U.S. AGRICULTURAL TRADE UPDATE January 25, 2000 January 2000, ERS-FAU-37 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-November 1999 U.S. agricultural exports were nearly $44 billion, 7 percent less than the same period in 1998. Cumulative imports of $34.5 billion increased 2 percent from 1998. The year-to-date trade surplus dropped to $9.4 billion from $13 billion last year, a 28 percent decline. Exports in November of $4.6 billion were $109 million higher than the previous month while imports were $96 million more. The November export value is about the same as in November 1998 whereas imports rose by $273 million. Thus the $1.4 billion trade surplus in November is $315 million lower than in November 1998. Exports-Of the $3.1 billion year-to-date export decline in November, $1.5 billion was due to 9 percent less shipments of bulk commodities compared with 1998. This decline is steeper than the decrease in high-value exports in 1999. Among the bulk exports, cotton had the largest decline, in value and in percentage terms. Only corn increased in 1999, in volume and value. The 16-percent gain in cumulative corn export value from 1998 to 1999--$3.5 to $4.5 billion-was due to larger volume shipments since average corn prices (Gulf port) were 11 percent lower than in 1998. The quantity shipped was 11 million metric tons (mmt) more than last year as competition from China was weaker, but export prices for corn were the lowest since 1987. Year-to-date sales to Japan, South Korea, and Taiwan grew sharply as corn demand for feed use expanded in those markets. Although year-to-date wheat volume exports of 26 mmt were up 1.7 mmt from 1998, wheat export value was down $79 million. The reason is that wheat prices in 1999 were also lowest since 1987. Furthermore, the dollar appreciated 3.5 percent on average against currencies of major U.S. markets for wheat last year. Food aid shipments to Russia and sales to South America made up much of the gain in export volume. The increase in soybean volume shipments from 18 mmt in 1998 to 20 mmt in 1999 was not enough to offset the 19 percent fall in soybean prices. Thus the cumulative export value has declined $317 million in the first 11 months of 1999. Abundant supplies in world markets were exacerbated by the dollar's appreciation with respect to the currencies of U.S. competitors, primarily Brazil, despite the dollar's depreciation against most currencies of U.S. markets in 1999. While U.S. sales to East and Southeast Asia were noticeably up in 1999, sales to Europe, normally the major market, plunged 24 percent. The 64 percent drop in cotton export value from 1998 is accounted for by the 60 percent decline in volume shipments coupled with a 21-percent retreat in cotton prices. While the dollar depreciated in U.S. cotton markets in 1999, it appreciated against competitors' currencies. As a result, exports in the first 11 months of 1999 were only $800 million, in contrast to $2.2 billion in the same period of 1998. Shipments to Asia and Latin America suffered the most. Exports of high-value products (HVP), $29 billion in 1999, are 5 percent below 1998. Except for red meat, vegetables, and sugar products, the major HVP exports declined in value. There was a fivefold plunge in poultry sales to Russia. The loss of HVP sales to the European Union (EU) was most pronounced for hides, feeds, and nuts. Again, the dollar's competitiveness in U.S. HVP markets and against competitors turned worse in 1999. Imports-The modest gain in imports in 1999, from $34 to $35 billion, was largely accounted for by competitive imports-meat, fruits, vegetables, and wine. This rise in competitive imports was supported by the dollar's appreciation. Noncompetitive imports of coffee, cocoa, and rubber were down due to lower world prices. [Andy Jerardo, 202-694-5323, ajerardo@econ.ag.gov] U.S. agricultural exports have shifted closer to home. Canada and Mexico now account for more than a quarter of total U.S. export value, up from 17 percent in 1995 (see Table 5). Export shares to Asia and the EU are both down-19 from 26 percent, and 13 from 15 percent, respectively. Canada and Mexico, largely due to NAFTA, import a lot more U.S. meat, grains, oilseeds, and horticulture products relative to other regions. Japan's share of U.S. exports of meat, oilseeds, and horticulture products is lower in 1999. The EU's share of U.S. oilseeds exports has been cut in half. Next Update: February 29, 2000 END_OF_FILE