Iowa Public Television


USDA Agricultural Outlook

posted on February 20, 2004

Hello, I'm Mark Pearson.

A barrage of economic reports out this week did little to impress financial markets, though some of the news was fairly upbeat.

Big industry production rebounded in January ... and the index of leading indicators also improved, hinting at a continued recovery for the world's largest economy.

On the flip side, housing starts declined sharply, the inflation rate edged up because of a sharp rise in energy prices, and the federal debt surpassed a record $7 trillion for the first time this week.

Against that backdrop, USDA this week launched its annual outlook forum, during which the agency released its 2004 projections for everything from export sales to harvest.

USDA Agricultural Outlook In the 2004 crop year, corn acreage is expected to increase an estimated 2.2% and yield a record 10.4 billion bushels. Soybean production is anticipated to increase 1% in acreage and projected to yield a record 2.9 billion bushels. And wheat is expected to decline in acres by 2% and have a 9% smaller output than last year.

Keith Collins, Chief Economist USDA: "We are forecasting that the value of crop production in 2004 will be a record high and the value of livestock and poultry production, despite the BSE setback, is expected top exceed $100 billion dollars for the second time in history."

Overall, the total of all agricultural exports are expected to be a near record $59 billion. The number is up $2.5 billion dollars over last year despite the effects of the BSE crisis which dampened earlier projections.

Overseas, crop prices are expected to remain robust and demand is expected to exceed production. Worldwide grain stocks are predicted to be tight and prices should remain strong.

Animal agriculture is poised for a record year as well. Prognostications included a drop in fed cattle prices, steady hog prices, and an increase in both chicken and milk prices.

Even with the overall positive outlook, net cash farm income is expected to drop 11% to $56 billion. The drop is not predicted to adversely impact small and medium operations which gather most of their income from off-farm jobs.

Trade negotiations are underway to open more markets, including getting other countries to reduce trade distorting subsidies.

Secretary of Agriculture Ann Veneman, USDA: "We can not address these topics without discussing overweight and obesity."

Secretary Ann Veneman focused her commentary on the obesity crisis in America and its effect on US agriculture. Consumer food choices are changing and the Secretary said USDA will review the food pyramid, finding ways to encourage healthy eating, and investigate what these changes mean to production agriculture.

Tags: agriculture corn government news USDA