Agricultural Trade Turns a Small Corner

September 28, 2000

For the second consecutive month, the cumulative U.S. agricultural export surplus is slightly greater than last year, at $9.7 billion, after running below year-ago levels for the first eight months of the fiscal year. Although July 2000 exports declined $223.8 million from June, July imports declined more, $307.8 million, raising the gap between exports and imports fractionally.

Through July, both U.S. exports and imports showed increases. Exports equal $42.6 billion, a 3.5% gain over 1999. And imports increased 4.3% to $33 billion.

Cumulative bulk product exports -- wheat, rice, feed grains, soybeans, cotton, and tobacco -- remain less than last year at $15 billion, down 1%. Both value and volume of cotton and soybean

exports are above the previous year, but, wheat and corn continue to lag behind last year's export pace.

At $2.7 billion, October-July wheat exports are $295 million less than 1999, while volume is 1.6 million tons behind 1999. World import demand continues firm as consumption exceeds production. However, world stocks remain relatively high, particularly among export competitors, keeping prices low. U.S. wheat exports in July slipped 159,000 tons from June.

Although July's U.S. corn exports increased 234,000 tons from June, the 39.5 million tons of corn exported in the year-to-date remains 7% less than last year. Cumulative corn export value is down 9.5% to $3.8 billion. Despite increasing global demand, 1999-2000 production gains in both importing countries and competing exporters are increasing export competition this year. And large global stocks continue holding prices down.

Fiscal 2000 soybean exports remain strong, having gained 10% in value and 18% in quantity already in the year-to-date. Soybean export value equals $4.5 billion, and volume is up to 23

million tons. China's decision to import substantially more soybeans in 2000 to supply domestic mills has been responsible for most of the growth. However, overall global import demand also is increasing somewhat.

The other bright spot among bulk commodities is cotton. At $1.6 billion and 1.3 million tons exported already this year, U.S. cotton exports are up 33% in value and 64% in volume over

last year. Global import demand is up as world consumption exceeds production. Much of the growth in global consumption demand is in China where production has declined more than consumption has increased.

At $28 billion, exports of high-value products (HVP) are 5.8% greater than in the first 10 months of last year. Meat and poultry and hides and skins lead these gains, increasing by $1.1 billion and

$278 million in the year to date. Poultry exports to Russia have recovered from the 1998-99 downturn. Rising prices for beef and pork also support a modest gain in meat value. Improving global economic growth, especially in major Asian markets, is boosting hide and skin exports. Exports of dairy products, live animals, animal feeds, and vegetables also are up.

The $1.4 billion gain in year-to-date U.S. agricultural imports largely is occurring in meats and poultry and live animals. Malt beverages and wine also continue to show strength. Meat and

poultry imports are up $529 million, or 20.4%, so far this year, while live animal imports have risen $298 million, or 24.4%. These imports come primarily from Canada, Australia, and New Zealand.