A report from the Commission on 21st Century Production Agriculture finds farmers' debt to assets ratio is about 15%, low by historical standards.  It puts farmers in a strong equity position.  But the instability of export demand is a major source of financial risk to farmers and agribusinesses, the report says.

Land prices had shown a steady increase through 1997 but could level off in response to lower farm income, said the report.  However, the ratio of debt to assets is about 15%, low by historical standards, and "puts farmers in a strong equity position."

The report continues, "While the United States is the world's largest exporter of agricultural products, exporting 142 million metric tons valued at nearly $54 billion for fiscal year 1998, the instability of export demand is a major source of financial risk to farmers and agribusinesses."

A strong dollar relative to the currencies of several large importers, financial turmoil in Asia that reduced imports there, and large global supplies of most commodities contributed to a 6.4% decline in U.S. agricultural exports in fiscal 1998 compared to the previous year.

High value agricultural products now exceed bulk commodities in terms of export value.  However, oilseed and oilseed products are the single largest value component of agricultural exporters, the report notes.  Wheat and rice depend on export markets to take more than 40% of production compared to 36% for soybeans.

The report also notes that agriculture "is challenged to avoid being a source of water pollution from both crop chemicals and livestock waste."

This initial report provides an overview of U.S. agriculture using data from USDA agencies.  A final report to Congress will be issued in January 2001.  It is available on the commission's web site: http://www.agcommission.org.