NOTE: AO has 10 issues in 2001.  Please note that reports are
released in one month, BUT THE ISSUE DATE IS FOR THE FOLLOWING
MONTH; e.g., the May 2001 issue is released in April.

AGRICULTURAL OUTLOOK -- SUMMARY                        July 19, 2001
August 2001, ERS-AO-283
     Approved by the World Agricultural Outlook Board
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This SUMMARY is published by the Economic Research Service, U.S.
Departmentof 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 & Wheat Acreage Declines, While Soybean & Cotton Rise

     Planted area for eight major U.S. field crops (corn, soybeans,
wheat, barley, sorghum, oats, cotton, and rice) is expected to total
249.9 million acres in 2001, an overall decline of nearly 5 million
acres from last year, when prices were higher for most crops at
planting time.  U.S. farmers--responding to planting delays for
corn, relatively high soybean loan rates, and full planting
flexibility under the 1996 Farm Act--planted an estimated record
75.4 million acres of soybeans in 2001.  Higher expected returns and
changes in crop insurance are making cotton more attractive than
competing crops.  For corn, weaker price expectations and rising
input costs may have reduced plantings in 2001 to an estimated 76.1
million acres.  Robert A. Skinner (202) 694-5313;
rskinner@ers.usda.gov

Canada's Subsidized Dairy Exports: The Issue of WTO Compliance

     A World Trade Organization (WTO) compliance panel ruled against
Canada in July in a dispute over the country's subsidized dairy
exports.  The ruling represents the third time since May 1999 that
the WTO, in response to complaints from the U.S. and New Zealand,
has found Canada's dairy export subsidies to be inconsistent with
its WTO commitments.  Under the WTO Agreement on Agriculture,
countries agreed to hold the volume of subsidized exports to
specific levels.  Canada's dairy exports have exceeded those limits. 
Canada has announced its intention to appeal the July decision. 
John Wainio (613) 759-7452; jwainio@ers.usda.gov

U.S. Wheat Supplies To Drop in 2001/02

     Despite a strong domestic market for wheat products, U.S. wheat
harvested area continues to drop, down more than one-third from its
peak in 1981.  Adverse weather is expected to push winter wheat
harvested area in 2001 to its lowest level since 1988.  Sharply
reduced wheat production in 2001, combined with lower carryin stocks
and only slightly higher projected imports, will likely drop total
wheat supplies to a 5-year low for the 2001/02 marketing year.  Low
returns relative to other crops, combined with planting flexibility
provided under current government programs, have led to the
substitution of competing crops for wheat.  The low returns to wheat
are due largely to lackluster export performance.  Gary Vocke (202)
694-5285; gvocke@ers.usda.gov


How Sweet It Is: Fresh Sweet Corn

     Corn-on-the-cob is back.  After more than a decade of nibbling,
Americans enthusiastically embraced fresh-market sweet corn during
the 1990s.  U.S. sweet corn demand has trended higher over the past
decade, due largely to improved quality, consistency, and
marketability.  Consumption reached record highs in the 1990s,
enticed by new sweeter varieties and value-added packaging.  The
strong demand, along with rising production and higher shipping-
point prices, pushed average crop value up to $456 million.  Among
the developments supporting further growth in fresh sweet corn
consumption will be an increase in off-season demand and the general
upward trend in fresh vegetable use.  Gary Lucier (202) 694-5253;
glucier@ers.usda.gov

Development At and Beyond the Urban Fringe: Impacts on Agriculture

     Urbanization and development are affecting the nature of U.S.
agriculture, particularly at the urban fringe.  Development at and
beyond the urban fringe is following two routes: incremental
expansion of urban areas, and scattered large-lot residential
development in rural areas (greater than 1 acre per house).  These
patterns of development are creating conditions in which a variety
of metro farm types coexists, reflecting different adaptations to
urban influence. Farms in metro areas are an increasingly important
segment of U.S. agriculture, making up 33 percent of all farms and
18 percent of farmland.  While low-density, fragmented settlement
patterns can disrupt traditional agricultural landscapes, they do
leave room for some agricultural production to continue.  However,
to adapt to the accompanying rise in land values and the increasing
contact with new residents, metro-area farmers may have to alter
their operations to emphasize higher value products, more intensive
production, and urban marketing savvy. Ralph Heimlich (202) 694-
5504; heimlich@ers.usda.gov

Dissecting the Challenges of Mad Cow & Foot-and-Mouth Disease

     Two animal diseases currently affecting European agriculture--
foot-and-mouth disease (FMD) and bovine spongiform encephalopathy
(BSE)--have made headlines throughout the world.  Simultaneous
occurrence of these diseases in Britain earlier this year caused
confusion and concern among consumers worldwide.  The combined costs
to the country's economy have been shared by agriculture, consumers,
tourism, and trade.  Both diseases affect producers and consumers
through changes in livestock product prices, availability of goods,
and costs of production.  Trade is also affected as governments
restrict imports from infected countries.  Kenneth Mathews, Jr.
(202) 694-5183; kmathews@ers.usda.gov


Approved by the World Agricultural Outlook Board
Full text of Agricultural Outlook will be available 7/20 at
http://usda.mannlib.cornell.edu/reports/erssor/economics/ao-bb/2001/

END_OF_FILE