U.S. AGRICULTURAL TRADE UPDATE October 25, 1999 October 1999, ERS-FAU-34 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-While U.S. agricultural exports increased $231 million in August 1999 from July, the fiscal year-to-date value is still $5.1 billion lower than in 1998. The August export value is the most since March 1999. Imports also increased $91 million in August, bumping the fiscal year total up $475 million over 1998. As a result, the U.S. agricultural trade surplus inched up in August, but remains $5.6 billion below 1998's October-August total. Exports-Bulk commodity exports in August rose $45 million to almost $4 billion, due mostly to export gains for soybeans. While the 11-month bulk value is still 13 percent lower than in 1998, the volume of bulk shipments is up 14 percent, a reflection of significantly lower export prices for bulk commodities in 1999, except for rice (see table 5). In cumulative value, only corn exports are ahead of last year. Soybean shipments rose 50 percent in August from July 1999, up 501,000 metric tons, explained in part by reduced competition from Brazil. Nevertheless, the fiscal year value thus far is $1.6 billion lower than in 1998. August shipments increased significantly to Mexico and Asia, primarily to China and South Korea. Over the fiscal year, shipments to world markets were lower, except to Central America, Russia, and Canada. While export prices for soybeans appear to have stopped falling, average export prices in 1999 are still 20 percent lower than last year. Wheat exports in August were up $5 million but lag fiscal 1998's cumulative value by more than $100 million. Since volume shipments were down 110,000 metric tons in August, the gain in value is due to higher wheat prices. Export sales to the Middle East and to South Asia are both almost $130 million lower in fiscal 1999 than in 1998. Low petroleum prices in the first half of 1999 are in part responsible for less demand from the Middle East. Volume shipments to Pakistan are significantly down in 1999 due to a bumper harvest there. Cumulative exports of corn are up by more than $600 million from 1998, but have fallen two months in a row. For fiscal 1999, lower corn export prices have been more than offset by a substantial increase in the volume shipped--36 percent higher thus far. Sales to Mexico, Latin America, South Korea, the Mid-East, and Egypt account for much of the increased volume. Cotton export value was down in August and cumulative sales of $1.3 billion are about half their 1998 level. This will be the fourth consecutive year of falling U.S. export value for cotton. World cotton prices are at their lowest level since 1992. Volume shipments similarly lag 1998's shipments. Sales to Mexico, Latin America, the Mid-East, and Asia are considerably lower in 1999 than in 1998. Abundant world supplies of cotton have intensified competition for markets. Despite a $186-million gain in August, exports of high-value products (HVP) for the fiscal year are still behind 1998. Red meat and sugar led export gains in August. Japan's recovery has boosted demand for HVP. August gains for exports of animals and products (except poultry) more than offset lower sales of vegetables and fruits. U.S. export prices for HVP have also been lower this year than in 1998 except for fruits and nuts. Only vegetable exports are up in fiscal 1999 from 1998. Imports-Fiscal-year gains in U.S. agricultural imports are attributed largely to higher demand for red meat, dairy products, fruits, vegetables, and beverages. Competitive imports have risen by $1.5 billion, which is more than the $1-billion decline in non-competitive imports (mostly tropical products) so far in 1999. Most competitive imports were from South America and the European Union, although most red meat came from Canada. [Andy Jerardo, 202-694-5323] Agricultural prices stop falling-After reaching lows early in the summer, average world food export prices in August 1999 climbed back to last spring's level. While prices for agricultural raw materials and fertilizers remained weak, U.S. export prices for food recently inched up (see table 5). August prices for wheat, corn, soybeans, and cotton were higher than in the previous month. Rice and tobacco prices have also partially recovered from earlier lows. U.S. export prices for most high-value products gained late last summer. Renewed economic growth in Asia and Europe and a weaker dollar have begun to boost their demand for imports and stimulate prices. Next Update: November 22, 1999 END_OF_FILE