Agricultural Trade Will Rely on Second Half of 1999 for Improvements
Agricultural Trade Will Rely on Second Half of 1999 for Improvements
With 1999 half over, farmers now turn their focus from planting to weather and market issues.
"With moisture being the most serious short term concern, the market and trade picture for the second half of 1999 is becoming much more important," Craig Infanger, extension agricultural economist for the University of Kentucky College of Agriculture, said.
Where the market is concerned, the outlook for exports to international markets holds part of the key to any turnaround in the economic outlook for U.S. Agriculture. Since 1996, the U.S. has been in the middle of a world of contracting exports and plunging prices. Analysts at the USDA do however see a chance for improvement.
Some reasons for optimism include an emerging consensus that the worst of the Asian Economic crisis is over and the fact that Brazilian economic upheaval has stabilized. Although other areas of the world, such as Russia could always turn toward chaos, the world economy in general has stabilized.
"All of this is good news for farmers," Infanger said. "We may now be able to see international markets slowly improving and providing a better export outlets for major crops."
Corn exports increased six percent over 1998, despite low prices. Export competition from Argentina and China is down and U.S. corn shipments to Latin America are up 40 percent and shipments to Korea are up 80 percent.
Producers still are seriously concerned about the trade outlook for wheat and soybeans. Wheat exports slightly have improved, but soybean trade is dismal as a result of the abundant supplies flooding world markets from Argentina and Brazil.
Burley leaf exports are down 10 to 15 percent, due to economic problems in major importing countries and a general, world-wide oversupply. The outlook is for slow recovery during the next two years, as the market works through big supplies.
"Almost all the bulk commodities, which we move into international markets have faced tough times in the last three years," Infanger said. "Perhaps there is a glimmer of hope about improvements in the second half of 1999."
