These new markets lead to higher farm prices and greater returns to producers. Overall, U.S. agriculture has much to gain from freer trade, but these benefits come with added risks because trade is influenced by many factors. Changes in trade policies and economic growth rates among countries, exchange rate fluctuations, and the emergence of new competition all influence trade and make the international market more risky for U.S. producers. Nevertheless, with declining government support to agriculture, greater access to international markets is crucial to the future growth and prosperity of the agricultural economy of the United States. U.S. agriculture may have much to gain from expanded trade since many countries, especially in Central and South America, already have low duty access to the U.S. market, while U.S. access to their markets is limited by high tariffs and nontariff barriers.
International trade has a major impact on U.S. agriculture.
Exports are crucial, providing a market for a major share of crop production and a growing share of meat output. U.S. agricultural exports have varied widely rapid growth in the 1970's, the slump of the early 1980's, and the subsequent export recovery. This surplus has contributed positively to the overall U.S. trade balance, allowing the importation of foreign-made cars, petroleum, electronics, and wearing apparel. The importance of export markets to U.S. agriculture is illustrated in Table 1. In 1996, more than one-half of all U.S. wheat production and 48 percent of rice production was exported.