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October 2016, Volume 22, Number 4

US Ag: Sales, Trade

US farm sales were $375 billion in 2015, including $190 billion worth of crops and $185 billion worth of animal products. Farm sales included $30 billion worth of fruits and nuts, $19 billion of vegetables and melons, and $27 billion of other horticultural crops, including nursery crops, mushrooms and other minor crops. Total FVH sales were $76 billion, 40 percent of crop sales and 20 percent of total farm sales.

US farm sales were $320 billion in 2010, including $180 billion worth of crops and $140 billion worth of animal products. FVH sales totaled $65 billion, or 36 percent of crop sales and 20 percent of farm sales.

Farmers are expecting record crops of corn (15.2 billion bushels) and soybeans (4.1 billion bushels) in 2016; corn yields average 175 bushels an acre and soybeans 49 bushels per acre. US wheat production is expected to be 2.3 billion bushels or 53 bushels per acre. Cotton production is expected to be 16 million 480-pound bales, or 800 pounds an acre.

Cheap feed plus increasing milk production overseas pushed the farm price of milk down to $1.25 a gallon and contributed to a surplus of cheese, some of which is frozen in the hope that prices will rebound. Net farm income is expected to drop to $72 billion in 2016, down from $81 billion in 2015, and low crop prices are reducing the value of farmland. Among those most adversely affected are the 43,000 US dairies.

USDA publishes yearbooks on fruits and vegetables that include total and utilized production. For example, the total production of apples in 2014 was a record 11.4 billion pounds, but only 11.2 billion pounds were utilized for fresh or processing purposes (Americans consume about 46 pounds of apples a year, 41 percent as fresh apples). Similarly, sweet cherry production was 364,000 short tons in 2014, when 359,000 tons were utilized.

Trade. Growth in global trade is slowing. Between 1985 and 2007, growth in trade grew at twice the rate of economic growth. Today, the growth in trade matches economic growth, largely due to countries implementing restrictive trade rules.

The Trans-Pacific Partnership (TPP) would reduce barriers to trade among 12 Pacific Ocean countries that account for 40 percent of world trade. US GDP was $18 trillion in 2016, and TPP would increase US GDP by $43 billion by 2030, under one percent.

Such limited benefits combined with job losses in US manufacturing have turned both Democrats and Republicans against the TPP and other free-trade agreements. Economists acknowledge that NAFTA increased illegal Mexico-US migration, while China's entry into the WTO promoted investment in Chinese manufacturing. Mexico gained jobs, especially in autos, and China gained jobs in many manufacturing sectors.

The US government did not redistribute the gains from freer trade from winners to losers. Many US workers who lost factory jobs wound up in services that paid half as much as they earned previously.

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