U.S. AGRICULTURAL TRADE UPDATE March 23, 1998 March 1998, FAU-15 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- U.S. AGRICULTURAL TRADE UPDATE is published monthly by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. Subscriptions to the printed version of this report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #FAU, $41/year. ERS-NASS accepts MasterCard and Visa. --------------------------------------------------------------------------- Summary--Fiscal 1998 U.S. agricultural exports are slightly below those of 1997, while imports are up strongly. Exports for the first 4 months of the fiscal year (FY) slipped 1 percent to $21.1 billion, while imports reached $12.4 billion, a 6-percent gain. January 1998 exports dropped to $4.8 billion, 8 percent below December 1997 and 4 percent less than January 1997. January imports reached $3.2 billion, a gain of 7 percent compared with last January, but 2 percent below December 1997. The surplus of exports over imports is already down 11 percent for the year at a cumulative $8.7 billion. Exports--Cumulative bulk exports are sliding again and, at $9 billion, were 9 percent below a year ago. Corn, pressed by strong competition, has an export volume decline; but wheat and soybean volumes and values are up, and cotton is little changed from last year. January U.S. corn exports equalled 3 million tons, a 35-percent decline from January 1997. Value dropped to $357 million, 40 percent less than January 1997; projected large outturn world-wide is pushing prices down. Through January, fiscal 1998 corn exports reached 12.6 million tons (down 34 percent from 1997), worth $1.5 billion (down 43 percent). Contributing factors include declining demand in Asia and strong export competition from China, Eastern Europe, and Argentina. In contrast, 1998 U.S. wheat exports shot up in January, rising 59 percent to 2.6 million tons and a 40-percent gain in value to $411 million, compared with January 1997. This gain brought total fiscal 1998 wheat exports to date to 9.4 million tons and $1.5 billion. Soybean exports for 1998 increased to 14.5 million tons and $3.9 billion, up 12 and 8 percent, respectively, over 1997. However, January U.S. soybean exports declined to 2.5 million tons, valued at $664 million. U.S. soybeans were very competitive early in the fiscal year, but stronger export competition from South America is anticipated as the harvest finishes. At 542,000 tons, 1998 U.S. cotton export volume is up slightly year-to-year, while the cumulative $917 million in value is off slightly, reflecting declining prices. High Value Product (HVP) exports continue to rise in 1998; through January, fiscal 1998 HVP exports reached $12.1 billion, 5 percent above 1997. As in 1997, exports of vegetable oils lead the gains in HVP and are up 49 percent so far this year to $868 million. Live animals and dairy products also are doing very well; and so far, meat exports have risen, despite lower Asian demand. Imports--The 6-percent import growth in the year-to-date is led by coffee, the largest import. Coffee imports already have reached $1.2 billion, up 33 percent year-to-year. Almost all the other import categories also have increased so far this year, except for rubber, sugar, and dairy. Imports are expected to continue rising during the year because other countries' currencies have been depreciating, making imports from many places relatively less expensive. (Carol Whitton 202-694-5287) Expansion of U.S. high value product export value expected to continue in 1998--Despite dampened world economic growth, especially in Asian markets which recently have taken a large share of U.S. meat and hides and skins exports, the value and share of HVP exports in total agricultural exports is again projected to increase in 1998. HVP exports in 1998 are projected at about $34.1 billion and a 61-percent share, compared with $33.9 billion and a 59-percent share in 1997. Exports of vegetable oils and horticultural products are expected to continue driving HVP export growth in 1998. The value of HVP exports has grown continuously since FY 1985 and has reached a record every year since 1988, increasing even in years when total agricultural trade value declined. Beginning in 1991, the value of HVP exports exceeded bulk export value each year, even in 1996 when the value of bulk exports rose sharply due to strong world demand and high grain prices. Except for 1996, the HVP share of total U.S. agricultural export value also has risen annually, from 48 percent in 1990 to 59 percent in 1997. Next Update: April 23, 1998 END_OF_FILE