US farmers are suffering from low prices and oversupply. The market is heavily supplied with maize, oilseeds, other grains and many meat products, reports the Financial Times.
Official estimates suggest US farm income this year will fall 20% to $42.5 billion (£25bn).
The decline has prompted the US farm lobby to call for financial assistance and some reversal of deregulation of the agricultural industry.
The collapse of demand from Asia and the impact of the Russian crisis have been blamed for the problems. There have also been weather problems, most notably severe drought in Texas and Oklahoma.
These factors have not affected all agricultural sectors and some farmers are better off while others are worse. Large harvests in important grain growing areas are likely to fare reasonably well, but wheat farmers in the upper plains and Texas will suffer badly.
The consequences of this seasons harvest are likely to be a drive towards consolidation in the farming sector and an increase in political pressure to wind back some of the provisions of the 1996 Freedom to Farm Act.
- North American roundup – weekly updates in FWi Markets
- Financial Times 01/09/98 page 32