RECORD US FARM EXPORTS PREDICTED

RECORD US FARM EXPORTS PREDICTED

U.S. farm product exports are growing at a rapid pace and are expected to surpass levels they have not seen since the early 1980s.

Economists and trade officials predict agricultural sales will reach $51 billion this year, surpassing the $43.8 billion record set in 1981, just before farm exports crumbled and lost 40 percent in five years.Moreover, they believe that overseas sales aren't nearly as vulnerable to sudden downturns as they were in the early 1980s.

They see a sustainable market outlet for farmers and a consistent source of business for shipping lines, forwarders and others involved in transportation.

For several reasons, farm exports rest on a far more solid foundation today than they did 15 years ago:

* Bulk commodities, such as corn and wheat, whose exports ebb and flow with the success of foreign harvests, represent a much lower portion of total exports than they used to - 45 percent now vs. 69 percent in 1981, according to the U.S. Agriculture Department.

* Exports of consumer food products (such foods as apples and cherries), the fastest-growing segment of U.S. farm exports, are becoming less dependent on large single markets like Japan and Mexico. Total U.S. farm exports, for example, are likely to establish a record this year despite at least a 12 percent drop in sales to Mexico, the United States' third-largest market,

because of the peso devaluation.

* Prices of consumer food products are generally unaffected by market- distorting U.S. government farm programs. Farm legislation in the early 1980s raised the loan rate for growers of wheat, rice, barley, soybeans and other bulk crops, effectively raising their price on the world market. That allowed other countries to make inroads on U.S. market share until the program was changed in 1986.

* Finally, supermarket chains springing up in several developing countries require large quantities and consistent quality produce, giving an edge to U.S. farmers who are the largest and among the most efficient growers on earth.

"This export expansion is much more sustainable," said August Schumacher, administrator of the U.S. Agriculture Department's Foreign Agricultural Service. "Product is going to more diverse markets, to growing economies, and most importantly these are private sellers (dealing with) private buyers. The government is not involved."

"It is important that we strive for sustainable trade growth," he said. ''We do not want to repeat what happened in the 1970s when we saw a tremendous export boom, only to be followed by a shrinking U.S. market share by the mid-1980s."

The future looks promising for U.S. farm exports in other ways.

Farmers in many foreign countries have been protected from imports for so long that they are often unable to compete in an era when tariffs are being eliminated under rules of the World Trade Organization.

With supermarkets emerging as a central means of food distribution, inherent advantages U.S. producers have in terms of quality and production capacity are quickly becoming realized, experts say.

"One of the trends that is helping us is a worldwide (movement) towards supermarket distribution. We are seeing a change in retail structure with supermarkets handling a majority of the total food volume," said Roberta Cook, an agricultural economist at the University of California, Davis.

"That is important because supermarket chains, as they get larger, want large-volume, consistent-quality suppliers. Many countries have only recently opened their economies, and their own food industries were highly protected

from competition and hence less than efficient. So frequently supermarket chains in other countries can get more reliable supplies from U.S. sources," she said.

Foreign agriculture industries are at a disadvantage for other reasons. Laws in Japan, the largest single U.S. market, have prevented farms from consolidating, driving up their costs and leaving many on the brink of bankruptcy. Few young Japanese are choosing agriculture as a career and the farm population continues to age.

Technology is also playing a role in U.S. producers' ability to get fresh products to Asian markets. Culinary traditions in many Asian countries demand fresh, unblemished fruits and vegetables that U.S. farmers grow in abundance and can now deliver in ripened condition inside atmosphere-controlled shipping containers.

U.S. agriculture is relying more heavily on exports almost every year. The 1994 export figures released last week for California, the largest U.S. farm state, show that 32 percent of the state's $20 billion in farm production is now exported.

That, combined with population trends, positions U.S. agriculture well for the future, according to experts.