U.S. AGRICULTURAL TRADE UPDATE December 20, 1999 December 1999, ERS-FAU-36 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-January-October 1999 U.S. agricultural exports equal $39.3 billion, 7 percent less than the first 10 months of 1998. Imports in the same period, however, are 1 percent above 1998 at $31.3 billion. The export surplus is off 30 percent in the year-to-date--$8 billion compared with $11.4 billion at this time last year. October 1999 exports of $4.5 billion rose 15 percent from September 1999's $3.9 billion but are 7 percent less than October 1998. Imports in October 1999, likewise, climbed 7 percent from September, but dropped 1 percent from October 1998. Exports-Bulk commodities account for about half the decline in 1999 export value. At $13.5 billion, bulk export value is 9 percent below 1998. But only cotton exports are falling in both quantity and value compared with 1998. The value of wheat and soybean shipments is off due to low prices, but the quantity of each is up in the calendar year-to-date. Corn exports are increasing in both quantity and value so far in 1999. At just $679 million and 466,000 tons, year-to-date cotton exports are the lowest in the last decade for this 10-month period. Some of the drop occurred because the Step 2 program was not in effect for most of the year. But the decline also reflects larger foreign beginning stocks, low world consumption, and the small 1998/99 U.S. crop. Exports in October 1999 rose slightly compared with September. The record 1998/99 U.S. soybean crop contributed to an 8-percent drop in prices and export value so far in 1999, but boosted soybean export volume by 13 percent. Volume has reached 16.8 million tons and value is $3.4 billion in the year-to-date. Although still below October 1998, both quantity and value shipped in October 1999 rose sharply from September. Wheat exports in October also gained in quantity and value compared with September, despite the fact that prices are continuing low and export competition is strengthening. But wheat export value is down in the year-to-date; January-October wheat shipments equalled $3 billion, a 3-percent drop. At 23.6 million tons, however, wheat volume is 7 percent above the first 10 months of 1998. In contrast, 1999 corn exports are the bright spot in bulk commodity exports, up 35 percent in quantity to 43.3 million tons and 19 percent in value to $4.2 billion. Year-to-date corn export quantity is increasing to every region of the world. U.S. corn exports to the Republic of Korea show the greatest recovery in Asia due to the country's rising demand for livestock feeds and meats as economic growth boosts domestic demand. Korea's meat exports to Japan also show an increase. At $25.7 billion, exports of high value products (HVP) also are off substantially in 1999, even though rising month-to-month in October over September. Cumulative 1999 HVP exports are down by 6.4 percent from 1998. Animal feeds (-$701 million), vegetable oils (-$499 million), meat & poultry (-$265 million), hides and skins (-$150 million) and fruit and nuts (-$120 million) account for most of the drop. Imports--The 1-percent cumulative gain in imports so far in calendar 1999 is primarily in fruits and nuts (+$741 million), meat and poultry (+$340 million), vegetables (+$173 million), wine (+$285 million), and malt beverages (+$159 million). Nearly offsetting declines are occurring in coffee (-$503 million), cocoa (-$154 million), rubber (-$237 million), vegetable oils (-$161 million), and cane and beet sugar (-$183 million). [Carol Whitton, 202-694-5287, cwhitton@econ.ag.gov] U.S. price competitiveness due to lower exchange rates is expected to improve in 2000. The dollar's inflation-adjusted value depreciated on average in 1999 from 1998 and is forecast to weaken further in 2000. However, the net effect on U.S. agricultural exports depends also on the dollar's exchange rate against competitors' currencies and exchange-rate pass-through to export prices. Exchange rates corresponding to U.S. markets for bulk and high-value exports indicate competitive gains in 2000, including lagged effects from 1999. In 1999, the dollar appreciated against currencies of competing exporters of soybeans, corn, wheat, red meats, poultry, fruits, vegetables, and cotton. The dollar is expected to remain strong in 2000 against competing exporters of soybeans, corn, and poultry. [Andy Jerardo, 202-694-5323, ajerardo@econ.ag.gov] Next Update: January 25, 2000 END_OF_FILE