The name is absent

in exports on farm prices and cash receipts at the
mid-point of the decade are identified in Table
11.

For wheat, a base export demand of 1,875 mil-
lion bushels is expected in 1985. At a nominal
price of $5.40 per bushel, cash receipts of $10,125
million would be anticipated. However, there is
about a one-in-three chance that exports will be
either higher or lower by 244 million bushels. If
exports were to increase by that amount, the
farm price of wheat would be $0.55 higher, and
cash receipts would be $2,483 million greater
than the base situation.² On the other hand, if
exports were 244 million bushels lower, a reduc-
tion in the farm price of $1.15 would be likely,
and cash receipts might be $3,193 million lower.

Corn exports of 3,000 million bushels are pro-
jected for 1985. At a season average farm price of
$3.70 per bushel, this would generate $11,100
million in cash receipts. Export variability of ±
402 million bushels might possibly occur, how-
ever. At the higher level of exports, farm price
could rise by $0.40 per bushel, causing cash re-
ceipts to be $2,848 million higher than in the base
situation. If exports decline, farm price would
fall by $0.35 per bushel and cash receipts by
$2,397 million.

Exports of cotton are projected at 7,200
thousand bales in 1985. A base price of $0.86 per
pound would give cash receipts of $2,972 million.
Variation in exports could range within ± 950
thousand bales. The effect of these changes on
the cotton price would be to cause it to rise, or
decline by approximately $0.13 per pound. Cash
receipts could increase by $901 million, or de-
crease by $782 million.

The situation for soybeans is similar to that for

TABLE 11. Impact of Potential Export Vari-
ability on Farm Prices and Cash Receipts, United
States, 1985

^a Variability equal to one standard deviation around inter-
national time trend.

Source: Calculated from Problems and Prospects for U.S.
Agriculture, ERS, USDA, December 1981, p. 83.

the other commodities. A base level of exports is
projected at 890 million bushels in 1985. At the
expected season average farm price of $8.15 per
bushel, there should be cash receipts from ex-
ports totalling $7,254 million. But there is also a
one-in-three chance that exports will be either ±
115 million bushels from the base. This could
mean as much as $4.60 per bushel more in the
farm price if exports are higher, or $1.45 less if
exports are lower. Cash receipts might be $5,560
million greater, or they could decline by $2,061
million.

In general, export VariabiHty will Hkely con-
tinue to confront those producers who choose to
trade in world markets during the 1980s. The im-
pHcations of such VariabiHty for farmers selHng
directly to export markets are rather significant
in terms of the price and cash receipts effects. In
addition, those farmers producing crops for
domestic use will most likely experience the
same price and receipts variability. Livestock
producers will face this variability through their
feed purchases. Overall, there appears to be a
one-in-three chance that because of VariabiHty in
export demand, cash receipts could be ± 20 to 30
percent from that which might otherwise be ex-
pected.

IMPLICATIONS

What, then, can be said about southern ag-
riculture in an era of expanding exports? Clearly,
southern farmers play an important role in pro-
ducing for export markets. They have brought
significant cropland back into production—much
of it being used to produce soybeans and wheat
for international trade. Rice, cotton, and peanuts
continue to be important commodities in world
markets, too. Increased feedgrain production
supports expanded livestock production in the
region—with much of the poultry output being
destined for markets overseas.

Reflecting national trends, agriculture in the
southern region has experienced a reduction in
farm numbers. The remaining 1 million or so
farms are considerably larger on average than in
years past. Commercial agriculture in the South
is now characterized generally by the 18 percent
of its farms that produce in excess of 80 percent
of its output. For individual commodities, the
level of concentration in production varies, al-
though in most cases well over two-thirds of the
output is produced by “primary” farms with
more than $40,000 in annual sales.

The economic viability of these “primary”
farms, as well as that of the smaller farms, is
quite closely tied to their abihty to withstand the
vagaries of the world marketplace. On average, it
is found that the debt-to-asset ratio for all farms
in the southern region has increased over the past
decade—both across the region and compared to
all farms in the United States. For the “primary”

² Analysis assumes that, at the increased price, the farmer-owned grain reserve release trigger would be reached and the price effect dampened.

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