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Fiscal 1998 Outlook for U.S. Agricultural Trade
Agricultural Exports Forecast at $58.5 Billion, up $1.2 Billion From Previous Year
Summary
The fiscal 1998 forecast for U.S. agricultural exports is $58.5 billion, up $1.2 billion from 1997 and second only to the 1996 record of $59.8 billion. By the end of fiscal 1998, if projections are realized, agricultural exports will be $1 billion ahead of the pace needed to achieve the $65-billion goal in Export Vision 2000.
Increased exports of wheat, meats, and horticultural products account for most of the gain in total export value for fiscal 1998. The only major products expected to show a year-over-year drop in export value are soybeans and meal. U.S. export volumes for soybeans and products should rise due to strong foreign demand, however prices are down sharply reflecting a strong recovery in domestic and foreign oilseed stocks.
A large increase in sales to Latin America is forecast in fiscal 1998. Little change is expected for exports to Asia, Europe, Canada, the Middle East, and the Newly Independent States. The forecast for Asia reflects slower export growth to Japan and reduced prospects for U.S. exports due to the financial crisis. The adverse impact of this crisis on U.S. agricultural exports in 1998 is now conservatively estimated at $500 million.
Agricultural export volume is projected to reach 157.9 million tons in fiscal 1998, up 10.6 million tons from 1997 and about 12 million tons shy of the 1995 record. Major bulk commodities are projected to rise 8.8 million tons to 114.6 million tons as wheat, corn and soybean shipments rise.
Agricultural imports are projected at $38 billion in fiscal 1998, up $2.2 billion from the 1997 and a new record high. This increase represents a slower growth rate than the previous few years, and is mainly due to stabilizing coffee prices.
The U.S. agricultural trade surplus is projected at $20.5 billion in fiscal 1998, down $1 billion from 1997. The record remains $27.2 billion set in 1996.
Commodity Export Highlights
Fiscal 1998 bulk commodity exports are forecast to remain largely unchanged from the 1997 level of $24.1 billion. Rising wheat exports should fully offset lower soybean exports. No major changes are forecast for coarse grains, rice, cotton, tobacco, and other bulk commodities. In the case of corn and soybeans, lower prices should offset expected increases in export volumes. Compared to the previous year, the highlights for bulk exports in fiscal 1998 are:
Wheat exports are forecast to rise 4 million tons and about $250 million to 28.5 million tons valued at $4.4 billion. Rising export volume should more than offset weaker export prices. The larger U.S. wheat crop and larger ending stocks forecast for 1997/98, and less competition from Canada, Australia, and Argentina underpin this outlook.
Coarse grain exports are forecast to rise 2.1 million tons to 55.1 million tons, but lower prices for corn and sorghum should leave the value unchanged at $6.9 billion. Corn exports should rise 1.9 million tons and value remains unchanged at $6.1 billion. U.S. corn production and ending stocks should rise slightly in 1997/98, and less competition from Argentina is expected. Despite strong global demand, U.S. feed grain export volume remains constrained by Chinese corn exports (4 million tons in 1997/98) and European feed wheat exports. In addition to larger corn shipments, barley export volume should rise 140,000 tons on lower prices.
Soybean exports are forecast to rise 2.7 million tons to 26.7 million tons, however lower prices should reduce export value by $250 million to $6.7 billion. The expected price declines reflect the sharp recovery forecast for domestic and foreign oilseed stocks. A record 2,736 million-bushel U.S. soybean crop and continued strong foreign demand should support rising export volume. China's import demand for oilseeds and products remains strong, because little change in its domestic production is foreseen and its growing demand for protein meal and vegetable oils continues.
The 1998 export forecasts for rice, cotton, and tobacco indicate little or no change from the previous year, and do not significantly affect the overall export forecast.
High-value products reached record exports of $33.1 billion in fiscal 1997. Intermediate products and consumer foods each achieved record sales of $12.3 billion and $20.8 billion, respectively. High-value exports are forecast at $34.3 billion in fiscal 1998. Broad-based gains are expected, with large increases forecast for meats and horticultural products. Compared to the previous year, the 1998 export highlights for high-value products are:
Livestock and poultry products are forecast to rise $600 million to a record $11.4 billion. Beef and pork sales are forecast to rise 100,000 tons and $300 million to 1.5 million tons valued at $4.3 billion. This represents an improvement over the previous year, and is roughly equal to the record sales figure set in 1996. Beef export value is up largely due to higher prices, and pork export value is expected to increase some with higher volumes more than offsetting lower prices. The marked slowdown in beef export growth to Japan will enter its second year, while U.S. pork sales to Japan should rise following Taiwan's swine disease outbreak. U.S. poultry meat exports are forecast to rise 80,000 tons to 2.6 million tons valued $2.55 billion due to rising sales to Hong Kong and Russia. Table egg exports to Hong Kong should also rise.
Horticultural product exports are forecast to rise $600 million to a record $11.2 billion. Increases of up to $150 million each are anticipated for fruit, vegetable, and tree nut exports to record highs of $3.5 billion, $2.8 billion, and $1.4 billion, respectively. Essential oils, wine, and miscellaneous food preparations account for much the remaining gain. This outlook assumes sales to Mexico continue strong, steady growth to Japan and throughout Latin America continues, and USDA market promotion activities continue to support sales.
