Ron Webber is satisfied with his harvest of corn and soybeans in 1997, even if it did not match 1996's record harvest. "It was pretty decent, considering the summer got hot and dry," says Webber, who farms 1,500 acres in central Nebraska.

It was pretty decent all around the country for agriculture. Net cash income, which includes about $7 billion in direct government payments, will be about $55 billion in 1997, down 8% from 1996, the best year of the decade. This year will not be as fruitful--the spreading financial crisis in Asia, while expected to affect agricultural markets less than the consumer and capital-goods ones, will take its toll on U.S. agriculture, which has become increasingly dependent on exports.

Indeed, the good health of the U.S. agricultural sector is due largely to strong international demand for food. Population growth and rising standards of living worldwide, as well as more liberal trade policies, have helped U.S. food exports expand at three times the rate of domestic consumption. Exported foods now account for more than 20% of total farm cash receipts in the U.S.

Last August, the Agriculture Dept. projected exports of $57.3 billion for 1997 and $58.5 billion this year. Now, those estimates are being revised to reflect the problems in Asia. "Instead of expansion of exports to Asia, they may actually decrease this year," says Gerald A. Bange, chairman of Agriculture's World Agricultural Outlook Board.

It will no doubt be a far cry from last year, when an August dry spell in the Midwest buoyed corn and soybean prices at the Chicago Board of Trade without much hurting the harvest. Result: Agriculture is forecasting crop sales of $105.6 billion for 1997, slightly less than the record of $109.4 billion set in 1996 but much better than the average of $91 billion so far in the 1990s.

COW CATCHER. Livestock sales should also finish strong for 1997--but this sector, too, could see a dip in 1998 Asian demand. Asians have developed a voracious appetite for American meat, but a serious economic slowdown is sure to reduce their purchases. The prices of live cattle and live hogs have dropped 4% since the end of September.

Although Asian markets will have a diminished role in the export picture this year, international markets remain the key to a vigorous U.S. farming sector, says Michael Singer, agriculture economist for the Federal Reserve Bank of Chicago. "We have to remain vigilant about what other countries are doing to keep our products out," he says.

The Farm Bill of 1996 calls for phasing out federal subsidies over the next six years, leaving U.S. farmers more vulnerable to price swings in commodity markets. That makes monitoring state-owned enterprises such as the Canadian Wheat Board, which subsidizes Canada's farmers, very important. U.S. farmers can ill afford to lose foreign markets.

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