A new analysis by the Food and Agricultural Policy Research Institute at Iowa State reports the value of U.S. agricultural exports are expected to increase this year. However, farmers will still be faced with many challenges in the next decade.These results were provided by FAPRI, a research collaboration between Iowa State and the University of Missouri-Columbia, which makes baseline projections of United States and world agriculture outlooks twice a year, said Frank Fuller, technical director of FAPRI. The organization provides unbiased information to policymakers. “Basically, we analyze policy options, farm income and distribution of farm income,” said John Beghin, director of FAPRI. “We’re not advocating policies; we just show the pros and cons of policy options. It is important that we remain impartial and provide the best independent information possible.”The institute makes only predictions, not forecasts which would allow for outside factors. Factors possibly altering outlook include China being included in the World Trade Organization, drought or other weather conditions, said Fuller, ISU scientist in economics. Beghin, professor of economics, said the FAPRI staff presented 2001 predictions for the next 10 years to reviewers including researchers, congressional staff and other organization representatives in Washington D.C. in December.Based on the comments, the staff reconvened and made a definite set of projections. Congress, United States Department of Agriculture and other cooperatives were briefed in February about the finalized outlook.Beghin said he sees two positive occurrences for U.S. producers from the study results. “Beef and cattle prices are looking good for the next three to four years,” he said. “The second bright spot is the value of trade is expected to increase in the next decade. Most of the increase of value in exports comes from livestock products, mostly beef products.”A 2 percent to 3 percent yearly increase in exports is probably due to the conclusion of the Asian and Russian financial crises, Fuller said. “As income is rising, people tend to change their diets. Instead of consuming a lot of rice and vegetables, they may start consuming more meat and dairy products,” he said.The FAPRI report projects the value of U.S. exports will increase more than 46 percent by 2010. A little more than half of the growth in value is explained by increases in the total volume of exports, with strengthening prices generating the remainder. An 18.9 million metric ton rise in grain and feed exports, predominantly corn exports, accounts for 27 percent of the total increase in export value.While they may have a fairly strong production in the United States, farmers will still see low prices. “Even though exports are going to grow, it’s going to slowly bring the prices back up,” Fuller said. Beghin also said prices are not going to improve quickly.”We have an increase in belt commodities [corn, wheat and soybeans],” he said. “The price is not expected to improve within the next coming years.”As livestock production in developing countries continues to rise, FAPRI also predicts indirect and direct corn exports to increase by more than 25 million tons in the next decade. Wheat will not be a robust exporter because of European availability, and Fuller said the soybean market will have South America as a strong competitor. Hog prices are expected to drop by 2002, returning below $35 per hundred weight. Due to increased inventories of hogs, prices may drop below the drastic prices in 1998, Fuller said. John Lawrence, associate professor of economics and specialist in livestock yearly predictions, said hog commodity prices of the fourth quarter — October to December — will hit the break-even point. “It’ll be tough sledding through 2002,” he said. “Will it get disastrous? A couple of pieces fit into the puzzle — packer capacity and strength of demand.” Lawrence has seen what appeared to be a very grim outlook for the fourth quarter change to only dampened outlooks with fewer producers expanding operations, and in turn holding down increased hog numbers. He said producers should “start saving money and look for market access.” Contracting with packers may help stabilize low costs within the months of low prices.