U.S. AGRICULTURAL TRADE UPDATE May 25, 1999 May 1999, ERS-FAU-29 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 # SUB-FAT-4030, $52/year. ERS-NASS accepts MasterCard and Visa. --------------------------------------------------------------------------- Summary-U.S. agricultural exports for the first 6 months of fiscal 1999 are down 14 percent from last year to $26.2 billion. This drop occurred despite a $200-million increase in March exports over February. At $18.8 billion, imports are about the same as last year. March imports, however, plummeted 15 percent from February. Through March, the cumulative surplus in agricultural trade is down 36 percent to $7.4 billion. The strength of the U.S. economy and the appreciation of the dollar are working to narrow the U.S. agricultural trade surplus. Exports-Bulk exports have declined at more than twice the rate of high-value products so far in the fiscal year. The $10 billion of bulk products shipped through March are 21 percent below last year's $12.7 billion. Most of this drop is in exports of soybeans and cotton. Corn remains the bright spot in bulk 1999 U.S. exports. In the year-to-date, the value of corn exports is up 6 percent over 1998, despite lower prices. Export competition from Argentina and China is off sharply, but has been only partially offset by increased competition from the European Union. U.S. shipments to Latin America are up 40 percent, largely to Mexico, but also to South America, where exports to Venezuela, Chile, and several smaller importers have increased significantly. Shipments to South Korea also have begun to rebound and are now more than 80 percent above last year, as recovery in that economy is underway. While the value of wheat shipments in March 1999 fell 12 percent below March 1998, March exports expanded fractionally from February 1999. But, cumulative wheat exports still are 14 percent lower in the fiscal year. Import demand remains below last year and shipments to Africa, the Mid-East, and South Asia are significantly lower, partly reflecting larger production in these regions. But export competition also has slowed somewhat, both compared with earlier expectations and with last year. Exports of soybeans in 1999 are $1.8 billion behind last fiscal year, a 36-percent plunge. Soybean prices have fallen farther than prices of other bulk commodities. Also, more abundant supplies, especially from Brazil and Argentina, are flooding markets. U.S. exports to Latin America have more than halved in value, and even shipments to Mexico are off 20 percent. Cotton exports are down more than 40 percent so far in the fiscal year as demand and prices both fell. Prices have been driven down by both excess beginning stocks and weak world demand. Shipments to South America and Asia are well below last year. Exports of high-value products (HVP) thus far in fiscal 1999 are $16.2 billion, 9 percent lower than the $17.8 billion of last year. This decline is primarily attributed to the economic downturn abroad, as well as to foreign currencies' depreciated purchasing power. Exports of meat and poultry are down 14 percent, dairy products are off 11 percent, and hides and skins are down 23 percent. Sales of nuts, oilcakes and meal (particularly soybean meal), and beverages have also dropped. Imports-Imports have declined by $131 million, or less than 1 percent, thus far in 1999. This drop is largely in noncompetitive imports-coffee (-21%), rubber (-24%), and cocoa (-11%). Competitive imports are up 4 percent, as purchases of meat rose 8 percent, dairy products increased 24 percent, fruits and nuts gained 10 percent, vegetables rose 7 percent, wine increased 11 percent, and malt beverages gained 16 percent. Excluding Mexico, imports from Latin America fell 3 percent, while imports from Asia dropped 6 percent. [Andy Jerardo, 202-694-5323] Sources of U.S. Agricultural Imports-Imports from Central America, the Caribbean, and Asia have declined in fiscal 1999. However, these declines are almost offset by increased imports from South America and Europe (including Eastern Europe and the New Independent States). More than 60 percent of U.S. imports are purchased in the Western Hemisphere. Of those purchases, most come from Latin America, including Mexico, which accounts for about one-quarter of imports. Of the 40 percent of U.S. imports originating in the rest of the world, Europe accounts for the majority. Next Update: June 21, 1999 END_OF_FILE