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BOISE --To an economist looking at the trends, American agriculture is on a downward slope.       Steven Blank, an agricultural economist with the University of California at Davis, calls them "economic challenges facing       agriculture," but whatever they're called, the numbers are frightening.       From a peak of 6.3 million farms in the 1930s, farm numbers have dropped to 1.9 million, with less than half of those reporting that they derive all their income from agriculture. The amount of land in farms peaked at 1.2 million acres in 1954 and has fallen to 931,800 acres, according to the 1997 agricultural census.       The real story behind those numbers, Blank states without fanfare, is that agricultural profits are being squeezed. Commodity prices are set globally while production costs are determined locally, he said.       According to the U.S. Department of Agriculture's price index for 1990 to 2000, the prices farmers received for their commodities fell by 7 percent while the prices they paid for inputs rose by 20 percent.       The end result is a 1.5 percent return on investment to agricultural operations.       "Yes, there are good times. Yes, there are bad times," Blank said. "But in general, profits are being squeezed."       That squeeze shows up graphically when return on investment is plotted over the last half century. In 1960, agriculture earned a return of 2.5 percent; in 1983 returns dropped into negative territory with a minus 1.5 percent. The abnormality on that chart is 1973 when returns peaked at 7 percent.       Blank has become convinced that the mid-1970s is a major turning point in the well-being of American agriculture, and he puts the blame squarely on the economic shock that resulted from the oil embargo of 1973.       "That oil shock sent an explosion of research dollars into funding better transportation and storage systems," he explained.       Growing up on a fourth generation cattle ranch in California, Blank picked up summer jobs picking tomatoes, nearly all of which were consumed within a one-day bumpy truck ride from the field. Back then, tomatoes had thin skins and flavor, Blank remembers. Today, tomatoes have been bred to have red leather covers that will withstand anything -- including the       indignity of being shipped around the world.       "Now it's possible for even the most perishable commodities to be shipped anywhere in the world," he said. "Now farmers are in direct competition with another producer of the identical product -- no matter where in the world that producer is."       That economic reality is pushing farmers and ranchers up what Blank calls the food chain of agriculture. At the bottom of the food chain are low-value annual crops like wheat that require low investments. High-risk, high-investment crops like perennial tree and vine crops are at the top of the food chain.       As long as Mother Nature cooperates, farmers can keep moving up the rungs of the food chain until an operation reaches the limits of its climate, water and labor. At that point, farmers need to look at non-agricultural revenue sources to make the income they desire, Blank said.       Farmers reading the same economic tea leaves as Blank are making the switch. While farmland is shrinking, the acreage devoted to orchards has grown from 4.8 million acres in 1992 to 5.2 million acres in 1997. Nearly half of that acreage is located in California.       Blank also said the food chain creates some unintended consequences on land use. Higher value crops tend to be grown closer to cities while the lower-value crops are far off in the country side.       The end result, in Blank's opinion, is that U.S. agriculture will focus on the higher value, but higher risk crops, while letting other countries produce low-value crops. He points to wheat as a crop that U.S. farmers will cease to grow. In the last 40 years, U.S. wheat production has almost doubled while world wheat production has tripled and the U.S. share of the world market has shrunk.       "We do wheat pretty good but so do other people," Blank said. "Our wheat production could disappear and the world wouldn't notice."       But not everyone draws the same conclusions from the numbers. Don Steward, with the American Farmland Trust, admits global competition poses real concerns for American agriculture. "Sometimes, in agriculture, we feel that our problems are overwhelming," he said.       While farmers can't solve the problems on their own, he believes there is a constituency among the American public that can help.       "There is a large group of folks out there that want to see agriculture survive and thrive," he said.       By tapping into that political resource, Stewart believes agriculture can find the solutions to marketing and trade issues that bedevil producers today; as well as securing funding to provide cost-share for the environmental costs farmers are bearing today.       A final piece of the solution, in Stewart's view, is a program to purchase development rights off farmland near cities. Half of the value of agricultural production today is grown in counties that the USDA-Natural Resources Conservation Service considers metropolitan counties.       "We are losing agricultural land and three times the rate of population growth," Stewart said. "This is not a mathematic equation, it's a social or cultural issues. It's a choice we're making."