Weakened economic growth and depreciated currencies in East and Southeast Asia plus Russia contribute to a three-to-four year stretch of weak global agricultural demand and trade, according to USDA.  For Asia, one to three years of negative growth in the crisis countries are followed by a return to "moderately positive economic growth," the report says.

Those factors, plus other international pressures, have combined to weaken the U.S. agricultural outlook in USDA's 10-year baseline projections, either by reducing global demand or increasing foreign supplies.

Lower projected growth for China's grain imports and expanding production potential among trade competitors also contribute to the outlook.

In the initial years of the baseline (which extends to 2008), much of the U.S. agricultural sector is adjusting to the combination of weak demand and large global supplies.  "Agricultural commodity prices are down, the value of U.S. agricultural exports is lower, and net farm income declines," says USDA.

For Russia, incomes are assumed to decline through 2000 with positive economic growth resuming in 2002 followed by moderately higher growth in later years.  Declining incomes combined with the effects of currency devaluation result in sharp reductions in Russian meat imports in the first half of the baseline.

Moderate gains are projected for grain import demand in China.  Ag policies assumed for China now include a greater emphasis on grain self-sufficiency, the report says.  Increased governmental intervention in grain production and trade is anticipated with price supports for rice, wheat and corn encouraging production and import reductions.

Revised livestock data for China indicate that animal inventories, meat production and meat consumption are 20-30% lower than previously expected.  The revisions suggest slower growth in the livestock sector of the next 10 years compared with the previous baseline.  Grain feed use in China now is expected to be lower and is projected to expand more slowly than implied by earlier data.

The report is included in the April issue of USDA's Agricultural Outlook.