U.S. AGRICULTURAL TRADE UPDATE March 26, 2001 March 2001, ERS-FAU-51 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 USDA order desk. Call, toll-free, 1-800-999-6779 and ask for stock # SUB-FAT-4030, $62/year. ERS accepts MasterCard and Visa. --------------------------------------------------------------------------- Summary--The $18.7 billion October-January U.S. agricultural exports are $880 million more than during the same period in fiscal 2000. This gain is entirely due to larger sales of high-value products. U.S. agricultural imports are for the fiscal year to date $300 million larger than a year ago. The cumulative trade surplus is $5.7 billion, up $580 million from last year. The January trade balance is the smallest monthly surplus so far this fiscal year. Exports--Bulk commodity exports of $6.5 billion to date are only marginally larger than in the same part of fiscal 2000 due to sales declines for wheat, corn, rice, and tobacco. Bulk sales have fallen each month since October 2000, as volume shipped has generally narrowed and as prices remained relatively weak. Down $181 million from 2000, October-January corn exports posted the largest decline among bulk commodities. Volume shipped fell 2.3 million tons as demand from South Korea, China, Japan, and South America slipped sharply. Export competition from China and Argentina is largely responsible for the smaller U.S. market share. In addition, Starlink concerns have slowed shipments to Japan. On the other hand, sales to Canada and Mexico are slightly higher to date. Average corn prices remain near 1999s low levels. Wheat exports of $1.1 billion are only slightly less than during the first 4 months of fiscal 2000. While wheat prices have recently inched up, volume shipped is close to half a million tons lower than last year. Shipments to Egypt, Pakistan, and the European Union (EU) showed the steepest declines. Export competition from Canada, the EU, Australia, and Argentina has boosted world wheat supplies. The volume of shipments to Japan, Nigeria, and Indonesia, however, managed to rise from last year. Soybean value and volume shipped both increased in October-January, in part due to a modest recovery of soybean prices. Despite increased exports by competitors Brazil and Argentina, world import demand has risen enough to support increased U.S. sales. While U.S. shipments to the EU have dropped 1.1 million tons thus far, larger shipments to China and Mexico more than offset declines elsewhere. The value of cotton exports is $78 million ahead of last year despite a marginal narrowing of volume shipped from October to January, as prices are modestly higher. Mexico, the largest customer of U.S. cotton, has imported 21,000 tons more thus far this year. The $844-million export gain to date in high-value products (HVP) is attributed in large part to strong overseas demand for hides and skins, feeds and fodders, and nuts. Also, gains in fruits, sugar and tropical products, vegetables, and poultry sales more than offset the loss thus far from red meat exports. Economic growth in Latin American and Asian markets, except Japan, remains high relative to the United States. HVP sales to Mexico and Canada are the early leaders. Imports--At $13.1 billion, indications of continued higher U.S. agricultural imports in the current year are evident. So far, gains have occurred in live animals, red meats, fruits, vegetables, and malt beverages. The strong U.S. dollar is a major factor boosting U.S. import demand. But, the backdrop of slowing domestic economic growth may yet affect 2001 imports. Canada, Mexico, Australia, and New Zealand are the principal sources of U.S. imported food. The value of coffee imports from Brazil, Colombia, and Mexico is down due to low coffee prices. [Andy Jerardo, 202-694-5323; ajerardo@ers.usda.gov] The share of agricultural products in total U.S. merchandise exports--6.7 percent in calendar year 2000--fell sharply from 9.8 percent in 1995. In 2000, all agricultural shares of total U.S. exports to major foreign markets declined from 1995, as well as from 1991 (see table 5). Export shares of U.S. farm products to the EU, China, and Mexico experienced the steepest declines from 1995. An important cause of these drops was the abundant world supply of farm commodities. Another was the high exchange rate of the U.S. dollar against the currencies of farm export competitors since 1997. Nevertheless, the agricultural share of total U.S. exports to Japan and China is still in double digits. The share of agricultural products in total U.S. imports of goods in 2000 also narrowed to 3.2 percent from 4 percent in 1995. The most significant changes were for imports from Mexico and the EU. In general, the share of agriculture in total U.S. trade shrank as both exports and imports increased in the past decade. Next update: April 24, 2001 END_OF_FILE