March 11, 1999
Just about every segment of the U.S. economy is setting records or near-records for strong performance -- with the exception of the agricultural sector. Last year, farm prices plunged to some of the lowest levels this decade, and experts don't expect 1999 will be much better.
- The Agriculture Department expects net farm income of $44.6 billion in 1999 -- down 7 percent from last year.
- Farm exports are expected to fall 9 percent and -- with global stores of corn, soybeans and wheat swollen from three years of good harvests worldwide -- the prospects for higher grain prices are dim.
- Livestock prices are well below the most efficient producers' break-even price, agricultural economists report.
- Fourth-quarter sales of major farm equipment in North America were down an astonishing 33.4 percent from the prior year.
Some analysts are predicting a mass exodus of farmers by next year, if prices stay where they are now. Inevitably, such conditions are leading to calls for more federal agricultural assistance -- on top of the $6 billion in emergency aid Congress passed just before last year's elections.
One positive note is that farmers are carrying lower debt burdens now than they did in the mid-1980s farm depression. Also, energy costs have gone down considerably.
Source: Andrew Osterland, "Big Harvests, Bigger Blues," Business Week, March 15, 1999.
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