U.S. AGRICULTURAL TRADE UPDATE March 24, 2000 March 2000, ERS-FAU-39 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-The $17.8 billion October-January value of U.S. agricultural exports is almost $500 million less than the same period in fiscal 1999. This export decline, combined with larger imports, reduced the cumulative trade surplus to less than $5 billion, which is $1 billion lower than its 1999 counterpart. Exports in January 2000 were almost $200 million below December 1999's value. Imports fell by $183 million, leaving the January trade surplus at $1 billion. Exports-Bulk commodity exports were largely responsible for the total farm export drop thus far in fiscal 2000. The $716-million decline in bulk shipments was accounted for by cotton, soybeans, and wheat. Nevertheless, exports of bulk products in January were up $4 million from December as rice shipments surged. Both export value and volume of wheat have fallen significantly thus far in the fiscal year, compared with 1999. The current export value of $1.1 billion is down 11 percent, while volume shipments have dropped by more than 550 million metric tons (mmt). Wheat prices, at record lows over the past decade, exacerbated the decline as other wheat exporters have flooded the world market. In addition, wheat demand by Japan, China, and South Korea was smaller. Among major world exporters, Canada, Australia, and Argentina have higher wheat production projected for 1999/2000. Cotton exports are also down sharply in fiscal 2000 by $233 million. This is due to smaller volume shipments, 14 percent lower thus far (except linters). Export prices are at record lows for the past decade. Volume declined the steepest to Mexico followed by East Asia. Larger exports from Uzbekistan, the African Franc Zone, and Australia are behind the world's abundant cotton supply. Soybean exports are down by close to $200 million in cumulative value despite higher volume shipments. More than 600 million tons over last year have been shipped thus far. While recent export prices have inched up from last summer's low levels, they are still depressed. Demand from Latin America and the European Union for U.S. soybeans has shrunk as South American export sales continue at high levels. While year-to-date volume shipments of corn are up by more than 600 million tons in fiscal 2000, export value is down, but by only 4 percent. And even though export prices have recovered somewhat recently, larger exports by China and Argentina are displacing out U.S. exports. Significantly lower U.S. sales to Mexico, South Korea, and Japan have recently undermined corn's notable export gains in fiscal 1999. Exports of high-value products (HVP) are ahead of last year's pace by $233 million, offsetting a third of the cumulative decline in bulk commodity exports. Red meats are providing more than their share in export earnings, up by $373 million. Poultry, hides, vegetables, and sugar products shored up U.S. HVP exports by more than $200 million. However, vegetable oils, fruits, and nuts are behind last year's pace. Russia, East Asia, and Southeast Asia are the leading markets for U.S. animal products so far this fiscal year. Imports-Agricultural imports are up by more than half a billion dollars in the October-January period. Strong U.S. import demand for animals, red meats, fruits, nuts, wine, and malt beverages are behind the surge. Driving this demand is U.S. per capita income, now above $30,000 per year, up 5 percent from 1998. The purchasing power of the dollar is also up by 15 percent from 1997. However, the import value of coffee, cocoa, and rubber is down in spite of higher volumes because prices remain low. [Andy Jerardo, 202-694-5323, ajerardo@ers.usda.gov] Exports to the North America Free Trade Agreement (NAFTA) accounted for more than a quarter of total U.S. farm export value in fiscal 1999. NAFTA partners' market share doubled over the past decade. Vegetables were the largest exports to Canada, followed closely by grains in 1999. Among the fastest-growing exports to Canada were feed grains and grain products, totaling $1.2 billion in 1999. Grains led exports to Mexico, followed by oilseeds. The best export performers to Mexico were feed grains, wheat, soybeans, and vegetable oils, which amounted to $3 billion in 1999. Canada's overall market remains $1 billion larger than Mexico's. (See table 5.) Next Update April 25, 2000. END_OF_FILE