Shrinking grain exports put squeeze on US farm income

American farmers are proud of their success in dominating world agricultural trade.

The US Department of Agriculture notes that as the world's largest agricultural exporter, the United States today supplies 80 percent of the soybeans, 67 percent of the feed grains, 40 percent of the wheat and cotton, and 20 percent of the tobacco and rice moving in world trade.

Yet the export success may conceal serious problems.

Farmers today are being squeezed by low farm commodity prices and high interest rates. Some agricultural economists warn of a possible wave of farm bankruptcies. Farmers facing that threat are demanding higher commodity prices to at least cover the costs of production.

Last year, the value of US agricultural exports set a record of $43.8 billion. Though experts disagree on how to apportion blame, most agree with US Department of Agriculture projections that farm export earnings will drop this year to $42.5 billion or less, chalking up the first year-to-year decline since 1969.

Despite current low grain prices, which are hurting US farmers, American grain exporters find it hard to attract customers. A stronger dollar and world economic problems have cut overseas demand.

Unless the projected export figure increases sharply, many farmers argue, selling crops at less than cost of production will simply bankrupt US farmers and deplete soil fertility as growers plant fencepost to fencepost to try to bolster lagging income.

US Agriculture Secretary John R. Block responds by saying that this country must ''aggressively expand farm exports.'' To do this, he says, the Reagan administration is working to remove trade barriers such as those imposed by Japan and the European Community.

The administration's determination to open new overseas markets for US farmers is welcomed by the American Farm Bureau, the nation's leading farm organization. Farm Bureau president Robert Delano says farmers should rely on ''the income-producing realities of the marketplace'' rather than on ''the income-supporting possibilities of federal farm programs.''

The alternative to exporting more US farm products is continued government programs to restrict production and stockpile agricultural surpluses. This is not a long-term answer, says Mr. Delano, because the government is not a consumer and eventually returns stockpiles to the marketplace.

US Feed Grains Council president Darwin E. Stolte says the answer to declining exports is for farmers to reunite in a farm coalition. By rebuilding broad political support, he says, farmers will be able to take advantage of world population growth and more than double agricultural exports by 1990.

James Howard, commodity marketing vice-president for the giant grain-trading firm Cargill Inc. of Minneapolis, Minn., says that America should take full advantage of ''our proven ability to produce grain more efficiently and cheaply than any other country.''

In an interview, Mr. Howard called on the government to work to remove international barriers to free trade and, at home, ''provide basic protection against disaster so that one year's bad prices won't wipe out the business of someone who is otherwise a good operator.'' Beyond these two basic functions, Howard says, the government should step back and let the free market work.

US exports still suffer, Cargill vice-president Robbin Johnson says, from the 1980 embargo on grain exports to the Soviets. Although President Reagan ended the embargo a year ago, the White House refuses to rule out possible future use of the embargo weapon. Farmers, farm-state congressmen, and grain traders say the threat of another embargo forces the Soviets and others to find new suppliers to avoid reliance on US supplies, which could be cut off.