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SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS

SOUTHERN AGRICULTURE IN AN ERA OF EXPANDING EXPORTS

Kenneth C. Clayton

Exports have played an important role in the
history of southern agriculture. C. E. Bishop
noted more than two.decades ago that “southern
agriculture has a high stake in international
trade.” In recent years, the effects of exports on
the southern region have become even more per-
vasive. Rudd was recently led to observe that
“the shift to a substantially greater involvement
and interdependency of agriculture in interna-
tional trade during the 1970s is perhaps the most
far-reaching event of [that] decade.”

Southern farmers have realized the effects of a
greater U.S. presence in the world marketplace.
Among the more important of these effects has
been a greater volatility in the demand for ag-
ricultural commodities. As a result, farmers
growing feedgrains have seen a heightened vari-
ability in the prices that they receive; farmers
raising livestock have experienced the related
swings in feed prices; and farmers producing
specifically for the export market have found
their economic circumstances dictated in large
measure by events occurring in the international
agricultural economy.

It is this instability that has been introduced
through the export demand for U.S. farm prod-
ucts which provides the central focus of this pa-
per. At issue, is whether, given that farmers have
expanded to meet the opportunities of the world
marketplace, they are adequately prepared to
deal with its volatility. The paper begins with an
overview of recent U.S. export experience—
including the matter of Variabihty. This is fol-
lowed by a brief review of the southern farm in-
dustry as it relates to the issue of exports and
instability. Next, prospects for exports and their
instability during the 1980s are assessed. Finally,
some of the more important concerns that insta-
bility in export demand raises for southern ag-
riculture are addressed.

AGRICULTURAL EXPORTS: PROMISE
AND PROBLEMS

Businessmen—including farmers—seek out
expanded marketing opportunities. For the past
two decades, a major source of growth for
American agriculture has been the world mar-
ketplace. The increase in exports has been im-
pressive. During the 1960s and 1970s average an-
nual export volume growth generally exceeded 5
percent (Table 1). Exceptions during the 1960s
included wheat and cotton, both of which re-
bounded sharply during the 1970s.

The growth of agricultural exports has several
roots. First, changes were initiated in farm price
support policy during the 1960s that effectively
made U.S. commodities more competitive in
world markets. Second, the adoption of a ∩oating
exchange rate in the early 1970s improved the
farmer’s competitive position. Third, a conscious
decision was made in many developed and
emerging middle income countries to upgrade
consumers’ diets. Feedgrains and related prod-
ucts have found especially good markets, as
livestock production received increased atten-
tion.

Despite the growth in agricultural exports,
variation around trend has emerged as problem-
atic. During the 1950s and through much of the

TABLE 1. Average Annual Growth Rates of
Agricultural Exports, Selected Commodities,
Southern Region, 1950s, 1960s, and 1970s*

^a Southern region defined as follows: Appalachian states
(Kentucky, North Carolina, Tennessee, Virginia, West
Virginia); Delta states (Arkansas, Louisiana, Mississippi);
Southeastern states (Alabama, Georgia, Florida, South
Carolina); and Southern Plains states (Oklahoma, Texas).

Kenneth C. Clayton is Chief, Food and Agricultural Policy Branch, Economic Research Service, U.S. Department of Agriculture,

Review comments by Jim Johnson, Jim Zellner, Gene Mathia, and an anonymous Journal reviewer are gratefully acknowledged. Views expressed remain the author’s and
do not necessarily represent those of the U.S. Department of Agriculture.

Invited paper presented at the annual meeting of the Southern Agricultural Economics Association, Orlando, Florida, February 7-10, 1982.

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