94 



A-2 



Milk production rose about 2 percent during 1991/92 as a 

 decline in cow numbers was offset by an increase in production 

 per cow. Very favorable weather conditions in the Midwest 

 contributed to an unusually large increase in milk production per 

 cow. Even so, milk prices averaged well above year-earlier 

 levels as commercial consumption of dairy products rose slightly 

 faster than milk production. For the 1991/92 marketing year, the 

 all-milk price averaged more than $1.30 per cwt. above the 

 previous year. 



For 1992/93, milk production is expected to increase by 

 about 1 percent as the increase in milk production per cow 

 moderates and cow numbers continue their long-term decline. 

 Commercial disappearance is expected to rise about 2 percent 

 largely reflecting continued growth in cheese consumption. Milk 

 prices, however, are projected to average somewhat lower in 

 1992/93. International prices for nonfat dry milk have declined 

 in recent months, reducing domestic prices for nonfat dry milk. 



Fruit and vegetable supplies are also up but consumer demand 

 is strong and producer returns are generally favorable. 

 Production of several of the major fruits and vegetables rose in 

 1992 and large stocks were carried over into 1993. For major 

 fruit and tree nut crops, the farm value of production increased 

 an estimated 2.5 percent in 1992. Farm receipts from vegetables 

 and melons are estimated slightly lower in 1992 but are expected 

 to increase in 1993 due to higher prices. In 1992, increased 

 fresh vegetable receipts were offset by reduction in the value of 

 processing vegetables and dry edible beans. Receipts for 

 processing tomatoes fell nearly 30 percent in 1992 due to low 

 prices and large stocks. With overall 1993 production expected 

 to meet or exceed the 1992 level, supplies will be large enough 

 to support further gains in per capita consumption. 



Sugar production from domestic beets and cane rose in 1991 

 and 1992 and is forecast to increase further in 1993. 

 Strengthening demand for sugar linked to the slowing of corn 

 syrup's displacement of sugar in the sweeteners market is working 

 to boost consumption. Even so, imports continue to trend down 

 and are approaching the level that will trigger marketing 

 allotments. 



Receipts from tobacco rose to a record $3 billion in 1992 

 due to higher production. But production in 1993 is expected to 

 decline due to reductions in marketing quotas in response to 

 large tobacco stocks. This will likely lead to decreases in 

 receipts. Increased leaf supplies, declining cigarette 

 production, and the substitution of cheaper foreign-grown 

 tobaccos for domestic leaf will continue to put pressure on the 

 market. 



