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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />n~4"1 fIl"'1 5 <br />~ ' ~ 1 j -." . <br />U v ~-~ <..I <I. <br /> <br />effect. However, it is impossi bl e to simultaneousl y estimate the export <br />demand with the price effect. Once the initial export demand is made, <br />these quantities are adjusted by the export elasticities in the Commodity <br />Production and Utilization compOnent of the NIRAP system. The result is <br />generally a decline in the final level of exports relative to the constant <br />price demand. The reason is that as consumers are made aware of the price <br />of the commodity, they will consume less of it. <br /> <br />Figures II-4 through II-a graphically displ ay the hi storical 1 evel s of <br />exports, short- and long-term trend lines, and the final projections from <br />the NIRAP output. With the exception of wheat, the projected export quan- <br />tities are generally between the long-term and short-term trend lines. The <br />short-term trend 1 ines have a special significance in the analysis of <br />export demands. A number of factors which occurred shortly before or dur- <br />ing 1972 caused a dramatic change in the export demand for U.S. agricul- <br />tural commodities. Some of these changes are: the Soviet Union and other <br />Communist bloc countries entering the market as a major force; the U.S. <br />buying more manufactured goods abroad (such as automobiles from Japan and <br />Europe) thus giving these countries the currency to purchase American farm <br />commodities, and the.unpegging of the dollar from the gold standard thus <br />allowing it to float relative to other currencies thus making U.S. commod- <br />ities more attractive. <br /> <br />The underlying assumption for these export demand projections is that <br /> <br />II-27 <br />