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                 March 19, 2001
April 2001, ERS-AO-280
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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Summary for Agricultural Outlook, April 2001, AGO-280

Farm Prices Up Slightly in Early 2001 
While the general weakness in agricultural markets of the past 
couple of years continues, early signs of recovery are evident. Many 
farm sector indicators continue to remain favorable, including asset 
values and debt levels, due in large part to record government 
payments. Global stocks of major crops are not excessive compared with 
use, farm prices are generally up from a year ago, and reduced 
plantings in 2001 could lead to a further drawdown of stocks.  However, 
the next couple of years are unlikely to see a strong rebound in farm 
prices and market income for major crops, unless global crop production 
drops significantly. In the longer term, continuing improvement in 
global economic growth will lead to stronger U.S. exports, further 
gains in agricultural commodity prices, and rising farm income.

Modest Rise in Food Prices This Year
Consumers can expect modest increases in food prices for the 
fourth year in a row, with the Consumer Price Index (CPI) for all food 
projected up 2 to 2.5 percent in 2001. For food prepared at home, the 
CPI in 2001 is projected to rise 2 to 2.5 percent while food away from 
home is expected up 2.5 to 3 percent. The downward trend in share of 
household disposable personal income spent on food should continue.
Continuing large meat production, lackluster growth in exports, 
and a slowing domestic economy may pressure meat prices downward. A 
combination of reduced winter acreage in first-quarter 2001 and several 
bouts of sub-freezing weather in Florida have reduced supplies of 
fresh-market vegetables and raised produce prices. Annette L. Clauson 
(202) 694-5389; clauson@ers.usda.gov

Commission on 21st Century Production Agriculture: Recommendations
The Commission on 21st Century Production Agriculture, established 
under the 1996 Farm Act, released its report on January 31, 2001, 
concluding that the Federal government should develop policies and 
programs promoting global competitiveness of U.S. agricultural 
products. The Commission recommended specific legislative approaches to 
assure an income safety net for producers, enhance risk management 
options, support conservation and environmentally beneficial practices, 
improve agricultural trade opportunities, revise individual commodity 
policies, and assist small and limited-resource farms.  Edwin Young 
(202) 694-5336; ceyoung@ers.usda.gov

Japan's Changing Agricultural Policies
Japans government is revising its agricultural policies and 
programs to stem the decline in self-sufficiency in food production, 
and to ensure that its farm program expenditures will be exempt from 
reductions required under World Trade Organization rules. In July 1999, 
Japan adopted the Basic Law on Food, Agriculture, and Rural Policy, to 
review postwar agricultural policies and set up a policymaking scheme 
based on four basic principles: securing a stable food supply, 
fulfilling the multiple functions of agriculture (e.g., use of rice 
paddies to control flooding), sustainable development of agriculture, 
and promotion of rural areas. Major initiatives are underway to change 
the structure of farming and to make it more efficient. Japans new 
policy stance explicitly recognizes that food security depends on 
continued imports and available stocks, as well as on maintaining 
domestic production capability. John Dyck (202) 694-5221; 
jdyck@ers.usda.gov

Lettuce:  In and Out of the Bag 
Lettuce has never been more popular in the U.S.  The average 
American consumed 33 pounds of lettuce in 2000--an all-time high. In 
response to growing consumer demand for variety, freshness, and 
convenience, and as a result of technological innovations in packaging 
materials, lettuce shippers now offer their customers everything from 
heads of iceberg to ready-to-eat salads. They have also adopted various 
business strategies to manage buyer demand for greater volume, broader 
product lines, and year-round availability.  Lewrene Glaser (202) 694-
5246; lkglaser@ers.usda.gov

Smart Growth:  Implications for Agriculture in Urban Fringe Areas
Smart growth is a catch-all phrase to describe a number of land 
use policies to influence the pattern and density of new development. 
Smart growth directs development to designated areas (cities and older 
suburbs) through incentives and disincentives, without actually 
prohibiting development outside them or threatening individual property 
rights. Among the strategies that could have important implications for 
local agriculture are the concentration of growth in selected areas 
within specific boundaries and permanent preservation of farmland.
While smart growth policies have implications for farmland outside 
as well as inside designated growth areas, landowners most likely to 
experience the effects are those in close proximity to existing 
population centers or planned growth areas. One of the greatest impacts 
of smart growth policies on local agriculture will be changes in 
farmland values because farm real estate dominates total farm assets. 
Cynthia Nickerson (202) 694-5626; cynthian@ers.usda.gov 

Sheep & Lamb Inventory Continues to Decline
The U.S. sheep industry continues a long-term trend of negative 
growth that has seen the inventory shrink from a 1942 peak of 56 
million head to 6.92 million head on January 1, 2001. This year's 
inventory is 2 percent below the level on January 1, 2000, and 50 
percent below 1975, reflecting decreasing U.S. demand for wool and for 
lamb and mutton, and rising competition from Australia and New Zealand.  
Keithly Jones (202) 694-5172; kjones@ers.usda.gov

Approved by the World Agricultural Outlook Board
Full text of Agricultural Outlook will be available 3/20 at 
http://usda.mannlib.cornell.edu/reports/erssor/economics/ao-bb/2001/

END_OF_FILE
