Review

The past year was one of significant economic turnaround, with the influence of monetary and fiscal developments superimposed on the continuing transition from the economic disarray of the two previous years. In 1973 and 1974 the economy was subjected to a sharp rise in the cost of energy, crop failures, price controls, and the implementation of environmental, safety, and consumer protection programs which directly reduced productive capabilities across the economy. As a result, total real output declined from the fall of 1973 to the fall of 1974, even though growth of aggregate demand for goods and services slowed only moderately.

International economic relations of the United States, just as domestic ones, were heavily influenced by the recession of 1974-75 and by the resultant economic policies undertaken by most U.S. trading partners. U.S. merchandise trade responded to both the longer-term depreciation of the dollar and to differences in the severity and timing of the recessions here and abroad. Short-term fluctuations in capital movements and exchange rates were dominated by differential growth in output, differences in monetary and fiscal policies, and differences in interest rates among trading nations.

The United States Department of Agriculture (USDA) provides an annual appraisal of the outlook for food prices and consumption. The outlook for 1976 was presented at the National Agricultural Outlook Conference, Washington, D.C., November 17-20, 1975. This article discusses the outlook as presented by the USDA within the context of some recent food industry developments which had a major impact on food prices.