U.S. AGRICULTURAL TRADE UPDATE                         April 25, 2000
April 2000, ERS-FAU-40
            Approved by the World Agricultural Outlook Board
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U.S. AGRICULTURAL TRADE UPDATE is published monthly by the Economic 
Research Service, U.S. Department of Agriculture, Washington, DC 
20036-5831.
 
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Summary-The $22 billion October-February U.S. agricultural exports
are virtually unchanged from last fiscal year. While the trade
surplus for February is up more than $100 million from January, the
cumulative surplus is down by about $720 million, an 11-percent
decline. The reason is that year-to-date imports are up $748
million, a 5-percent jump.

February's exports gained 4 percent from January as foreign demand
for red meat, poultry, soybeans, tobacco, and feeds rose. Wheat and
corn lost export sales in February.

Exports-Bulk commodity shipments are $471 million below fiscal
1999's year-to-date value. All bulk commodities are posting
declines, led by wheat. In volume, bulk shipments are up 4.7
percent as corn, soybeans, and cotton all gained.

Larger shipments of corn, up 528,000 tons, have not been sufficient
to offset lower corn prices. Cumulative export value of $1.9
billion has slipped by close to $80 million from last year. Volume
shipments to Mexico and South Korea show the biggest declines.
China's corn exports are displacing U.S. sales in South Korea. In
Mexico, import permits allotted to farmers have been lagging, and
sorghum imports from the United States have substituted as feed.

Wheat exports of $1.3 billion from October to February are
significantly lower in value and volume compared with 1999. The
overall decline in export volume is 578,000 tons. Volume shipments
to Asia and Latin America declined as demand from China, Japan, and
Indonesia fell. Competing supplies from Australia and Argentina are
partly responsible, along with increased production in China.

Cotton exports are significantly reduced--$685 million compared
with $800 million in 1999. Even a 10-percent cumulative increase in
volume shipments to 581,000 tons was not enough to overcome lower
cotton prices. Bigger shipments to Southeast Asia and Turkey are
being countered by smaller shipments to Mexico and East Asia. Part
of the reason for larger shipments in late 1999 was the year-end
expiration of Step 2 marketing loan payments. Also, last year's
drought-diminished crop is still being shipped.

While year-to-date soybean exports of $2.8 billion are about equal
to last year, higher volume shipments, up 1.6 million tons, were
needed to offset lower prices. Larger shipments to the European
Union (EU) and Asia more than offset lower sales to Central
America, which so far has imported more soybeans from South
America. Because of the euro's weakness against the dollar, import
costs are favoring U.S. soybeans over soybean meal sales to the EU.

A $500-million year-to-date increase in high-value product (HVP)
exports has offset lower bulk export sales. Rising foreign demand
for red meat, poultry, hides, sugar, and vegetables is keeping the
U.S. farm trade balance positive. Higher red meat sales to Mexico,
Canada, Japan, South Korea, and Russia are behind the $567 million
rise in U.S. meat exports. Larger sales of poultry meat to Russia,
Hong Kong, and Mexico are also credited with helping push HVP
exports up.

Imports-Despite the drop in noncompetitive imports of coffee,
cocoa, bananas, and rubber, competitive imports of $12.7 billion
surged $803 million compared with last year. Meat and animal
imports are leading the rise, followed by wine and beer, then nuts.
These income-sensitive imports are responding to Americans' overall
consumption growth. In contrast, imports of grains and oilseeds
have shrunk. Lower prices of noncompetitive tropical imports are
largely responsible for reduced value of these imports. [Andy
Jerardo, 202-694-5323]

In terms of penetration and intensity, U.S. agricultural exports
are highly competitive in world markets. Despite having only a
13-percent share of world export value in farm products in 1998,
U.S. export penetration as measured by market share exceeded 13
percent in half of its major markets. These 41 major markets
represent 93 percent of total U.S. export value (see Table A). A
strong "gravity" factor accounts for larger market shares in
geographically closer countries. U.S. export intensity, as shown in
Table B, also reflects high relative competitiveness in more than
half of these countries. More than 80 percent of U.S. agricultural
export sales in fiscal 1999 were in these export-intensive markets.
(See article following page 4.)

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