For American farmers, 1981 is likley to be a year that looks good in contrast to the dismal year just ended -- but not from many perspectives.
After a year of drought-produced disasters and depressed farm income, particularly for farmers who raised livestock, net farm income is expected to rise slightly. And credit will be more easily available for anyone who can afford to pay through the nose to get it.
"I'm optimistic enough to say it can't get much worse," said George Stone, president of the National Farmers Union. Stone's tone summed up the glee with which many farmers greet the new year.
If farm income can't get much worse, farm image can. In 1980, food prices were behind the general rate of inflation, which was tough luck for the farmer. In 1981 it is predicted that food prices will be relativley high, especially meat in the early half of the year, which is tough luck for the farmer.
The cloud that goes with the silver lining is that food producers will be a handy target for everyone else's inflation frustrations.
Also hanging over the year are a series of uncertainties with major longrun consequences for American agriculture.
"It promises to be a fairly tense time with attention riveted to a greater degree on the Northern Hemisphere crop situation," said Howard Hjort, chief economist at the Agriculture Department under the departing Carter administration. "The critical factor will be weather patterns."
1980 was a year in which production of feedgrain stocks -- grains used for livestock feed -- was so low that most of the world's reserves were exhausted. Reserves of foodgrains -- primarily wheat -- also were drawn down, although not as severely.
"The present rapid draw-down of worldwide feed grain and protein oil reserves could turn into a rout by the fall of 1981 if the Soviets have another 'Communist' (i.e. poor) harvest and production is average to below average elsewhere in the world," wrote Office of Management and Budget Director-elect Dave Stockman in his draft economic manifesto for the Reagan administration.
"If weather patterns in the Northern Hemisphere are adverse to production again, it would be a major shock to the world food and agriculture system," said Hjort. "Prices would have to rise to ration inadequate supplies or there would have to be other steps taken."
Still other factors add more uncertainty. In the United States, planting a number of different types of crops may appear attractive because of relatively tight supplies and relativelyhigh prices. Faced with such an array of options, farmers will be gambling that they won't all make the same choices, producing a glut and lower prices.
On the international front, although farmers were told by Republicans during the campaign that the grain embargo would be ended with a Republican administration, such recent statements as Agriculture Secretary-designate John Block's description of food as a weapon caused a small flurry of concern over trade. Those statements have since been modified.
Soviet aggression in Eastern Europemight further complicate the trade picture. Almost a quarter of Americanwheat exports go to Warsaw pact countries, with most of it going to the Soviet Union and Poland. An invasion and the disruption it might create could be "devastating" in winter-wheat-producing areas, according to Joe Kinney, an agriculture analyst for the National Governors' Association. Most winter wheat is already in the ground.
Generally, however, agricultural trade is expected to increase in the year to come. Farm exports are projected to reach $48 billion in 1981.
Credit is another area of uncertainty -- but that's an imrovement. Last spring there was no uncertainty -- only crisis.
Interest rates were painfully high, credit was virtually unavailable in spots in the Midwest, and pressure to get crops in the ground gave producers little time to look for alternatives.
"If the farmer has to do what he did last spring and borrow at those horrible interest rates, he's in trouble. I don't think nonfarmers appreciate how dependent the farmer is on credit," said John F. Lewis of the American Farm Bureau. "If the high-interest situation we're now in tapers off by the first of March, we might have a pretty good year."
Money is expected to be more readily available in farm states this spring, no matter what the rates. And recent legislation changes improved the farm credit system's lending ability, Hjort said.