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Commodity forecasting is a risky but often highly profitable business for private traders. It is equally risky, in a different way, for public officials and never profitable since most people tend to remember the public official's errors and forget the times he was correct. Thus, I shall avoid forecasting and instead examine likely future trends based upon some facts, some extrapolation of the trends of the last three decades, and some personal observations which may be subject to difference of opinion. For two reasons I will focus my comments on a few widely traded agricultural commodities in which the United States has a major interest. One is that these are products about which I presume to have some knowledge; the second reason is that the nature of production, storage, and consumption of these agricultural commodities differ sufficiently from other primary commodities to warrant separate treatment. Even with these limitations, I would hope to be able to evoke some useful discussion and thought about future problems and policy issues. The basic points I hope to make are (a) trade flows in many of these commodities have changed drastically in the past three or four decades; (b) the behavior of countries which play an increasing role in commodity trade results in greater uncertainty and instability in world markets for most of these commodities; (c) traditional adjustment mechanisms no longer function satisfactorily and as a result the adjustments fall on relatively small groups; and (d) given these circumstances and the unwillingness or inability of certain groups to tolerate the prospective situation, new institu |
