EDITOR’S NOTE —The following comments were made Feb. 23rd by Joseph W. Glauber, chief economist, USDA during the opening session of the Agricultural Outlook Forum in Washington.

Thanks, Madam Secretary. I too would like to welcome everyone to USDA’s 88th annual Agricultural Outlook Forum.

I will briefly give an overview of the major economic trends affecting U.S. agriculture and offer a few thoughts about 2012.

2011 was a very good year for much of U.S. agriculture. We saw record prices for many commodities, record agricultural exports and record farm income. Not surprising, record prices have prompted record production for many commodities and as we saw over the last half of 2011, prices for grains, oilseeds and cotton have come down, reflecting strong production levels.

World wheat and cotton stocks have rebounded and while supplies still remain tight for feed grains, slowing growth in biofuels and a return to trend yields should result in a rebound in corn stocks.

This should help relieve some of the volatility that have roiled markets over the past 5 years and improve prospects for future livestock expansion.

The outlook for U.S. agricultural exports

The global economic recovery has slowed in 2012 with negative GDP growth forecast in Europe as a result of the sovereign debt crisis. Yet despite slower growth, 2012 should be another good year for US agricultural exports.

The lower dollar will more than compensate for the expectations of slower world growth. With a slow economic recovery in the United States, U.S. agricultural products will likely remain competitively priced in global markets over the next few years.

FY 2012 U.S. agricultural exports are forecast at $131 billion, down $1 billion from the November forecast, but are still forecast to be the second highest on record in both nominal and real terms.

The decline from record exports in FY 2011 reflects record global crop production which has weakened prices and export volumes.

Imports are projected at $106.5 billion for FY 2012, up $12 billion from FY 2011 levels. The net trade balance for FY 2012 is forecast at $24.5 billion. This compares with a trade surplus of near $43 billion in FY 2011.