AGRICULTURAL OUTLOOK--SUMMARY                                  June 20, 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-242) will be available 2-3 working
days following release of this summary.
==============================================================================
Integration of China and Taiwan into the World Trade Organization's (WTO's)
global trading system would significantly expand world trade and GDP,
according to analysis by USDA's Economic Research Service.  Both China and
Taiwan as well as the U.S. would benefit, mainly because the three countries'
resource endowments are complementary in the trade arena.  Both China and
Taiwan have applied for WTO membership.

Because of China's comparative abundance of labor, induction into the WTO
would permit it to further expand production of labor-intensive manufactured
goods, notably textiles and apparel.  China's net agricultural imports would
increase significantly as rising incomes stimulate demand for more varied and
higher quality foods, as labor and other resources shift out of farming to
labor-intensive manufacturing, and as textile production expands.  The U.S.,
with abundant arable land, would expand its food and agricultural exports,
particularly to China.  Nongrain crops (notably cotton) and processed foods
would gain the most.  U.S. exports of capital- and skill
-intensive manufactured goods would also increase.

U.S. Processed Food Trade Advances

U.S. processed food and beverage trade rose to a record $58 billion in 1996 and
is expected to record further gains in 1997.  Exports in 1996 surpassed $30
billion, up 3 percent, even as global food safety concerns slowed export s of
beef in the latter half of the year.  But pork and poultry exports continued 
their strong advances.  A healthy U.S. economy and strong demand for a variety
of food items drove imports to nearly $28 billion in 1996, an 11-percent gain
over 1995. 

Income Levels Affect Global Food Spending

Knowledge of the forces that help determine food spending patterns can improve
predictions of future demand for agricultural commodities and of subsequent
shifts in international trade flows and price levels.  ERS studied 51 countries,
home to 2.5 billion of the world's 5.8 billion people, to compare spending and
consumption patterns and their relationship to income.  Comparisons confirmed
that, as incomes rise, a smaller share of expenditures is devoted to food.  The
study data also confirmed the association of rising incomes with more diverse
diets, increase in caloric intake to a point of satiation, and consumption of
higher value foods such as meats.  

The level of per capita income explained most of the differences in food
spending patterns across  study countries.  However, even within income
groups, food expenditures varied considerably, due to large differences in food
prices, preferences for particular food items, and/or urbanization rates. 
Geographic location and culture also were contributing factors.  Over the next
decade and beyond, economic growth, coupled with high rates of population growth
and urbanization, is expected to fuel demand for food and stimulate diet 
diversification in low- and middle-income countries, creating potential 
opportunities for increased agricultural exports to these countries. 

Cotton Exports Up in 1997/98, but Stocks Building

U.S. cotton exports are projected up slightly at 7.3 million bales, despite a
smaller U.S. crop, as reduced foreign supplies afford the U.S. additional export
opportunities.  Production is expected at 18.5 million 480-pound bales, compared
with 18.9 million in 1996/97.  Cotton stocks, projected at 4 million bales at
the end of the 1996/97 season, are the highest in 4 years and are expected to
increase again by the end of 1997/98 despite higher expected domestic mill use
and exports.

At the beginning of May, USDA suspended import quotas permitted under Step 3 of
the U.S. marketing loan program, ending 80 consecutive weeks of Step 3 quotas. 
During March-December 1996, cotton imports totaled more than 700,000 bales,
compared with 1,000 to 20,000 bales per year during the preceding decade. This
was the result of an unusually high price premium for U.S. cotton combined with
additional import quotas under Step 3.  The 2-year jump in U.S. cotton imports
is expected to cease in 1997/98.   

"Green" Industry Grower Receipts to Surpass $11 Billion

The U.S. leads the world in production and marketing of flowers, cut foliage,
potted plants, bedding plants and other nursery crops, and turfgrass--known
collectively as the "green" industry.  U.S. growers' cash receipts for these
floriculture and environmental, or landscape, products are projected to reach
$11.3 billion in 1997, an increase of 6 percent over last year.  For floral and
potted plants, the value of domestic production has grown only modestly over the
past decade compared with the value of imports, which have risen sharply over
the same period.  Since 1994, the value of imports of these products at port of
entry has increased about $100 million every year, driven primarily by cut
flowers.  

