U.S. AGRICULTURAL TRADE UPDATE September 25, 2001 September 2001, ERS-FAU-57 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 U.S. agricultural trade surplus from October 2000 to July 2001 amounted to $11.8 billion, $2 billion more than the same period in fiscal 2000. Year-to-date exports of $44.6 billion are up $2 billion from last year as foreign demand for U.S. hides, feeds, and horticulture products continues to be strong. Year-to-date imports, on the other hand, contracted by $8 million from last year. Starting in April 2001, monthly exports and imports have fallen from the previous month's corresponding values. Exports--Bulk commodity exports for the fiscal year to date are $91 million less than in 2000, dropping to $14.9 billion. In volume, the drop equals 1 million tons--from 94.5 to 93.4. Lower sales of corn, rice, and wheat more than offset gains in soybeans, cotton, and other feed grains. Wheat exports to date are down $58 million from 2000, and volume is down 1.4 million tons. The 20.5 million tons of wheat shipped thus far in 2001 are worth $2.64 billion, compared with $2.7 billion in 2000. World production of wheat in 2000/01 fell as producers in the United States, China, and Australia harvested a smaller crop. Wheat prices are rising to levels reached before sharp declines in 1999/2000. Shipments to Egypt have fallen the farthest to date--by $86 million, followed by the European Union (EU)--by $57 million, then Russia--by $44 million. The $190-million drop in corn exports thus far in 2001, from $3.8 billion in 2000 to $3.6 billion, as well as 1.1 million tons less in volume shipped, is partly the result of China's larger corn sales in Asian markets. Strong import demand from Canada, however, mitigated the U.S. sales loss in Asia. Also, shipments to Mexico and Egypt partly offset sales declines in the Middle East, South America, and Russia. Corn prices remain low despite smaller production. Exports of soybeans are close to $4.7 billion in the year-to-date, a $202 million gain from 2000. Volume is up 1.5 million tons to 24.5 from 23 million tons. World soybean production in 2000/01 expanded significantly in the major producing and exporting countries--the United States, Brazil, and Argentina. Thus soybean prices remain depressed at levels lower than in the past year. Shipments to China and Mexico more than offset declines in the EU and other East Asian countries. The weak world economy has reduced demand for cotton. World cotton production in 2001/02 is expected to expand significantly, and cotton prices have plummeted in response. Nevertheless, U.S. cotton exports to date are up $112 million from 2000, and volume is virtually unchanged. Sales to South Asia, South Korea, Mexico, and Canada make up the bulk of U.S. export gains. Underlying the year-to-date overall U.S. export gain is the $2.1 billion sales increase in high-value products (HVP). Although lower sales are recorded for red meat and vegetable oils, impressive gains are posted by live animals, poultry, dairy products, feeds and fodders, and notably by hides and skins. Exports of hides and skins to China and South Korea alone increased HVP sales by almost $300 million. Strong sales of sugar and products, fruits, and nuts further boosted total HVP exports. Imports--The $240-million decline in U.S. agricultural imports in the year-to-date is largely due to lower value and volume of U.S. coffee, cocoa, and rubber imports. Imports of nuts and vegetable oils are down as well. Nevertheless, imports of live animals, red meats, vegetables, grain products, and wine offset much of the declines in tropical product imports. [Andy Jerardo, 202-694-5323, ajerardo@ers.usda.gov. China's accession to the World Trade Organization (WTO) raises the prospect of larger U.S. wheat exports to that market, especially the higher protein varieties. Since 1995, U.S. farm sales to China ranged from $1 billion to $2.4 billion. Soybean shipments to China more than doubled from 1998 to 2000, but exports of soybean meal and oil slipped to zero or near zero as domestic crushing capacity expanded. Hides and skins are the next largest U.S. export to China. As per capita income in China grows, import demand for high-value products such as red meat, fruits, vegetables, and processed food is likely to rise, as in Taiwan and Hong Kong. Corn and soybeans lead U.S. exports to Taiwan. Poultry meat is the largest U.S. export to Hong Kong. (See table 5.) Next Update: October 24, 2001 END_OF_FILE