Farm Product Exports Almost Same as Last Year

April 27, 2000

The $22 billion October-February agricultural exports virtually are unchanged from last fiscal year, USDA reports. The trade surplus for February increased more than $100 million from January, but the cumulative surplus declined about $720 million, or 11%, as year-to-date imports increased $748 million or 5%.

Exports in February were 4% more than the month before as foreign demand for red meat, poultry, soybeans, tobacco and feeds rose. Wheat and corn lost export sales in February. Bulk commodity shipments were $471 million less than fiscal 1999 on a year-to-date basis. All bulk commodities posted declines, led by wheat. In volume, bulk shipments increased 4.7% as corn, soybeans and cotton all posted gains.

Larger shipments of corn, up 528,000 tons, have not been sufficient to offset lower corn prices, USDA says. Cumulative export value of $1.9 billion slipped by close to $80 million from last year. Volume shipments to Mexico and South Korea show the largest declines. China’s corn exports are displacing U.S. sales in South Korea. In Mexico, import permits allotted to farmers have been lagging, and sorghum imports from the United States have substituted as feed.

Wheat exports of $1.3 billion from October-February are significantly lower in value and volume compared with 1999. The overall decline in export volume is 578,000 tons. Volume shipments to Asia and Latin America declined as demand from China, Japan, and Indonesia fell. Competing supplies from Australia and Argentina are partly responsible along with increased production in China.

Cotton exports are reduced significantly -- $685 million compared with $800 million in 1999. Even a 10% cumulative increase in volume shipments to 581,000 tons was not enough to overcome lower cotton prices. Larger shipments to Southeast Asia and Turkey are being countered by smaller shipments to Mexico and East Asia.

Part of the reason for larger shipments in late 1999 was the year-end expiration of Step 2 marketing loan payments. Also, last year's drought-diminished crop is still being shipped.

While year-to-date soybean exports of $2.8 billion are about equal to last year, higher volume shipments, which increased 1.6 million tons, were needed to offset lower prices. Larger shipments to the European Union (EU) and Asia more than offset lower sales to Central America, which so far has imported more soybeans from South America.

Because of the euro's weakness against the dollar, import costs are favoring U.S. soybeans over soybean meal sales to the EU.

A $500-million year-to-date increase in high-value product (HVP) exports has offset lower bulk export sales. Increasing foreign demand for red meat, poultry, hides, sugar, and vegetables is keeping the U.S. farm trade balance positive.

Higher red meat sales to Mexico, Canada, Japan, South Korea, and Russia are behind the $567 million increase in U.S. meat exports. Larger sales of poultry meat to Russia, Hong Kong, and Mexico are also credited with helping push HVP exports up.

Despite the decline in noncompetitive imports of coffee, cocoa, bananas, and rubber, competitive imports of $12.7 billion surged $803 million compared with last year. Meat and animal imports lead the increase followed by wine and beer, then nuts.

The report says these income-sensitive imports are responding to Americans' overall consumption growth. In contrast, imports of grains and oilseeds have shrunk. Lower prices of noncompetitive tropical imports are largely responsible for reduced value of these imports.

The entire report is available here.