The U.S. ranks 12th in the world for per capita expenditures on indoor
flowers/plants.  However, Americans spend a far greater amount on outdoor
landscaping plants than do their counterparts in Europe or Asia.  Industry
analysts believe U.S. consumers are spending 2-3 times more on outdoor
plants/flowers than consumers in other developed countries.  And U.S. consumers
spend over twice as much as landscaping products than on floriculture items at
retail outlets ($37 billion vs. $16 billion projected for 1997).


Printed copies of Agricultural Outlook will be available in about 2 weeks.  For
further information call Randy Schnepf (202) 219-1281, Anne Effland (202)
501-8448, or Joel Greene (202) 219-0649.  The full text of the magazine will be
available electronically in 4 working days; for details, call (202) 219-0515.

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

                                                           1996               
                                             --------------------------------- 
                                             II       III        IV   Annual F 
  Prices received by farmers (1990-92=100)   113       118       111       112
    Livestock & products                      97       104       103        99
    Crops                                    133       131       118       127

  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       156
    Farm value                               109       114       114       111
    Spread                                   179       180       184       180
    Farm value/retail cost (%)                25        26        25        25

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

  Agricultural exports ($ bil.) 2/          14.3      13.5      16.4      59.8
  Agricultural imports ($ bil.) 2/           8.6       8.2       8.6      32.4

  Commercial production
    Red meat (mil. lb.)                   10,897    10,688    10,694    43,135
    Poultry (mil. lb.)                     8,075     8,162     8,043    32,289
    Eggs (mil. doz.)                       1,563     1,594     1,632     6,358
    Milk (bil. lb.)                         39.6      37.7      38.0     154.3

  Consumption, per capita
    Red meat and poultry (lb.)              51.9      52.5      53.0     209.2

  Corn beginning stock (mil. bu.) 3/     6,105.8   3,799.5   1,717.9   1,557.8
  Corn use (mil. bu.) 3/                 2,311.2   2,086.7   1,294.8   8,522.3

  Prices 4/
    Choice steers--Neb. Direct ($/cwt)     60.26     67.13     70.39     65.21
    Barrows & gilts--IA, So. MN ($/cwt)    54.82     57.75     54.75     53.39
    Broilers--12-city (cts./lb.)            61.1      64.2      63.5      61.2
    Eggs--NY gr. A large (cts./doz.)        80.5      85.9      96.7      88.2
    Milk--all at plant ($/cwt)             14.27     15.80     15.07     14.74
                                                                              
  Wheat--KC HRW ordinary ($/bu.)            6.58      5.02      4.75      5.48
  Corn--Chicago ($/bu.)                     4.81      4.11      2.77      3.87
  Soybeans--Chicago ($/bu.)                 7.89      7.97      7.01      7.53
  Cotton--Avg. spot 41-34 (cts./lb.)       82.71     76.08     71.44     77.93

                                            1988      1989      1990      1991
                                             ---------------------------------
  Farm real estate values 5/,6/
    Nominal ($ per acre)                     632       668       683       703
    Real (1982 $)                            530       539       528       521

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

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       157       157       157       158       157
       158       158       158       158       158
       156       156       158       159       157

      14.9        --        --        --      56.5
       9.1        --        --        --      35.5


    10,457    10,714    10,905    10,755    42,831
     7,945     8,410     8,530     8,500    33,385
     1,587     1,590     1,660     1,680     6,517
      38.9      40.3      38.2      38.0     155.5


      49.6      51.8      52.8      53.1     207.3

     425.9   6,903.7   4,493.8        --     425.9
   2,819.1   2,412.3        --        --   8,820.0


     66.40     66-67     64-68     68-74     66-69
     51.06     56-57     58-60     54-58     55-57
      60.0     59-60     60-64     57-61     59-61
      84.9     72-73     78-82     80-86     79-82
     13.47    12.80-    12.40-    13.70-    13.10-
               13.00     12.90     14.50     13.50
      4.57        --        --        --        --
      2.86        --        --        --        --
      7.74        --        --        --        --
     70.73        --        --        --        --



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

       713       736       782       832       890
       507       511       529       550       574

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