# Presentation: 777616

## Changes in FY ‘06 Forecast since May...Exports are raised and imports are lowered AgTrade Surplus raised to $3.5 billion

**Fiscal Year Trade Forecasts for**
**Ag, Fishery & Solid Wood Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- was released on August 23, 2006, 4pm EST
- Prepared by Foreign Agricultural Service/USDA

-   Initial 2007 Forecast...AgExports rise to record $72 billion,while imports rise to record $68.5 billionAgSurplus estimated at $3.5 billion

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

***Exports***

***Imports***

***Trade Surplus******   ***

- Horticultural products, corn and soybeans drive export growth in fiscal 2007.   A weaker dollar and reduced consumer demand slow import growth, but sales continue to rise on increased fruit, vegetable, and wine purchases.

- Record

- 62.4

**68**

- 57.7

**64.5**

**72**

**4.7**

**3.5**

**3.5**

**68.5**

## Key FY 2007 Commodity Changes

|  | Final
FY 2005 | 
FY ‘06
For. | 
FY ‘07
For. | 
06/07
Chg | 

Main Reasons |
| --- | --- | --- | --- | --- | --- |
| Hort. Prods ($Bil) | 14.875 | 16.7 | 18.4 | +1.7 | demand, $exrate, good supply |
| Corn ($Bil) | 4.742 | 6.0 | 6.8 | +0.8 | (+) price – dom. & for. demand |
| Soybeans ($Bil) | 6.980 | 6.1 | 6.9 | +0.8 | (-) competition; (+) demand |
|  |  |  |  |  |  |
| Wheat (mmt) | 26.406 | 26.5 | 25.0 | - 1.5 | (-) US crop; (+) Canada comp. |
| Soybeans (mmt) | 29.607 | 25.3 | 29.7 | +4.4 | (-) comp; (+) China demand |

**Key FY 2007 Commodity Changes**

- #1 Canada  +$1 billion to $12.4 billion (horticultural products, meats)
- #2 Mexico  +$800 million to $11.3 billion (corn, soybeans & meal, fresh fruit, meats)
- #3 Japan   +$200 million to $8.3 billion (feed grain prices, horticultural products, beef)
- #4 China   +$500 million to $7.5 billion (cotton, soybeans, broiler meat, fruit, tree nuts)
- #5 EU-25   Remains $6.6 billion
-  **Top Regional Mkt:  **WHemisphere at $30.2 billion (Asia 2nd at $26.3 billion)

***Compared to 2006 . . .***

***Top 5 Markets . . .***

## Export Outlook for Grain & Feed Products

**Export Outlook for Grain & Feed Products**

- Includes corn gluten feed/meal

- Revised FY 2006 Forecast:     $200 Million to $18.3 Billion

- Initial FY 2007 Forecast:  $19 Billion

**’****07p**

- Revised FY 2006 Forecast
*Key Developments*
-  Wheat & corn value raised $435 mil (smaller US wheat crop boosts unit value, less competition for corn)
-  Category redefined to exclude pulses, lowering exports by $375 mil
- Initial FY 2007 Projections
*Upside Developments*
-  Higher prices expected for all grains and strong demand for US corn
*Downside Developments*
-  US wheat volume down on a short crop & strong Canadian competition
-  Rice sales down due to lower production and higher prices
*Wild Cards*
-  Size of Southern Hemisphere wheat and corn crops

## Export Outlook for Oilseeds & Products

**Export Outlook for Oilseeds & Products**

**Excludes corn gluten feed/meal**

- Revised FY 2006 Forecast:     $100 Million to $10.2 Billion

- Initial FY 2007 Forecast:  $11.1 Billion

**’****07p**

- Revised FY 2006 Forecast
*Key Developments*
-  Reduced soybean competition from Argentine
-  Strong soybean meal demand from Mexico and Canada
- Initial FY 2007 Projections
*Upside Developments*
-  Soybean shipments rise due to continued growth in China import demand and limited growth In SAmerican production
*Downside Developments*
-  Reduced EU demand for soybeans
*Wild Cards*
-  South American & U.S. soybean production

## Export Outlook for Cotton

**Export Outlook for Cotton**

- Note:  FY ’05 and prior years based on U.S Census data; FY ’06 & ’07 forecasts based on WASDE MY forecast.

