Agricultural exports set a slower pace

AgExporter, March, 1999 by Ernest Carter

Beset by sagging Asian demand, plummeting prices, a strong dollar and intense competition, U.S. agricultural exports retreated for the second straight year in fiscal 1998 (Oct. 1, 1997-Sept. 30, 1998). When final results were in, the value of U.S. farm and food product shipments to foreign markets totaled $53.6 billion, off 6 percent from 1997 and the weakest showing in four years.

Compared with 1996's peak of $59.8 billion, exports have now fallen 10 percent or $6 billion, with recovery not yet in sight. The current year is shaping up as the third in a row of decreasing sales.

Even with the downturn, fiscal 1998 featured some pluses. The U.S. share of global trade apparently held steady from the previous year, and there were new export records for a number of value-added products and a few leading markets. As a result, export value was still nearly $10 billion above any figure prior to 1995, when sales first jumped above $50 billion. Over the last 4 years, U.S. agricultural exports averaged $56.3 billion, up from $41.7 billion for 1991-94.

Wood and fish products fared generally worse than agricultural products in 1998, with export value declines of close to 20 percent. Combined U.S. exports of agricultural, wood and fish products totaled $61.8 billion, down from $67.4 billion in 1997.

Agricultural imports last year continued their record pace, climbing to $37.0 billion. Despite the combination of lower exports and higher imports, U.S. agriculture recorded its 38th straight annual trade surplus at $16.6 billion.

Bulk Agricultural Exports Off 14 Percent

Bulk commodities took a hard hit in fiscal 1998. In year-over-year product comparisons, minuses outnumbered pluses 2 to 1, often reflecting both weaker prices and lower tonnages shipped. Exports were down 14 percent overall to $20.9 billion. Besides Asia's economic woes, soybeans were jinxed by a record South American crop that followed a bumper U.S. harvest. Corn also faced more competition - from Argentina and China, for example. Wheat volume was up, buoyed by sales to Egypt, but anemic prices undercut export value. For cotton, record sales to Mexico were not enough to offset a sharp drop to China. Rice-bolstered by production shortfalls elsewhere-bucked the general downward trend, as did pulses.

                         FY         FY         1997-98
                        1997       1998         change

Commodity                - $ million -         Percent

Soybeans              (*)6,950     6,117         -12
Coarse grains            6,921     4,990         -28
Wheat                    4,124     3,772          -9
Cotton                   2,737     2,537          -7
Tobacco               (*)1,612     1,448         -10
Rice                       962     1,134          18
Pulses                     262       319          22
Peanuts                    233       203         -13
Other                      344       359           4

Total                   24,144    20,879         -14

* Denotes a record-high export value.

Exports of Intermediate Agricultural Products Down 2 Percent

U.S. exports of intermediate agricultural products held fairly steady overall at $12.1 billion, down less than 2 percent from the 1997 record. But it was boom or bust for many individual products. The oilseeds sector was a winner. Export values for soybean meal, soybean oil and other vegetable oils all rose to record levels, benefitting from increased shipments to key markets and reduced Malaysian palm oil production. Both tonnage and prices were up for animal fats, which got a boost from the higher veg oil prices and lower palm oil output. On the minus side, hides and skins took a beating as a result of weak Asian demand, especially from South Korea. Of the 11 major product groups, six recorded export value declines, while five chalked up gains in fiscal 1998.

                           FY          FY        1997-98
                          1997        1996        change

Commodity                   - $ million -       Percent

Feeds & fodder           1,928        1,676         -13
Hides & skins            1,673        1,338         -20
Soybean meal             1,746     (*)1,944          11
Veg. oils (excl.
soy oil)                   856     (*)1,027          20
Planting seeds          (*)924          835         -10
Sugar, sweeteners
& bev. bases               720          713          -1
Animal fats                514          627          22
Live animals               622          655           5
Soybean oil                516       (*)881          71
Wheat flour                139          115         -17
Other                 (*)2,686        2,312         -14

Total                (*)12,324       12,123          -2

* Denotes a record-high export value.

Consumer Food Exports Hold Near Record Level

For processed foods, beverages and other consumer-oriented agricultural products, 1998 broke a 13-year string of consecutive records. Although exports topped $20 billion for the third straight year, they were down slightly (less than 1 percent) from 1997. New records were set by processed fruits and vegetables, snack foods, dairy products, wine/beer and a few other product groups. However, weak Japanese demand and Asian competition took a toll on fresh fruit, while previously high-flying poultry exports began to feel the tug of Russia's financial crisis. Worth noting: Export value for consumer foods nearly matched that of bulk commodities, which used to reign supreme. Overall, consumer foods accounted for 38 percent of total U.S. agricultural exports in 1998, up from just 24 percent in 1990.