US Agricultural trade balance increases - April 2001

The USDA Economic Research Service has reported that the U.S. agricultural export value in the fiscal year-to-date rose to $23.3 billion, $1.2 billion ahead of last year. Although corresponding imports to date of $16.1 billion are also up compared with fiscal 2000, the growth of exports pushed the cumulative trade balance to $7.1 billion, $1 billion higher than last year.
calendar icon 10 April 2001
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Despite the decline in volume shipped, the value of bulk commodity exports continues its month-to-month increase, posting a cumulative $8.8 billion by February. This value is $309 million ahead of last year, mostly accounted for by larger soybean sales. The near 600-million-ton rise in Februarys soybean shipments over January reflects continued strong world demand.

In value and volume, wheat exports are higher in October-February than the same period in 2000. The 118,200-ton rise to date in volume shipped is matched by a $61.4-million gain in value. As wheat prices continued to inch up from last years low levels, the previous declines in year-to-date export values turned around in February. Increased wheat demand from Indonesia and Sub-Saharan Africa is behind part of the positive change in exports to date, which was enough to offset the sharp shipment cuts to Egypt and Pakistan.

While soybean export prices are only marginally higher than in 1999, world demand for soybeans appears rosier as China continues to import large quantities compared with the first 5 months of fiscal 2000. Also, shipments to Mexico more than offset continued import declines from the rest of Latin America. Overall, soybeans shipped to date are 1.6 million tons and $302 million ahead of last year. Continued high production rates in Brazil and Argentina have kept world soybean prices relatively low and contributed to U.S. sales losses in major markets, particularly the European Union (EU).

Corn exports are behind in year-to-date sales from 2000, falling by almost $200 million to $1.7 billion. Likewise, volume shipped plunged 2.3 million tons, an 11-percent drop thus far. While world corn production leveled off, competition for export markets has been intense. Chinas corn shipments to major Asian markets have supplanted U.S. sales to that region. Argentina, another large competitor, raised exports to Europe and other markets in Latin America. As a result of bountiful supply, corn prices remain about 40 percent off 1996 levels. U.S. sales opportunities have been further limited by a strong dollar.

Although cumulative cotton exports are 5 percent smaller in volume than the past year, export value has climbed $79 million, or 12 percent, thus far. The difference is accounted for by moderately higher prices over the past year. Mexico and South Korea have significantly increased imports of U.S. cotton compared with the first 5 months of fiscal 2000.

Exports of high-value products (HVP) have almost reached $15 billion in the year-to-date, setting a pace that is $900 million ahead of 2000. All major product groups are ahead of last year, led by hides and skins sales to China and South Korea. Shipments of feeds and fodders to Mexico are also up sharply. Only red meat exports, which are down $117 million, have not kept pace as sales to Russia and Japan are more than $200 million off last years pace. Poultry exports have hardly budged due to weaker demand from Asia.


U.S. imports of agricultural products expanded marginally in the year-to-date. Despite a $754-million jump in competitive imports--led by horticultural products, imports of noncompetitive commodities are down $621 million. Depressed prices of tropical products--coffee, cocoa, rubber--account for the lower cost of imported food. Together with the dollars high exchange value, U.S. food price inflation has been subdued, benefiting consumers.

Largely due to NAFTA, U.S. agricultural exports have shifted toward the Western Hemisphere over the past decade. In 2000, Canada, Mexico, and the rest of Latin America accounted for 36 percent of total U.S. export value, exceeding Asias 35 percent share and the rest of the worlds 29 percent. In 1995, the Western Hemispheres 25 percent share was far below Asias and the rest of the worlds shares. Since 1995, however, U.S. exports to markets outside the Western Hemisphere have declined sharply. Exports to East Asia, the EU, and to Eastern Europe and NIS were even lower in 2000 than in 1990. Japan remains the largest single market for U.S. farm products.
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