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2 

 Overviev of the U.S. Agricultural Economy 



The economic situation for U.S. agriculture is predominantly 

 favorable. While it is early in the year, 1993 is expected to 

 bring a continuation of the generally stable markets and firmer 

 returns since 1990. 



Since 1990, supplies of the major crops and livestock have 

 been large enough to meet market demand without unduly depressing 

 producer prices or escalating consumer costs. This is forecast 

 to continue in 1993. Gross cash farm income reached a record 

 $186 billion in 1990 and is expected to achieve about that level 

 in 1993. Farm production expenses will likely rise only 

 slightly, and net cash farm income is expected to continue at the 

 1990-92 level. 



Federal outlays for commodity programs are forecast to 

 increase in fiscal year 1993 to an estimated $17 billion, largely 

 because of lower corn prices due to the record-large 1992 corn 

 crop, low cotton prices, and disaster payments. But this outlay 

 increase should be viewed against a 1990-92 backdrop of sharply 

 lower program outlays which averaged less than $9 billion 

 annually. Farm program outlays are projected to decline nearly 

 $5 billion in fiscal year 1994. 



The current situation for U.S. agriculture is a dramatic 

 improvement over the mid-1980 's when economic stress in 

 agriculture was far greater. The improvement comes from a change 

 in supply and demand fundamentals, increasing farm exports, the 

 successful implementation of the Food Security Act of 1985 and 



