The adoption of sustainable farming system practices by U.S. producers could affect the international competitive position of many agricultural commodities, including livestock. The adoption of such practices over the next several decades will depend on commodity policy legislation, environmental regulation, commodity price and acreage diversion incentives, and the success of ongoing GATT negotiations and trade liberalization. However, the extent and magnitude of these effects are dependent on the internalization and recognition of social costs of agricultural production by farmers and explicit tradeoffs between environmental degradation and agricultural profitability. Environmental externalities include soil loss, surface and ground water contamination by agricultural residuals, loss of wildlife habitat, and diminished aesthetic amenities. In effect, both public and private concerns about the marginal social environmental costs associated with production, when present, will influence the shape and location of commodity supply curves and the U.S. export capability. In turn, these supply curves, which define the production capacity of the U.S. to meet domestic and export demand, will determine our comparative competitive positions for different commodities in world markets.