Share this story
Close X
Switch to Desktop Site

Good word for farmers is that exports may perk up in '84

America's amber waves of grain may yield more ''green'' from overseas next year. Right now, United States farm exports have slid to their lowest point since 1979. But recent political and economic developments, analysts say, should help spur an agricultural export rebound in 1984.

''The decline in the value of US farm exports probably will bottom out in 1983, and improvement is likely in 1984,'' predicts an Agriculture Department export report released Tuesday.

About these ads

Such an event would give a strong boost to the whole economy. Wheat, corn, beef, and other foodstuffs are to the US what autos are to Japan: crucial exports. In 1981, for instance, capping a dozen years of steadily increasing sales, farm products accounted for 19 percent of all US goods sold overseas.

And farmers depend on exports for much of their income. This year, almost 60 percent of the US wheat crop will be sold to foreign nations, notes Bruce Balanton, a researcher with the American Farm Bureau Federation. Half of the corn crop, and 40 percent of the soybean crop, will also be exported, he says.

But even agriculture, one of the shining lights of US foreign trade, has been battered by the worldwide recession. Demand from overseas has dropped, particularly in the third world, and the strong dollar has made American food (and all other US exports) comparatively expensive.

''The dollar is so high we're the last, most expensive supplier'' for almost every crop, complains Donald Ratajczak, an economist at Georgia State University.

The Agriculture Department predicts that agricultural exports in fiscal 1983 will total $34.5 billion - a 12 percent decline from last year, and the lowest level since 1979.

But the department is more sanguine about next year's prospects, predicting that farm exports would rise - though it didn't say by how much.

The report cites as positive political developments the recent US-Soviet grain agreement and the signing of a US-China textile trade pact.

About these ads

The grain deal, announced July 28, commits the USSR to increasing US grain purchases by 50 percent from current levels, to 9 million metric tons of grain a year. Farm groups hope the agreement will halt the slide in the US share of the Soviet grain market. Before the grain embargo of 1979, 70 percent of USSR grain imports came from America. This year the figure will be only 18 percent, as Canada, Europe, and Argentina have sliced off large chunks of the Soviet trade.

The signing of the textile agreement solves a nasty dispute that was cutting into US-China trade. China, miffed at US attempts to limit imports of Chinese cloth, had been boycotting US farm goods this year. Farm groups estimate the boycott cost US farmers sales of 4 million metric tons of wheat.

Rich Pottorff, manager of the agricultural forecasting service of Data Resources Inc. (DRI), predicts that the value of US farm exports will go up 10 to 15 percent next year.

But the hike will mostly come from rising prices caused by drought and decreased planting, says Mr. Pottorff - not from increased sales. The volume of US farm exports will only go up 3 to 4 percent, he predicts.

Sure, the Soviets have just agreed to a long-term grain deal, says Pottorff - but their own grain crop is the best since 1978.

And what will keep US farmers from selling more corn, wheat, and meat is the chain that's restraining all US exports, says the DRI economist: the strong dollar.

In recent days the price of the dollar against foreign currencies has dropped somewhat, reflecting the belief of money traders around the world that US interest rates have stopped rising.

But if US exports, farm and otherwise, are to become more price competitive in world markets, the dollar must fall much more.

''I just don't see the value of the dollar getting better,'' Pottorff sighs.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.