The farm slump eases

Another big package of government financial aid cushioned the farm slump in 2000 but did little to lift agriculture's spirit. Overall, the industry's major financial indicators stayed remarkably healthy. Farmers delivered more red meat and poultry to supermarkets than ever before, and strong consumer demand in the robust U.S. economy boosted livestock prices and profits. But another big crop swamped still sluggish global markets, and weak crop prices held down farm incomes. In the end, help from Washington propped up the industry's financial indicators for the third consecutive year.> Barkema and Novack report that some signs of improvement in the industry have emerged, but, as in the year just past, the outlook for 2001 hinges on the weather and Washington. Global food consumption has caught up with agriculture's recent production surge, tightening world grain supplies and brightening prospects for farm exports. Nevertheless, normal weather and another big crop are likely to keep U.S. granaries full and crop prices low. Livestock producers could have another good year, but weak crop prices could hold down farm income. As in the past three years, agriculture's prospects in 2001 may rest on financial assistance from Washington.