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U.S. Agricultural Market Share Holds Its Own
October 1998
The adverse effects of the Asian financial crisis and a strong U.S. dollar–which makes U.S. products appear more expensive–battered U.S. agricultural exports in 1997/98. As a result, U.S. agricultural exports declined to $54.5 billion in 1997/98, with a further decline forecast for 1998/99.
The Asian troubles, combined with a strong competitive world markets, have sharply reduced demand in the United States’ biggest regional market. A strong dollar has made U.S. products more expensive relative to the competitors. Reduced export demand and strong domestic production have caused farm prices to drop sharply. Despite these problems, the United States has maintained its world market share, and remains well positioned to take advantage of opportunities for exports as our buyers’ economies improve.
1998 Review. Exports in FY 1998 fell to $54.5 billion, and are projected to fall an additional 5 percent, to $52 billion, in 1999. Despite the decline, it’s important to remember that the United States has managed to retain its share of the global agricultural trade pie: the U.S. world market share is forecast to remain at 19.5 percent in 1999. This is unchanged from 1997 and 1998, although it is down slightly from the 20 percent tally registered in 1996. As the world economy improves, import demand among our regular customers will increase, and the total of U.S. agricultural exports should gradually rise.
Global Crisis and Other Factors to Reduce
U.S. Exports in 1999 |
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Global U.S. Exports | Global U.S. Market Share | ||||||
| (billion $) | % Chg | (% of world exports) | Chg (1) | |||||
Commodity |
1997 |
1998f |
1999f |
98/99 |
1997 |
1998f |
1999f |
98/99 |
Total meat |
6.5 |
6.5 |
6.7 |
3 |
NA |
NA |
NA |
NA |
-- Beef |
2.4 |
2.4 |
2.5 |
4 |
17.0 |
18.0 |
18.0 |
0.0 |
-- Pork |
1.0 |
1.2 |
1.2 |
0 |
20.0 |
19.0 |
19.0 |
0.0 |
-- Poultry |
2.5 |
2.4 |
2.4 |
0 |
43.0 |
50.0 |
50.0 |
0.0 |
Grain & Feed |
16.5 |
14.0 |
14.0 |
0 |
NA |
NA |
NA |
NA |
-- Wheat |
4.2 |
3.7 |
4.1 |
11 |
27.0 |
28.1 |
31.0 |
2.9 |
-- Corn |
6.1 |
4.3 |
4.2 |
-2 |
70.4 |
58.7 |
65.0 |
6.3 |
-- Rice |
1.0 |
1.1 |
1.0 |
-9 |
12.1 |
12.7 |
13.1 |
0.4 |
Horticultural products |
10.6 |
10.6 |
10.6 |
0 |
17.2 |
16.9 |
16.7 |
-0.2 |
Cotton |
2.7 |
2.6 |
1.7 |
-35 |
25.6 |
28.7 |
19.0 |
-9.7 |
Soybeans & products |
9.2 |
8.9 |
7.4 |
-17 |
42.0 |
41.1 |
40.4 |
-0.7 |
Wood products |
7.5 |
6.2 |
6.2 |
0 |
21.0 |
20.0 |
20.0 |
0.0 |
Fish/seafood |
2.7 |
2.1 |
2.4 |
14 |
7.5 |
7.0 |
7.3 |
0.3 |
-- Salmon |
0.3 |
0.2 |
0.3 |
50 |
16.0 |
14.0 |
15.0 |
1.0 |
Total Agriculture (2) |
57.3 |
54.5 |
52.0 |
-5 |
19.5 |
19.5 |
19.5 |
0.0 |
(1) Denotes
change in market share percentage points |
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Outlook for 1999. Prospects for agricultural export growth are relatively dim in 1999. Future possibilities are hemmed in by ongoing chaos in global financial markets and recessions already underway throughout Asia and Russia, and uncertainty surrounding the economic outlook for Latin America. Despite the gloomy overall prospects, the United States should maintain its export share of most commodities.
U.S. meat exports are forecast to rise slightly in 1999, reaching $6.7 billion. This is due to higher projected beef prices and slightly increased shipments of pork and poultry.
The value of grain and feed exports is forecast to stabilize in 1999; increased export volume will offset reduced prices. However, the U.S. is expected to gain ground on competitors with export shares rising for wheat, corn and rice.
Horticultural product exports should hold their own; strong export gains to NAFTA trading partners Canada and Mexico are expected to offset declining sales to Asia. Slowing exports since 1996 have reduced the U.S. share of world trade from 17.2 percent to 16.9 percent; with a further marginal decrease expected in 1999.
The outlook for cotton exports is decidedly negative; both export volume and value are projected to decline owing to drought-related production shortfalls, strong domestic mill demand and increased global competition. Market share will drop to 20 percent.
The value of oilseed exports is projected to drop by one-sixth in 1999. Low world wide prices are affecting all exporters, and there has been below-normal growth in demand. Increased soybean product exports from Argentina and rapeseed product exports from Canada will contribute to the decline in U.S. exports and market share.
U.S. exports of wood products are expected to hold steady, as flat world wide demand, excluding the United States, and a strong U.S. dollar, leaves little room for growth. Sales to Asia will continue under pressure, but declines there should be partially offset by more favorable prospects in Europe and the North American market. U.S. share of world trade will remain stable.
U.S. exports of fishery products are expected to be up 14 percent from 1999 from the depressed levels projected for 1998. The U.S. should post a modest increase in market share of total fisheries exports, to slightly over 7 percent, although strong competition from countries, including Norway and Chile, will limit any significant gains in U.S. market share for the next two years.
For more information contact the author, Michael Dwyer, at (202) 720-3124.
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