U.S. AGRICULTURAL TRADE UPDATE September 24, 1999 September 1999, ERS-FAU-33 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 of $41 billion through July of fiscal 1999 are 11 percent below 1998's October-July value, while imports, at $31.6 billion, are up 1 percent. The cumulative trade surplus is down 37 percent to $9.6 billion. The dollar's strength and lower prices of many commodities since 1996 are major factors in the decline in U.S. export value and the trade surplus. July 1999 export values are the lowest for the month since 1994. Nevertheless, the July monthly trade surplus is the highest since February because monthly agricultural imports fell to the lowest value since August 1998. Exports-Bulk commodity exports of $15 billion through July are 15 percent lower than in 1998. Since bulk export volume in total is 12 percent higher than in the 10-month period last year, the decline in export value is due to lower average prices for bulk commodities. Wheat and tobacco export values were down, but volume was up. In percentage terms, the drop in cotton export value thus far in 1999 exceeds the drop in all other major U.S. agricultural exports. Cotton prices have decreased to half their high levels in 1995, and volume also is down. However, export volume and value have both gained in July 1999 from June. Abundant world supplies and weak demand caused U.S. soybean exports to fall 11 percent in volume and 29 percent in value thus far in 1999. Shipments thus far in fiscal 1999 are lower to South America, Mexico, Europe, and Asia, particularly to Brazil, Japan, and China. July exports, however, rose slightly compared with June. The value of wheat shipments in July rose 14 percent from June, but year-to-date wheat exports still are behind last year's pace. Wheat prices (Gulf port) in July were the lowest of the past decade. But, export volume is 13 percent above 1998. At this pace, the 1999 volume of wheat exports should exceed 1997 and 1998, but export value this year slipped from 1998. Increased wheat shipments to Latin America so far in 1999 offset declines to Asia and North Africa. Corn now leads bulk commodity exports in value at $4.2 billion so far in fiscal 1999, a 15-percent increase over the same period in 1998, but still far behind the pace in 1996 and 1997. Volume is 37 percent over 1998, as demand from Latin America and Asia has increased. Low corn prices (Gulf port), which in July were only two-fifths of the 1996 peak, coupled with the beginning of economic recovery in Asia, are boosting demand in world markets. Further gains in U.S. corn exports to Asia depend on how much China can export and how low China's corn prices fall. Exports of high-value products (HVP), at $26.1 billion, are 9 percent below last year's pace. The largest declines are in poultry meats and hides and skins. Red meats, feeds and fodders, and nuts also are each more than $100 million behind 1998's export values. So far, poultry exports to Russia are $500 million less than in 1998. Hides and skins exports to Canada, Mexico, and to East Asia lag 1998's pace as well. The purchasing power of these countries' currencies weakened as the dollar strengthened. Imports-While imports in July are the smallest so far this year, the cumulative value of $31.6 billion is slightly ahead of 1998's pace. The largest gains in year-to-date imports are in fruits, vegetables, red meats, dairy products, and wine and malt beverages. Imports are expected to surpass the past year's value because U.S. consumers continue to take advantage of the dollar's high purchasing power. The major foreign sources of U.S. agricultural imports so far in 1999 are Canada, the European Union, Mexico, Brazil, Colombia, Indonesia, Australia, and Chile. Andy Jerardo, 202-694-5323, ajerardo@econ.ag.gov] U.S. vegetable exports rising-Vegetables are the only major HVP showing export gains in fiscal 1999. Exports so far equal $3.6 billion. Fresh vegetables account for about a quarter of all vegetable exports. At 1.6 million tons for the 10 months, U.S. fresh vegetable exports show a 2-percent gain in quantity, while having slipped slightly in value. Three of the five leading fresh vegetable export commodities--lettuce, broccoli, and tomatoes--show quantity gains in 1999. The growth reflects larger 1999 U.S. acreage, very low prices, and increased demand, particularly in Asian markets. Next Update: October 25, 1999 END_OF_FILE