Top Export Markets
A large increase in U.S. agricultural exports to Latin America is forecast in fiscal 1998. Little or no change is expected for sales to Asia, Europe, Canada, the Middle East, and the Newly Independent States. Compared to the previous year, the 1998 export highlights are:
Agricultural exports to Asia (42 percent of the total) are forecast to fall $200 million to $23.6 billion, with a small gain in sales to Japan offset by declines to China and Southeast Asia. Exports to South Korea are currently expected to remain unchanged at $3.3 billion, but this could change as the financial crisis evolves. Sales to China are expected to drop $200 million to $1.6 billion reflecting a recovery in China's grain production. South Korea and the four major ASEAN countries (Thailand, the Philippines, Indonesia, Malaysia) caught up in financial crisis account for 10 percent of U.S. sales. The adverse impact from the financial crisis in these five countries on U.S. agricultural exports in 1998 is conservatively estimated at $500 million.
Substantial gains in agricultural exports to Mexico and other Latin American countries are forecast. Exports to Mexico are expected to rise $700 million to a record $5.8 billion. U.S. cattle, fruits, and animal feeds are likely to show the strongest gains.
Economic growth in Eastern Europe will support continued import growth, but most of these new opportunities will be captured by suppliers in western Europe. U.S. exports to the New Independent States (primarily Russia) are forecast to fall $200 million to $1.4 billion, due to increased enforcement of border measures and competition from local and regional suppliers.
U.S. agricultural exports to Canada, the European Union, and the Middle East are expected to remain largely unchanged. But sharp gains in exports to North Africa are expected with a recovery in U.S. grain sales to Egypt.
Import Highlights and Top Supplying Countries
U.S. agricultural imports are forecast at $38 billion in fiscal 1998, up $2.2 billion (6 percent) from 1997 and a new record high. Lower anticipated prices for coffee, fruits, and vegetables are expected to slow the pace of growth from that of the past several years. Compared to the previous year, the 1998 import highlights are:
Animal and product imports are forecast to rise $500 million to $6.9 billion. Red meats, imported mainly from Australia and New Zealand, are expected to rise 60,000 tons and $200 million to 1.2 million tons valued at $2.8 billion. Argentina will most likely fill its 20,000-ton beef quota for 1998.
Horticultural product imports are forecast to rise $1.7 billion to a record $14.4 billion, with growth spread across fruit, vegetable, and beer and wine sales. Imports of fruits and juices are forecast to rise $700 million to $6 billion, vegetables and preparations should rise $500 million to $4.1 billion, and wine and beer should rise $400 million to $3.5 billion.
Coffee imports are forecast to rise 80,000 tons to 1.3 million tons, but lower prices should lower total import value $300 million to $3.4 billion.
The 1998 import forecasts for grains and feeds and oilseeds and products indicate little or no change from the previous year, and do not significantly affect the overall import forecast.
Rising agricultural imports from Latin America, the European Union (EU-15), Canada, and Southeast Asia are expected to account for most of the gain in fiscal 1998. Little or no change is expected for Eastern Europe, the Newly Independent States, and other world regions. Compared to the previous year, the 1998 import highlights are:
Imports from Latin America, one-third of the total, are forecast to rise $700 million to
$12.7 billion. Imports from Mexico are expected to rise $300 million to $4.2 billion. Other major suppliers are Brazil, Columbia, and Chile. The major imports from this region are raw coffee and a wide range of fruits, vegetables (including preparations), and juices.
Imports from the EU-15, about 20 percent of the total, are forecast to rise $500 million to $7.4 billion. The major suppliers are Italy and France, although northern European suppliers are very important as well. The major imports from this region are wine and beer, olive oil, pastas, and confectioneries.
Imports from the Canada, about 20 percent of the total, are forecast to rise $400 million to $7.7 billion. The major imports are live animals, red meats, and highly-processed grain products.
Agricultural imports have risen in nine of the past 11 consecutive years, and a new record in 1998 is expected. Virtually all of the growth in imports is due to rising "competitive" product imports, and the average annual growth rate has risen to 10 percent since 1993. The major factors behind import growth over the past 15 years are:
the U.S. population increased 15 percent or 35 million since 1980)
rising per capita consumption of fruits and vegetables, in part due to increased demand for fresh products during winter months;
rising consumer demand for imported, luxury foods and beverages;
rising industry demand for ingredients used in processed foods and non-food items, which are consumed in the United States or exported; and,
rising consumer demand for non-European "ethnic" products.
Tables
U.S. Agricultural Exports: Commodity Values & Volumes, Fiscal 1996-98
U.S. Agricultural Export Value by Region
USDA trade forecasts on specific commodities are updated monthly through the publication, " World Agricultural Supply and Demand Estimates." For information on electronic access, call (202) 720-5446. For information on subscriptions, call 1-800-999-6779, 8:30 a.m. to 5:00 p.m. EST. For more information, contact Ernest Carter at (202) 720-2922 or carterew@fas.usda.gov .
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