U.S. AGRICULTURAL TRADE UPDATE February 29, 2000 February 2000, ERS-FAU-38 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 January-December 1999 were $48.3 billion, 7 percent and $3.5 billion below 1998's value. Imports for the same period were $38 billion, an increase of $800 million. This brings the U.S. trade surplus down from $14.8 billion in 1998 to $10.3 billion in calendar 1999, the smallest surplus in the past decade. Exports of $4.4 billion in December were more than $220 million lower than the previous month. In contrast, imports were up $182 million, which brings the December trade surplus down to $1 billion from $1.3 billion the previous month. Exports-More than half of the $3.5-billion decline in total export value in calendar 1999 was due to lower bulk commodity exports, which declined by almost $2 billion from 1998. High-value exports, which were almost twice as large as bulk exports in 1999, fell 5 percent, or by $1.6 billion. Cotton exports, in value and volume, declined the most among bulk commodities, and only corn gained from 1998. With the largest export value among bulk commodities, corn shipments amounted to almost $5 billion in calendar 1999, a gain of $500 million from 1998. Volume shipments were 52 million metric tons (mmt), up almost 11 mmt. The larger percentage rise in export volume than value reflects the 11-percent decline in corn prices from 1998. Corn prices at U.S. Gulf ports averaged $2.29 per bushel in 1999, the lowest since they fell below $2 in 1987. Most export gains were in Egypt, South Korea, and Taiwan. Soybean exports of $4.5 billion in 1999 are the next largest in sales among bulk commodities. This value, however, is $318 million less than in 1998 despite a 14-percent rise in volume shipments to 23 mmt. A $45 drop in price per metric ton from 1998 is the reason for the lower export value. The $200 average price per metric ton in 1999 is the lowest over the past two decades. Export gains were largest in Taiwan and Southeast Asia. Wheat exports in 1999 were valued at more than $3.5 billion, a 4-percent fall from 1998. Because volume shipments of 28 mmt were up 5 percent, lower wheat prices were responsible for the decline in value. The average price for wheat was only $3.05 per bushel in 1999, 11 percent below 1998 prices, and equaled 1987 prices. The only major market where exports increased was Russia, the principal recipient of U.S. food aid last year. Exports of cotton totaled less than $1 billion in 1999, in sharp contrast to more than $2.5 billion in 1998. The drop in cotton export value is attributed only in part to lower export prices. Cotton prices in 1999 were the lowest since 1986, and 21 percent below 1998 prices. The primary reasons for the export drop include the 25-percent fall in U.S. production due to drought, the suspension of Step 2 payments to U.S. cotton farmers, and competition from China. Unlike the other bulk exports, the volume of cotton shipments also fell-by over 900,000 metric tons. Exports of high-value products decreased in value from 1998. While the 5-percent decline is only half the 10-percent fall in bulk export value, the earnings declines are not much different. By far, poultry exports registered the largest retreat in value, followed by nuts, feeds, and hides. Lower worldwide demand due to currency devaluations is partly responsible. Asia, Latin America, and Europe shared almost equally in lower U.S. sales. Red meats posted the largest export gains (up $311 million), followed by vegetables (up $75 million), then sugar (up $50 million). Imports-The 2-percent rise in imports over 1998 were from competitive products, including red meats (up $400 million), grains (up $144 million), fruits and juices (up $570 million), nuts (up $130 million), vegetables (up $208 million), and beverages (up $560 million). The almost $800-million increase in total imports in 1999 is attributed to the 4-percent growth of the U.S. economy and the dollar's high exchange value. Import gains were largest from Brazil, followed by Canada, Mexico, Chile, India, and Australia. [Andy Jerardo, 202-694-5323] Exports boost the U.S. economy. Production from more than a third of U.S. cropland moved into export channels. Each dollar in agricultural export earnings in 1998 generated another $1.30 in supporting activities for a total of $120 billion (see report and table 5). An estimated 808,000 full-time jobs, including 488,000 in the nonfarm sector, were related to agricultural exports in 1998. [Bill Edmondson, 202-694-5374] Next Update: March 24, 2000 END_OF_FILE