- Revised FY 2006 Forecast:     $300 Million to $4.9 Billion

- Initial FY 2007 Forecast:  Record $5.1 Billion

**’****07p**

- Revised FY 2006 Forecast
*Key Developments*
-  Shipping volumes to China remain high
- Initial FY 2007 Projections
*Upside Developments*
-  Continued strong import demand from China
-  World trade volume likely to remain high
*Downside Developments*
-  Smaller US crop in 2006
-  Stronger export competition from India
*Wild Cards*
-  How much the U.S. crop will decrease

- Record

## Export Outlook for Dairy, Livestock & Poultry

**Export Outlook for Dairy, Livestock & Poultry**

- Record

- Revised FY 2006 Forecast:     $400 Million to $13.2 Billion

- Initial FY 2007 Forecast:  Record $13.4 Billion

**’****07p**

- Revised FY 2006 Forecast
*Key Developments*
-  Rising broiler meat exports to Mexico & China/HK
-  Gains in beef sales to Canada & Mexico
-  Gains in cheese & whey exports to Canada, Mexico & Asia
- Initial FY 2007 Projections
*Upside Developments*
-  Rising beef sales to Japan
-  Pork & broiler meat export volume increases
*Downside Developments*
-  None
*Wild Cards*
-  Beef exports to Korea – will the BSE import ban be lifted?

## Export Outlook for Horticultural Products

- Record

- Revised FY 2006 Forecast:     $300 Million to $16.7 Billion

- Initial FY 2007 Forecast:  Record $18.4 Billion

**’****07p**

- Revised FY 2006 Forecast
*Key Developments*
-  “Horticultural products” redefined to include pulses, raising exports by $375 million
- Initial FY 2007 Projections
*Upside Developments*
-  Fresh fruits and vegetables- ample supplies with strong demand in major markets
-  Treenuts- strong domestic production and prices with continued international demand
*Downside Developments*
-  Wine sales and pulses remain flat
*Wild Cards*
-  Weather impacts on U.S. production

## Export Outlook for Fishery Products

**Export Outlook for Fishery Products**

***Forecasts are not official USDA estimates.***

_***Trade Balance***_
**FY 2005 deficit was $7.9 billion**
**FY 2006 deficit estimated at $9 billion**
**FY 2007 deficit estimated at $9.5 billion**

- Record

- Revised FY 2006 Forecast
*Key Developments*
-  The 2006 Alaska sockeye salmon harvest is down only 7% rather than the 18% forecast
- Initial FY 2007 Projections
*Upside Developments*
-  Exports to China and the European Union (both up 14 to 16% by value and quantity) continue to increase
-  Mackerel exports (up 77% by value and 66% by quantity over 2005 record exports) are expected to continue to increase
*Wild Cards*
-  Size of U.S. harvests of lobster, salmon, and other species

- Revised FY 2006 Forecast:  Unchanged at $4.0 Billion

- Initial FY 2007 Forecast:  Record $4.2 Billion

**’****07p**

## Export Outlook for Solid Wood Products

**Export Outlook for Solid Wood Products**

***Forecasts are not official USDA estimates.***

_***Trade Balance***_
**FY 2005 deficit was $17.9 billion**
**FY 2006 deficit estimated at $18.2 billion**
**FY 2007 deficit estimated at $18.3 billion**

- Revised FY 2006 Forecast
*Key Developments*
-  Exports to Mexico rise on strength of lumber and panel products
- Initial FY 2007 Projections
*Upside Developments*
-  China’s demand for hardwood logs, lumber & veneer for furniture production remains strong
-  Caribbean softwood lumber demand, especially treated lumber, remains strong reflecting hurricane-related rebuilding
*Downside Developments*
-  Softwood exports to Japan losing market share to China & Malaysia
*Wild Cards*
-  Impact of slowing US housing mkt

- Revised FY 2006 Forecast:     $100 Million to $6.1 Billion

- Initial FY 2007 Forecast:  $6.2 Billion

**’****07p**