Japan will continue as the No. 1 foreign customer of American farmers at least through the turn of the century, maintaining its lead over the European Community, according to Agriculture Department trade analysts. In the fiscal year that ended Sept. 30, Japan once again topped foreign buyers of U.S. agricultural products at an estimated $8.3 billion, compared with the EC's imports of $7 billion. Emiko Miyasaka of the department's Foreign Agricultural Service said she expects Japan to maintain its lead over the 12-nation EC ``at least in the 1990s.'' Miyasaka said Tuesday in a telephone interview that Japan's top ranking as a foreign buyer of agricultural products appears solid through the turn of the century despite the EC's plan to unify economically by the end of 1992. Beyond the 1990s, however, she said the situation is too uncertain for predictions at this time. Miyasaka was asked to elaborate on a report by her agency last week which said Japan ``is likely to be among the strongest export growth markets'' for U.S. farmers. ``This optimism is based on the expectation that Japan's economic growth, while slowing, is expected to be the strongest of all industrialized countries, fueling consumer demand,'' the report said. Further, there has been some liberalization of Japan's agricultural imports through the current Uruguay round of negotiations under the General Agreement on Tariffs and Trade. ``Since 1964, when it emerged as Asia's first billion-dollar market for U.S. farm products, Japan has steadily expanded its agricultural imports,'' the report said. Japan moved in front of the EC as the top U.S. farm market in 1988. Bulk commodities such as corn, soybeans, wheat, cotton, tobacco and logs are the big-ticket items, but Miyasaka and other analysts believe there are greater market opportunities for high-value products like beef, vegetables, citrus fruit, fruit juices and processed wood products. In 1988, the U.S.-Japan Beef Agreement opened the door to growing sales of beef - from a value of $556 million in 1987 to $1 billion last year. U.S. exports of fresh, frozen and prepared vegetables rose to $253 million by 1989, the report said. Sales of french fries, for example, rose to $79 million from $37 million in 1983. A thorn in this trade development has been Japan's rice policy, which effectively bars imports, part of a national policy to protect domestic growers. The United States has called on Japan during the GATT negotiations to ease the restrictions. Miyasaka noted that the U.S. position on Japanese rice is part of an overall bid under GATT to reduce trade restrictions all over the world. In any case, she said, whatever Japan does about its rice policy will not keep that country from continuing as the leading foreign market for American farmers. --- WASHINGTON (AP) - A plan calling for modest cuts in farm payments has been approved by the European Community, but U.S. farm organizations are watching closely to see what happens when it goes before international negotiators. ``It's a step,'' said Dave Lane of the American Farm Bureau Federation's Washington, D.C., office. ``But it'll still probably go right down to the wire.'' The Uruguay round of negotiations under the General Agreement on Tariffs and Trade is scheduled to conclude Dec. 31 in Geneva. Late Tuesday, in Brussels, Belgium, the 12-nation EC endorsed a carefully worded proposal that sought to soothe fears of governments that their farmers would be hurt by reductions. At issue was a proposal to pare farm subsidies by 30 percent over 10 years, starting in 1986. Some reductions have already been made. The EC proposal, which had been due Oct. 15, will be submitted to the trade talks as the community's opening position in the final round of bargaining. Meanwhile, a coalition of 29 U.S. farm organizations and commodity groups on Tuesday released a letter to U.S. Trade Representative Carla Hills and Agriculture Secretary Clayton Yeutter declaring that no GATT agreement on agricultural trade would be preferable to one that ``papers over'' fundamental differences with the C. The American farm groups have bitterly attacked the EC's system of export subsidies and certain other practices that bear on world agricultural trade. ``As the deadline approaches without any encouraging sign from the EC that problems dealing with market access, export subsidies, and health and sanitary issues are truly negotiable, we are becoming increasingly concerned that a final agricultural package may be fabricated to once again paper over our differences,'' the groups said. The American Farm Bureau Federation and the National Grange were joined by 27 commodity and agricultural trade associations representing a wide variety of products, including meat, soybeans, nuts, avocados, raisins, peaches, cattle, corn, pork, turkeys, wheat, and fresh fruit and vegetables. --- WASHINGTON (AP) - Milk production has been rising this year and so has the output of some major dairy products, according to a monthly report by the Agriculture Department. In September, butter production was estimated at 84.8 million pounds, up 4 percent from a year earlier. Total cheese output, excluding cottage cheese, was reported Tuesday at 477 million pounds, up 6 percent. Non-fat dry milk for human food was reported at 50.6 million pounds in September, up 13 percent from a year earlier. But ice cream production, at 62.9 million gallons, was down 1 percent from September 1989, the report said.