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USDA Farm Outlook Holds Some Promise

posted on February 22, 2002


Hello, I'm Mark Pearson.

There's no one officially in charge to declare an end to the economic recession. But government numbers out this week had some analysts boldly making that call.

For starters, consumer inflation rose a modest two-tenths of a percent last month. For the 12 months ending in January, consumer prices rose just 1.1 percent. In a separate report, the index of leading economic indicators rose six-tenths of a percent in January. Led by gains in new home sales and consumer expectations, it was the fourth straight increase for the index.

The forecast also was generally upbeat for farmers this week, as USDA's chief economist delivered optimistic predictions, especially for corn and beef producers.

 

USDA Farm Outlook Holds Some Promise

Despite continued low grain prices and a persistent global recession, the U.S. farm economy will remain stable in the coming year. That according to USDA Chief Economist Keith Collins.

In remarks this week at USDA's annual outlook forum, Collins said the forecast for the global economy in 2002 is a continuation of the economic slowdown. But he said substantial government farm payments will again push U.S. net farm income to adequate levels.

Demand for corn will be a bright spot, Collins said, with USDA forecasting a 30 percent increase for use in ethanol. He said the ethanol demand, coupled with a slight increase in exports, should lift average U.S. corn prices about 5 percent for the coming crop year.

Keith Collins, USDA Economist: "When all is said and done, I think the 2002-2003 corn market appears to be the strongest of all of our major field crops."

Reductions in cattle production also will boost prices for beef. Collins predicted fed cattle prices at $74 for the current marketing year ... and $78 in 2003.

 


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