AGRICULTURAL OUTLOOK--SUMMARY                        July 21, 1997                 
             Approved by the World Agricultural Outlook Board
============================================================
This SUMMARY is published monthly (except January) by the Economic Research
Service, U.S. Department of Agriculture, Washington, DC 20005-4788.  The
complete text of AGRICULTURAL OUTLOOK (AO-243) will be available 2-3 working
days following release of this summary.
============================================================

SOYBEAN ACREAGE SUGGESTS RECORD CROP

Planted Soybean Acreage Up Sharply in 1997

U.S. soybean acreage planted in 1997 is the largest in 15 years and the third
highest on record, according to USDA's Acreage report released June 30.  The
Acreage report--based on a survey of planted acreage conducted during the
first 2 weeks of June--represents the first estimate of U.S. planted and
harvested field crop acreage.  The estimate for 1997 soybean plantings is 70.9
million acres, 10 percent above last year.  The increase is a reaction to
robust soybean prices, favorable weather at planting, and the 1996 Farm Act
which eliminated most acreage restrictions for farm program participants. 
Farmers are expected to produce a record 2.69 billion bushels.

Corn plantings also increased in 1997, to an estimated 80.2 million acres, up
1 percent from last year and the highest planted corn acreage since 1985. 
Area planted to cotton, sorghum, and small grains was lower, with the
exception of rice, which increased by 9 percent in response to favorable
prices. [Mark Simone (202) 219-0823, e-mail: msimone@econ.ag.gov/]

Seasonal Rise Ahead for Wheat Prices

The average price received by farmers for wheat in 1997/98 is forecast between
$3.10 and $3.70 per bushel, down from $4.35 in 1996/97.  Monthly-average 
wheat prices for 1997/98 are expected to hit seasonal lows from June through
September as U.S. wheat production, spurred by favorable weather in the
central Plains states, is forecast at 2.43 billion bushels, up 7 percent from
1996 and the highest level in 5 years.  In addition, large old-crop supplies
in Canada and Australia are expected to provide stiff export competition
during the U.S. harvest.  However, relatively strong demand--both domestic 
and global--and an expected second-half slowdown in foreign export competition 
are expected to support higher U.S. wheat prices as the season progresses.  
[Ed Allen (202) 219-0831, e-mail:  ewallen@econ.ag.gov/]

A Good Year for U.S. Wine

Booming demand coupled with limited supply has boosted U.S. grape and wine
prices recently, and imports are pouring in to fill supply gaps created by
several years of limited U.S. wine-type grape production.  In addition,
exports have jumped in the last 18 months as improvements in quality and
marketing have increased the competitiveness of U.S. wine in Northern Europe.

In 1997, producer prices for U.S. wine have continued rising despite a
forecast 16-percent increase in California's grape crop.  But U.S. grape
growers are concerned that maturing vineyards in the next several years will
curtail the current boom, as increased production and imports pull down
prices.  In the years ahead, the U.S. wine industry hopes to take advantage of
expanding foreign markets, free of trade barriers.  [John Love (202) 720-5912, 
e-mail: jlove @econ.ag.gov/]


Managing Farm Resources Under New Farm Act

The 1996 Farm Act quickly and dramatically changed the decision-making
environment for farm operators, landowners, and managers.  Early indications
of the act's impact are reflected in a study funded by USDA's Economic
Research Service, which brought together farm operators and managers on eight
regional panels.  Participants reported on changes they had made or might make
in their farm management decisions following implementation of the farm act. 

Panelists' responses disclosed that farm operators and managers have taken
advantage of the elimination of acreage limitations to adjust their crop
mixes.  The value of now-predictable program payments (production flexibility
contract payments) showed up in panelists' reports of higher land prices,
higher rental rates, and changes in the provisions of leasing arrangements. 
Panelists expressed a high level of interest in strategies for marketing and
for managing price risk.  [Lyle P. Schertz, ERS cooperator (540) 636-8919, 
e-mail: lschertz@econ.ag.gov/]

NAFTA: Third-Year Assessment

[Summary of NAFTA article will follow USDA announcement of the findings of
report on third-year assessment of NAFTA.]

Rise in Food Marketing Costs Slower Than Usual

Food marketing costs accounted for 77 cents of every dollar U.S. consumers
spent on food in 1996, down marginally from last year.  Food marketing
includes expenses associated with processing, wholesaling, distributing, and
retailing of foods produced by U.S. farmers.  It is the difference between the
value farmers receive for food commodities and the amount consumers spend on
food.  Food marketing costs rose only about 2 percent in 1996, substantially
below the average annual increase of almost 5 percent during the last decade. 
Higher farm prices and flat consumer expenditures reduced the marketing growth
rate in 1996, with the food industry absorbing much of the farm price
increase.  [Howard Elitzak (202) 219-1254, e-mail: elitzak@econ.ag.gov/]


Printed copies of Agricultural Outlook will be available in about 2 weeks. 
For further information call Randy Schnepf (202) 219-1281, e-mail:  
rschnepf@econ.ag.gov/, Anne Effland (202) 501-8448, e-mail: 
aeffland@econ.ag.gov/, or Joel Greene (202) 219-0649, e-mail:
jlgreene@econ.ag.gov/.  The full text of  the magazine will be available 
electronically in 3 working days; for details, call (202) 219-0515, 
e-mail: service @econ.ag.gov/.


