World Sales of U.S. Crops Improve, Lyng Says

While the nation’s trade deficit worsens, U.S. farmers are beginning to fare better in world markets, Agriculture Secretary Richard E. Lyng said Tuesday.

Lyng, in Monterey to address a meeting of farm cooperative executives, told reporters that agriculture exports now appear likely to exceed imports this year by about $6 billion to $7 billion. He estimated that farm exports will remain at about the $26-billion level recorded last year but predicted that imports will drop from nearly $21 billion in 1986 to “about $19 billion or $20 billion.”

That would reflect modest improvement over last year, suggesting that the five-year decline in farm exports has bottomed out.

Last year, for the first time since 1959, the nation’s farm trade account ran monthly deficits during May, June and July. In addition, the $26 billion in exports marked a 39% decline from the record $43.8 billion in 1981. Exports have been hurt since then by the generally strong dollar and price-inflating federal subsidies for such basic farm commodities as corn, wheat and cotton.

Lyng’s relatively optimistic projection for 1987 followed the announcement last week that the nation’s overall trade deficit climbed to $14.8 billion in January, up from December’s $10.7 billion. That increase came despite the weakening of the dollar against such key currencies as the Japanese yen and the West German deutsche mark.

If monthly deficits of that size continue throughout 1987, the nation’s trade deficit would exceed last year’s record $169.8 billion.

Agriculture--aside from the rare case of red ink for three months last year--has generally been a bright spot in the nation’s trade picture.

Lyng said the turnaround in farm trade stems in part from the falling dollar, which makes U.S. goods cheaper abroad while raising the prices of imports for American consumers.

Lyng noted that California’s many specialty crops, whose growers do not receive federal subsidies, have led the way in agriculture exports. California, the nation’s leader in farm production, accounts for more than one-tenth of U.S. production. More than one-fifth of California’s farm production is exported.

But the state’s export pattern has fallen in tandem with the national slump, dropping from more than $4 billion in 1981 to less than $3 billion last year.