U.S. AGRICULTURAL TRADE UPDATE May 25, 2001 May 2001, ERS-FAU-53 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 $8.5 billion October-March U.S. agricultural trade surplus is almost $1.5 billion ahead of the same period last year. U.S. export value thus far in fiscal 2001 is $28 billion, $1.4 billion above 2000 and the largest since 1998. Imports are almost $20 billion, but $81 million lower than in fiscal 2000. The March 2001 trade surplus of $1.4 billion exceeds the surpluses in March of the past 3 years. Exports--Bulk commodity exports are up both in cumulative value and volume as gains in value and volume of soybeans and wheat, and cotton value offset declines in corn, rice, and tobacco value and volume. At more than $10 billion, bulk exports are $232 million ahead of last year, and shipments of 62.5 million tons are 551,000 tons higher. Following a 2-year upward trend, bulk exports in March are the biggest monthly value since December 1998. The $408--million gain to date in soybean exports, 12 percent higher than in 2000, is attributed to larger shipments to China and Mexico. Despite sales declines to the European Union (EU), South Korea, Taiwan, and Japan, total volume of 20 million tons shipped is 2.2 million tons greater than in the same period last year. As of March 29, commitments from foreign buyers for an additional 2.9 million tons through August have been recorded. Nevertheless, soybean prices through March have dropped from 2000. Helped by higher wheat prices, U.S. wheat exports to date are up 4.4 percent, or $69 million, from the same period in fiscal 2000. Volume shipped is also up 190,000 tons as sales to Indonesia, Nigeria, and Latin America are ahead of last year. Competition for world market share from Argentina over the last 5 years is hurting sales by other exporters, especially as import demand turned weaker in 1997-98. Argentine wheat exports have doubled in the past 5 years as production expanded by 50 percent. Despite continued strong world corn production and import demand, U.S. corn exports to date have dropped from last years pace. Corn shipments are down $140 million thus far, and corresponding volume is off by 1.7 million tons. As in the wheat market, Argentina has gained on competitors in the world corn market. U.S. corn sales to South America, Asia, Africa, and the Middle East all are off sharply in October-March. Only Mexico significantly increased purchases of U.S. corn, in part due to less U.S. supply of sorghum. Cotton exports inched higher in value despite smaller volume shipped in the year-to-date. Cotton prices recently slipped, reversing a modest recovery in the second half of 2000. As world cotton production remains high relative to import demand, sales opportunities for cotton have narrowed. U.S. volume shipments to markets in Asia, Latin America, and the Middle East are down almost 100,000 tons to date. The U.S. export gain so far in 2001 in high-value products is $1.2 billion, on sales of $18 billion through March. Although this export value is only 80 percent larger than that for bulk commodities, the cumulative export gain is more than five times as large. Leading the export pace are hides and skins (up $280 million), feeds and fodders (up $176 million), and fruits and nuts (up $289 million). Although the U.S. dollars exchange rate is even higher than last year thus far, import demand from Asian countries, and to a smaller extent from the EU, remains robust. Imports--U.S. agricultural imports are down from last years value. The decline in imports of noncompetitive farm products--coffee, cocoa, and rubber--is due mostly to low prices. This is offset by larger imports of foreign horticultural products, animals, and red meat. U.S. purchases of foreign-grown vegetables are $260 million higher to date, led by tomatoes. Imports of malt beverages are fast approaching the level of wine imports. [Alberto Jerardo, 202-694- 5323; ajerardo@ers.usda.gov] Export prices of U.S. agricultural foods and feeds remain largely unchanged since 1999. But over the past 2 years, world food prices are up 2.8 percent on average. Among U.S. bulk exports, only wheat prices increased significantly. Corn prices rose 2.5 percent from 1999. However, soybean and cotton prices are relatively flat, while rice and tobacco prices declined sharply since 1999. Among U.S. high-value exports, meat and poultry prices gained 13 percent, and prices for hides and skins jumped an impressive 35 percent in 2 years. On the other hand, vegetable prices fell 3.5 percent, and fruits and nuts prices are down 21 percent. (See table 5). Next update: June 27, 2001 END_OF_FILE