   Table 1.  Key statistical indicators of the food and fiber sector

                                                           1996       
                                             ----------------------------
                                              II       III        IV

  Prices received by farmers (1990-92=100)   113       118       111  
    Livestock & products                      97       104       103  
    Crops                                    133       131       118  

  Prices paid by farmers, (1990-92=100)
    Production items                         115       116        --  
    Commodities & services, interest,        115       115        --  
     taxes, & wages

  Cash receipts ($ bil.) 1/                  205       202        --  
    Livestock ($ bil.)                        90        93        --  
    Crops ($ bil.)                           115       109        --  

  Market basket (1982-84=100)
    Retail cost                              154       157       160  
    Farm value                               109       114       114  
    Spread                                   179       180       184  
    Farm value/retail cost (%)                25        26        25  

  Retail prices (1982-84=100)
    All food                                 152       154       156  
      At home                                153       155       157  
      Away from home                         152       153       155  

  Agricultural exports ($ bil.) 2/          14.3      13.5      16.4  
  Agricultural imports ($ bil.) 2/           8.6       8.2       8.6  

  Commercial production
    Red meat (mil. lb.)                   10,897    10,688    10,694  
    Poultry (mil. lb.)                     8,075     8,162     8,043  
    Eggs (mil. doz.)                       1,563     1,594     1,632  
    Milk (bil. lb.)                         39.6      37.7      38.0  

  Consumption, per capita
    Red meat and poultry (lb.)              51.9      52.5      53.0  

  Corn beginning stock (mil. bu.) 3/     6,105.8   3,799.5   1,717.9  
  Corn use (mil. bu.) 3/                 2,311.2   2,086.7   1,294.8  

  Prices 4/
    Choice steers--Neb. Direct ($/cwt)     60.26     67.13     70.39  
    Barrows & gilts--IA, So. MN ($/cwt)    54.82     57.75     54.75  
    Broilers--12-city (cts./lb.)            61.1      64.2      63.5  
    Eggs--NY gr. A large (cts./doz.)        80.5      85.9      96.7  
    Milk--all at plant ($/cwt)             14.27     15.93     15.30  
                                                                      
  Wheat--KC HRW ordinary ($/bu.)            6.58      5.02      4.75  
  Corn--Chicago ($/bu.)                     4.81      4.11      2.77  
  Soybeans--Chicago ($/bu.)                 7.89      7.97      7.01  
  Cotton--Avg. spot 41-34 (cts./lb.)       82.71     76.08     71.44  



                                            1988      1989      1990  
                                            -----------------------------
  Farm real estate values 5/,6/
    Nominal ($ per acre)                     632       668       683  
    Real (1982 $)                            530       539       528  

  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.

..........................................................continued


................................................continued (new page)


  1996                            1997                    
--------        --------------------------------------------
  Annual         I       II F      III F      IV F  Annual F

     112        --        --        --        --        --  
      99        --        --        --        --        --  
     127        --        --        --        --        --  


      --        --        --        --        --        --  
      --        --        --        --        --        --  


      --        --        --        --        --        --  
      --        --        --        --        --        --  
      --        --        --        --        --        --  


     156       160        --        --        --        --  
     111       107        --        --        --        --  
     180       188        --        --        --        --  
      25        24        --        --        --        --  


     153       157       157       157       158       157  
     154       158       158       158       158       158  
     153       156       156       158       159       157  

    59.8      14.9        --        --        --      56.5  
    32.4       9.1        --        --        --      35.5  


  43,135    10,457    10,669    10,930    10,755    42,811  
  32,289     7,986     8,460     8,530     8,500    33,476  
   6,358     1,587     1,595     1,650     1,680     6,512  
   154.3      38.9      40.4      38.2      38.0     155.5  


   209.2      49.7      52.4      53.0      53.2     208.3  

 1,557.8     425.9   6,903.7   4,494.1   2,494.9     425.9  
 8,522.3   2,819.1   2,411.9   2,003.2   1,580.8   8,815.0  


   65.21     66.40     66.55     64-66     69-73     66-68  
   53.39     51.06     56.50     58-60     54-58     55-56  
    61.2      60.0      59.1     61-63     57-61     59-61  
    88.2      84.9      72.1     78-82     80-86     79-81  
   14.87     13.47     13.00    12.10-    13.15-    12.90-  
                                 12.50     13.85     13.20  
    5.48      4.57      4.49        --        --        --  
    3.87      2.86      2.86        --        --        --  
    7.53      7.74      8.54        --        --        --  
   77.93     70.73     69.81        --        --        --  



    1991      1992      1993      1994      1995      1996  
----------------------------------------------------------  

     703       713       736       782       832       890  
     521       507       511       529       550       574  

END_OF_FILE
