Washington - The months-old slide in farm prices has bottomed out, USDA Secretary Dan Glickman said , but recovery is still a year away in the view of private analysts.
The prospect of a two-year downturn could heighten the drive in Congress for an election-year farm bail-out. A showdown could come soon, Senator Byron Dorgan, North Dakota Democrat, told reporters.
Farm income was forecast to plunge 12% this year, the result of low grain and livestock prices engendered by a global grain glut, an oversupply of meat and lukewarm demand for food.
The Clinton administration proposed a record $7.3 billion in aid to farmers, chiefly through larger crop supports. Republicans offered $3.9 billion last week, half in bonus payments to offset a deterioration in agricultural exports. Both would earmark about $2 billion for disaster relief.
Crop and livestock prices will improve slightly in 1999, according to a newly updated forecast by the respected Food and Agricultural Policy Research Institute at the University of Missouri. Farm income would return to strong levels - $57.5 billion -- the following year, it said.
"We've got the cattle sector turning around with some higher prices by 2000," said FAPRI analyst Scott Brown, adding pork and crop prices would also brighten.
J.B. Penn, senior vice president at Sparks Companies, said the agriculture sector might be bottoming out, provided financial distress did not worsen in developing nations.
"We're fairly optimistic at the moment," Penn said. "This could be a fairly short-lived thing."
Most U.S. farmers were in solid financial shape, Penn said. Some 321 million acres probably will be sown to the major U.S. crops next year, he said. This year, 328 million acres were sown.
The 1996 "Freedom to Farm" law, which removed most federal controls on what farmers grow, has led to more volatile crop prices, said Daryll Ray, head of the Agriculture Policy Analysis Center at the University of Tennessee.
"There is not as much to buffer the highs and lows," Ray said, because long-term grain reserves were abolished and price supports were lowered.
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