4/27/01

Contacts:
Bruce Babcock, Center for Agriculture and Rural Development, (515) 294-6785
Sandy Clarke, Center for Agriculture and Rural Development, (515) 294-6257
Brian Meyer, Agriculture Communications, (515) 294-0706

ISU AG ECONOMIST SPEAKS ON FARM ECONOMY AND TRADE TO U.S. SENATE COMMITTEE

AMES, IA -- Bruce Babcock, director of Iowa State University's Center for Agricultural and Rural Development, appeared before the U.S. Senate Committee on Agriculture, Nutrition and Forestry on Wednesday, April 25, to talk about the farm economy, current agricultural trade conditions, and possible barriers to trade over the next five years.

Babcock used baseline projections from the Food and Agricultural Policy Research Institute (FAPRI), a dual institute of the ISU center and the University of Missouri, to give an overview of the effects of underlying economic trends and domestic policies on U.S. and world markets.

Babcock told the committee that, based on the FAPRI projections, he expects crop prices to grow moderately over the next five years. Price increases, he said, will be tempered by productivity increases, both in the United States and in other exporting nations.

A bright spot in agriculture is in the livestock sector, according to Babcock. "Strong demand, low-cost producers, and high-quality products are making the United States quite competitive in world markets," he said.

But Babcock cautioned that this advantage is contingent on keeping the U.S. free from foot-and-mouth disease. "Public investments in maintaining this status may yield the largest short- and long-term returns in agriculture available to Congress and the U.S. Department of Agriculture," he said.

A copy of Babcock's full statement is available at http://www.card.iastate.edu.

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