ahead for Processing Tomato Acreage 

The record-high 1999 processing tomato harvest prompted processors to sharply
increase domestic stocks of tomato-based products--up 37 percent in December
1999 from a year earlier--and will likely lead to a cutback in contract
tonnage and output in 2000.  Early estimates indicate a possible decline of
10-20 percent in planted acreage from a year ago, and early contract prices
are about 9 percent below last year's average.  Charles Plummer (202) 694-
5256; cplummer@ers.usda.gov

Approved by the World Agricultural Outlook Board
Printed copies of Agricultural Outlook will be available in about 2 weeks.
Full text available electronically February 23.

END_OF_FILE
