DICK GADY: Good morning. My name is Dick Gady, and I serve as the Vice President of ConAgra, the $24 billion food company located in Omaha that serves customers across the food chain. I too would like to commend the USTR and USDA for holding this listening session on the upcoming WTO round.

World agriculture trade or lack of it is having a profound impact on agriculture. It's certainly no secret that the farm economy is struggling. What's less known is that the rest of the food industry isn't doing all that hot either. Both in respect to historical performance and with respect to how other industries are doing. Food industry profits during the 1990's has been about a third of that of the growth in electronics, less than half of that of the growth in industrial machinery and financial sectors and considerably less than the chemical and technology sectors. Some security annualists refer to the food industry to be in times of quiet desperation, and investor expectations for the food industry stocks has generally declined.

Most food companies have undergone major restructuring over the last two to three years. And tough profit conditions have forced many consolidations and recent food company bankrupt.

My company Conagra has not been immune from the impact of the cyclical down turn in agriculture. We are instituting what we call Operation Overdrive which is a major effort on our part to get costs out of our system and to more aggressively market food products around the world. We must do this in order to survive in the global marketplace.

I provide this background not to complain but to emphasize that the same developments that have hurt producers have hurt food companies as well from the grower to the brand food companies. We must compete for capital. We must compete for employees with other industries in very tight markets for both. When food industry profits do not keep pace, our ability to attract capital suffers, our ability to build our business and remain competitive suffers, and this reverberates across the total food chain.

Most of the negative aspects of downward pressure on the commodity prices revolves around the struggling U.S. agriculture. As it's been said, ag imports are down about 20 percent from the peak which combined with currency devaluations in Russia and Latin American and others have made it difficult for the U.S. to export.

Compounding the problem as it has been said, subsidies on products that we export are about 50 percent. Subsidies on products that we import are 8 percent. This is intolerable. As Senator Kerrey would probably say, we need a bigger gun, and we need tough negotiations to narrow up this inequity. The only economically viable way we can do this is to use the leverage of other U.S. industries and other free-market trading companies to bring down punitive tariffs in other countries across the world in the upcoming WTO.

U.S. agriculture cannot afford to sit back and allow the trade process to regenerate. A lot has been said about the percentage of markets outside the U.S.. Those are true.

Even though devaluation and recession have slowed the growth in much of Asia, most expect those companies to recover. I just heard yesterday that in all likelihood 1999 and 2000 in terms of world growth back to back will be the softest period since the depression. So we've got a deep hole to climb out of, but we will. And when we do, we need the ability to keep competing for growing markets.

I have submitted some testimony in terms of potential focuses of the next trade round. I won't expand on those. I don't have time.

But I say just in conclusion, yesterday we at Conagra dedicated a new global trading facility on our headquarters campus. Part of the function of this facility is to more aggressively market commodities around the world. This means more Nebraska corn, more Nebraska beef, more Nebraska wheat will be sold. Assuming that the U.S. can gain volume and, again, we're going to have to rely on the upcoming WTO rounds to get that done. Thank you.

MICHAEL LEPORTE: Any questions?

JAMES SCHROEDER: No, I just have a comment. We appreciate this perspective from the food industry. I was just looking at some figures here in front of me. We tend to keep our statistics based upon three basic categories: the bulk agriculture commodities, then what we call intermediate products like flour, meal oil and then what we call consumer-oriented or value-added agriculture. And that is now our largest category.

And I think we have a tremendous advantage around the world. As I travel around, guess what? Everybody likes American food, believe it or not, and so this is a big area. And so we have to keep our eye on the whole food industry and on our marketing. This is one of our, I think, bright spots that we can keep it open.

DICK GADY: I might make just one comment since we're in the two minutes. I talked about GMO's that's -- I think that's a major threat to our exports particularly Europe and particularly due to the fact that the European retailers are essentially taking all GMO's out of their products at least in the UK. And I think a possible solution to that is consumer information not necessarily on the label but somewhere in proximity to where GMO products are marketed. I don't think we should be forced to label GMO's because they're not different, but the consumer probably does need to be informed not necessarily via labeling but some other method.