U.S. AGRICULTURAL TRADE UPDATE May 25, 2000 May 2000, ERS-FAU-41 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-Despite the increase in March of U.S. agricultural exports to $4.7 billion, the trade surplus shrank to $989 million, the lowest since August 1999. March imports climbed to $3.7 billion from $3.2 billion in February. While fiscal year-to-date exports are $26.8 billion, up from $26.2 billion in 1999, cumulative imports have risen almost $1 billion, to $19.8 billion. Thus, the year-to-date trade surplus is $353 million narrower than in 1999. Exports-Shipments of bulk commodities are $114 million less than the cumulative value in fiscal 1999, notwithstanding an increase of 3.3 million tons in volume. Exports in March were up $151 million over February--to $1.8 billion, the highest since December 1999. Soybean sales of $3.4 billion are up $203 million from last year. This surge is accounted for by an 18-percent jump in year-to-date volume shipments to almost 18 million tons. World soybean production is up, as Argentina and China harvested larger 1999/2000 crops. But, the European Union (EU) has purchased 900,000 tons more thus far and China has imported 1.4 million tons more. Export prices have recovered from last summer's lows to close to levels of January 1999. Still, prices are 25 percent lower than in 1997. Corn exports of $2.3 billion in fiscal 2000 are down $130 million from 1999. Volume shipped is only marginally higher. Sales to Mexico and South Korea are significantly lower, while Taiwan and Egypt have purchased larger amounts. Asian imports are almost back to the higher levels of the mid-1990's. Global consumption is up 10 million tons, primarily from Asia and the United States. Global production is down 18 million tons compared with last year, largely due to reductions in 1999/2000 China and U.S. output. Corn export prices also have risen to year-ago levels, but are still 42 percent below 1996 prices. Despite an increase in wheat exports in March, year-to-date sales are $156 million behind last year's. Shipped volume is down by 500,000 tons from 1999, as exports to Egypt, China, Indonesia, and Pakistan each are off by more than 100,000 tons. Wheat export prices have not recovered from average lows at year-end 1999. Prices in March are still half their 1996 levels. World import demand for wheat is firmer this year as global 1999/2000 production is down and consumption up. Nevertheless, the large stocks of competitors limit upward pressure on prices. Cotton exports are up sharply in March and are $57 million ahead of last year. Cumulative volume shipped is also considerably higher as demand from Turkey, Brazil, Indonesia, and Taiwan has soared. The biggest market for U.S. cotton is Mexico. Cotton export prices bounced up to year-end 1998 levels, but remain 37 percent below 1995 prices. World cotton consumption continues to rise, while foreign production fell, and U.S. production rose in 1999/2000. In contrast to the mixed picture for bulk commodities, exports of high-value products (HVP) are up $729 million thus far, led by red meat and poultry exports. Japan, South Korea, Russia, and Mexico are by far the largest importers. Exports of hides, vegetables, and sugar products also are contributing to higher HVP earnings. However, exports of nuts and preparations to the EU fell sharply. Imports-The close to $1-billion jump in U.S. agricultural imports thru March is due in large part to animal and red meat imports (up $564 million), followed by fruits (up $103 million), and beverages (up $200 million). Imports of tropical products are down $41 million, grains off $45 million, and tobacco slipped $74 million. World food prices remain relatively low, an average 34 percent below 1996 prices. [Andy Jerardo, 202-694-5323, ajerardo@ers.usda.gov] The U.S. increasingly exports and imports the same agricultural products. Over the past decade, intra-industry or intra-commodity trade has intensified for most major U.S. farm goods. Two-way trade at intensities higher than 90 percent, indicating the United States imports almost as much as it exports, characterizes recent years' trade in processed food, total food (including fish), fruits, juices, and vegetables (see table 5). Also, non-food products, red meats, dairy products, nuts, and tobacco show growing or recovering trade intensities of between 60 and 80 percent. In contrast, primary commodities such as grains, feeds, oilseeds, as well as poultry, have trade intensities of less than 50 percent since they are largely exported, but not imported. Note that the high exchange value of the dollar and strong U.S. economic growth from 1997 to 1999 generally encouraged imports and discouraged exports, raising trade intensities. END_OF_FILE