U.S. AGRICULTURAL TRADE UPDATE                         November 29, 2000
November 2000, ERS-FAU-47
            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 U.S. agricultural trade surplus in fiscal 2000 is $12 
billion, $175 million more than fiscal 1999. The $1.8-billion jump 
in cumulative exports to $51 billion from $49 in 1999 is 
instrumental in raising the annual surplus. Although imports are 
$1.6 billion more than in 1999, higher year-to-date exports starting 
in March 2000 pushed up the surplus. The cumulative balances from 
July to September 2000 all exceeded 1999s surpluses.

Exports--Bulk commodity exports in fiscal 2000 ended $19 million 
lower than in 1999 as cumulative declines in corn, wheat, rice, and 
tobacco offset gains in cotton and soybeans. Total bulk volume 
shipped, however, increased by 1.7 million tons from larger cotton, 
soybeans, and rice exports. Lower export prices account for the 
disparity.

Corn exports declined the most among bulk commodities compared with 
fiscal 1999s value--by $435 million. Total volume is also down 2.5 
million tons from last year as shipments to Mexico and Asia plunged.   
Nevertheless, volume exports to the Middle East, Africa, and Central 
America are higher than in 1999. Corn prices are the lowest in the 
past decade, almost half prices in 1996. World corn supplies and 
stocks remain large in 2000 despite a 3.8-percent jump in 
consumption. The surge in Chinas corn exports accounts for the 
reduced US sales in Asia.

Earnings from wheat exports fell by $270 million from 1999 as volume 
dropped 1 million tons. Shipments to Russia, Asia, and South America 
are all significantly lower. Export competition from Canada, the 
European Union (EU), and Australia are responsible for keeping wheat 
prices at very low levels in world markets. World supplies have not 
declined enough for wheat prices to reflect the rise in total 
consumption. The dollars higher exchange rate with respect to U.S. 
wheat markets and against competitors currencies exacerbates the 
situation.

The volume of soybeans shipped is up 13 percent, or 3 million tons, 
from 1999. But export earnings rose by only $323 million, or 7 
percent. U.S. sales are up due in part to the 6-percent rise in 
soybean prices from 1999. U.S. export earnings, however, are limited 
due to the 30-percent jump in combined volume exports by Brazil and 
Argentina. U.S. volume shipped to Taiwan, Japan, and Russia declined 
the most.

Cotton exports gained half a million dollars compared with 1999, 
boosted by 590,000 more tons shipped in fiscal 2000. U.S. markets in 
Turkey, Southeast Asia, and Latin America accounted for most of the 
gains. World cotton consumption outpaced production, causing exports 
to rise and stocks to fall. As a result, cotton prices inched up 5 
percent from 1999. While the dollars exchange rate against U.S. 
cotton markets is down slightly, it is significantly higher against 
competitors currencies.

Because of impressive export earnings of high-value products (HVP)-- 
$33 billion in fiscal 2000, total U.S. farm exports registered a net 
3.6-percent gain. The surge in HVP exports in the second half of the 
year boosted year-to-date sales above 1999s, ending with an overall 
5.7-percent increase. The near $1-billion-larger export earnings 
from red meat sales made up more than half of total U.S. export 
gains. The other contributors to gains in HVP shipments include 
hides (up $371 million), feeds and fodders (up $244 million), then 
poultry and vegetables (up $200 million each).
 
Imports--The 4.3-percent rise in U.S. import value in fiscal 2000 is 
attributed to competitive imports. Noncompetitive imports--largely 
tropical products, are $32 million below 1999, due to lower coffee 
and cocoa prices. Despite a small rise in volume, the import value 
for fruits is down because of lower prices. Red meat and livestock, 
beverages, vegetables, and grains are the heavy gainers from the 
ravenous U.S. import appetite, which was fueled by the dollars 5-
percent increase in real exchange value from 1999. [Andy Jerardo, 
202-694-5323]

The top 3 US export markets for agricultural products are Japan, 
Canada, and Mexico, which together account for 46 percent of total 
export earnings in fiscal 2000. Exports to other East Asian 
markets--South Korea, Taiwan, China, and Hong Kong--sum to $7.3 
billion, larger than the EUs $6.4. U.S. exports to the EU declined 
from 1999.

The largest U.S. imports are from Canada and Mexico, totaling 35 
percent of overall U.S. import value in 2000. The import share from 
the EU grew to 21 percent from 19.5 percent in 1995, the result of 
the euros weakness against the dollar.

Next update: December 22, 2000.                            

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