U.S. agriculture: review and prospects

An old maxim holds that too much of a good thing can be bad for your health. That maxim pretty well sums up U.S. agriculture's predicament in 1994. The nation's crop producers produced record harvests and livestock producers sent record amounts of meat to the nation's meat counters. The abundance of food, however, brought the industry back to its traditional problem--record supplies bring low prices. Hence, farm income declined in 1994. Fortunately, most farmers and ranchers had healthy balance sheets to cushion the fall.> Drabenstott and Barkema review the farm economy in 1994 and consider the outlook for 1995. The farm economy should stabilize. While crop prices will probably stay low, export markets should lend some support to crop prices as recovering economies in Europe and Asia boost world food demand. Also, relatively low feed prices will brighten livestock prospects, particularly if cattle and hog prices continue to recover from 1994 lows. A new farm bill will be written in 1995 and, while the new bill will have little if any effect on the farm economy in 1995, the major overhaul of farm programs that now seems possible will have a lasting impact in years to come.