Domestic and Export Demand for U.S. Agricultural Products

Abstract

Current financial conditions within the agricultural sector focus our attention on the imbalances between quantities supplied, quantities demanded, and price levels which are sufficient to cover the production costs for a significant number of producers. While the discussion often centers on the importance of the export market, the domestic market remains the major or sole outlet for many agricultural subsectors. Thus, to assess realistically future resource needs for agricultural production, it is important to evaluate both foreign and domestic demand potential.In this paper we first draw on recent research to evaluate the potential for domestic market growth to the year 2000. We then provide an assessment of the growth potential in export markets. Finally, we draw some conclusions regarding resource needs, assuming historical trend yields. Domestic Market PotentialAs noted by Joe Havlicek in his presidential address to the American Agricultural Economics Association, the domestic market for agricultural products has received less attention than international markets, yet approximately 80% of gross farm receipts are generated by sales of commodities destined for U .S. markets. Several recent studies, however, have focused on the domestic market demand potential for food. Musgrove analyzed U.S.

An Analysis of Value-Added Agricultural Exports to Middle-Income Developing Countries: The Case of Wheat and Beef Products

“…According to Myers, Blaylock, and White (May, 1987), economic factors contributing to foreign demand growth for agricultural commodities included rates of real per capita income growth, especially in the middle income developing countries, growth in foreign exchange earnings, and the availability of credit at low real interest rates. They also argued that future demand growth (especially for food grains, feed grains and oilseeds) would depend on population growth and real income growth and distribution.…”