US Ag Export Value Expected to Decline
Record yields, lower prices for some commodities, and overseas competition cited in new USDA report
WASHINGTON, DC - 11/26/04 - The US will cease to be a net farm product exporter for the first time since the late 1950s sometime during the end of the fiscal year that began October 1 (FY05), according to the US Department of Agriculture (USDA).
The agency's most recent annual forecast - the "Outlook for US Agricultural Trade" - revised its estimate of farm exports for FY05 downward to $56 billion, an amount matching the expected value of the year's agricultural imports.
The expected decline in the value of exports "reflects lower prices for wheat, corn, soybeans, and cotton that stem from record US crop production and increased foreign competition," according to a USDA press release.
Bulk exports, however, are expected to rise by 2.3 million tons over fiscal year 2004 (FY04).
Even though the FY05 export sale estimate is lower than the record $62.3 billion reported for FY04, if realized it would be the fifth-highest annual farm export figure, the USDA said.
USDA's previous estimate, issued in August, was for a $2.5 billion farm surplus in 2005.
Canada is expected to remain the top market for US farm products at $9.7 billion followed by Mexico at $8 billion and Japan at $7.7 billion. Sales to the European Union (EU) are projected to top $6.5 billion with $4.6 billion in products headed to China.
The estimated value of farm imports continues a 40-year upward trend, according to the USDA.
Much of the increase, it said, is the result of US demand for higher-value products such as essential oils used in food processing, snack foods, wine and beer, red meats, processed fruits and vegetables, and other grocery products, the report said.
A weaker dollar and rising household incomes raise the value of US food imports, the department said, with the European Union, Mexico, Canada, China, Indonesia, Brazil, and Australia tagged as the world's top exporters of food products to the US.
The next agricultural trade forecast is scheduled for release next February.
The full text of USDA's revised "Outlook for US Agricultural Trade" trade forecast is available at: http://www.ers.usda.gov/publications/so/view.asp?f=trade/aes-bb.
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