89 



9 

 incomes actually slipped below expenses and their debt-asset 

 ratios exceeded 40 percent. Using this measure, recent estimates 

 show less than 5 percent of farms are now vulnerable, half the 

 level of the mid-1980's. 

 The Outlook for Food Supplies and Prices 



Agriculture's large supplies and stable prices for basic 

 commodities helped to moderate increases in food prices and the 

 overall cost of living over the last 2 years. Moveover, the 

 smaller increases in food prices have also worked to slow growth 

 in the cost of USDA's food assistance programs. Food prices rose 

 roughly 6 percent in both 1989 and 1990, less than 3 percent in 

 1991, and slightly more than 1 percent in 1992. 



Expansion in meat supplies and the resulting weakening in 

 meat prices, mainly pork, were major factors contributing to 

 1992 's unusually small food price increases. Meat production 

 began to expand in the second half of 1991 for the first time 

 since the 1988 drought, bringing forth the record large meat 

 supplies in 1992. Fruit and vegetable prices were also down in 

 1992. 



Food prices are forecast to rise 2-3 percent in 1993. 

 Higher personal incomes and consumer demand will cause some 

 upward pressure on food prices. Ample supplies and stable prices 

 for farm products will partially offset the rising processing and 

 distributing costs. 

 Implications for Food Assistance Programs 



Outlays for domestic food assistance are closely tied to 

 food prices. Each 1-percent increase in food prices translates 



