# Presentation: 436460

## Fiscal Year 2009 Trade Forecasts
for Agricultural Products

**for Agricultural Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- Released on December 1, 2008, 4pm EST
- Slides prepared by Office of Global Analysis/FAS

- Summaries on all groups except tobacco, planting seeds, and sugar & tropical products

-   _Changes in 2009 Forecast Since August_AgExports lowered $14.5 billion to $98.5 billionAgImports lowered $2.0 billion to $81.0 billionAgSurplus equals $17.5 billion

-   Compared to FY 2008...AgExports down $17.0 billion from $115.5 billionAgImports up $1.7 billion from $79.3 billionAgSurplus down $18.6 billion from $36.1 billion

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

***Exports***

***Imports***

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

- In 2009, falling grain & oilseed volume and prices account for 70% of the $17-billion export loss.  Animal products & cotton exports also fall, but modest increase expected for horticultural products.  Import growth slows due to lower prices & weaker demand

- Record

- 79.3

- 82.2

- 70.1

- 115.5

- 36.1

- 81.0

- 98.5

- 17.5

- 59.8

- 49.1

- 27.3

## Summary Outlook for FY 2009 AgExports                               Global Grain Market:  Increased Competition & Reduced Imports  Global Recession:  Weaker Demand, Falling Prices, Stronger Dollar

*1) Developments in the Global Grain Market Undercut US Grain Exports*
-  huge wheat exports from EU, Russia and Ukraine & reduced import demand (EU)
-  US wheat & coarse grain export volumes down sharply; prices weaker
*2) Financial Crisis and Economic Slowdown Spread Around the Globe*
-  US financial crisis spreads to Europe/Russia (less impact elsewhere), credit mkts prove difficult to unfreeze, deleveraging financial institutions & households takes time
-  world growth slows to 1.0% in 2009 (2005-07 = 3.8%):  recession in US, EU, Japan & slower growth for all regions; emerging mkts slow from 7.3% (3-yr avg) to 4.8%
-  emerging mkts threatened as trade slows, commodity prices fall, & currency adjusts
-  but, fiscal policies can cushion downturn & many countries have large reserves
*Compared to 2008:  All Categories Decline Except Horticultural Products*
-  grain & feed (-) $10 billion to $28.3 billion – vol declines account for two-thirds
-  oilseeds (-) $4.5 billion to $18.4 billion – vol and unit value declines about equal
-  cotton (-) $800 million to $4 billion – 25% due to vol decline, 75% due to price drop
-  animal products (-) $1.7 billion – dairy (-) $900 million, broilers (-) $550 (vol & price)
-  hort. products (+) $700 million to record $21.5 billion – slowest growth in 6 years

**Summary Outlook for FY 2009 AgExports                          *****     ******Global Grain Market:  Increased Competition & Reduced Imports  Global Recession:  Weaker Demand, Falling Prices, Stronger Dollar***

## Export Outlook for Grain & Feed Products

- Includes corn gluten feed/meal

*Record*

- Revised 2009 Forecast
*Key Developments *
-  Huge exportable wheat supplies in Russia, EU & Ukraine pressure prices for wheat and feed grains
-  Despite intensified competition, US wheat export volume unchanged at 26.5 mil. tons, but remains 20% lower than FY 2008
-  Global corn trade reduced 6 mil. tons (14 mil. tons yr-to-yr) due to fierce competition from feed-quality wheat
*Wild Cards*
-  Southern Hemisphere (Australia/ Argentina) wheat and corn crops
-  Global meat consumption and its impact on feed demand

**Export Outlook for Grain & Feed Products**

- Revised FY 2009 Forecast:     $3.9 Billion to $28.3 Billion

## Export Outlook for Oilseeds & Products

**Export Outlook for Oilseeds & Products**

- Excludes corn gluten feed/meal

*Record*

- Revised FY 2009 Forecast:     $4.7 Billion to $18.4 Billion

- Revised 2009 Forecast
*Key Developments *
-  Revised export value for entire category due mostly to lower oilseed & product unit values
-  Strong early-season soybean sales to China raises export volume slightly to 27.8 mmt, but remains 3.1 mmt below last year because domestic supply is reduced
-  Reduced domestic crush limits soymeal and oil exports
*Wild Cards*
-  South American soybean production
-  China’s soybean demand

## Export Outlook for Cotton

_*Note*_  FY ’08 and prior years based on Census data; FY ’09 forecast based on WASDE MY forecasts

*Record*

**Export Outlook for Cotton**

- Revised FY 2009 Forecast:      $1.9 billion to $4 Billion

- Revised 2009 Forecast
*Key Developments *
-  US export volume lowered 455,000 tons to 2.8 mmt
-  Weaker consumer demand for textiles weakens cotton import demand and lowers prices
-  Reduced global consumption largely due to first annual decline in China’s consumption since 1998/99
-  Higher US ending stocks pressures prices
*Wild Cards*
-  Global economic uncertainty translates into uncertainty about demand and prices

## Export Outlook for Dairy, Livestock & Poultry

*Record*

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

- Revised FY 2009 Forecast:     $2 Billion to $20.4 Billion

- Revised 2009 Forecast
*Key Developments *
-  Pork lowered $550 mil. to $4 bil. due to reduced volume (China’s demand is lower)
-  Broiler meat lowered $300 mil. to $2.9 bil., on lower prices due to weaker foreign demand and uncertainty over Russia trade
-  Animal fats $300 mil. lower reflecting weakness in veg oils mkt
-  Dairy exports are lowered $500 mil. to $3.1 bil., due to falling global prices and some vol decline, esp. for nonfat dry milk
*Wild Cards*
-  Impact of economic slowdown on meat demand

## Export Outlook for Horticultural Products

**Export Outlook for Horticultural Products**

- Revised FY 2009 Forecast:     $1.2 Billion to $21.5 Billion

*Record*

- Revised 2009 Forecast
*Key Developments *
-  Expected global recession, slows export value growth rate to 3%, the slowest in 6 years
-  Highly-processed products, like essential oils and food preps, lowered $700 mil to $6.3 bil due to economic slowdown in major mkts
- Tree nuts & processed fruit & vegetables lowered $500 mil as Europeans and Japanese seek lower-priced alternatives
*Wild Cards*
-  Will fresh fruit and vegetable exports to Canada and Mexico remain strong?

## AgImport Growth Slows in FY 2009

*Imports lowered $2 billion from August to $81 billion              Forecast remains $1.7 billion above last year’s record $79.3 billion*
-  US economy contracts in 2009 (real GDP growth averaged 2.6% 2005-07)
-  Negative wealth effect with lower home values and falling stock market, unemployment heads toward 8%, and consumer spending contracts
-  Some relief from sharply lower oil prices; stronger dollar lowers import costs
*Key observations for FY 2009*
-  Import growth rate slows to lowest in years as volume gains level off, but no economy-related declines are foreseen
-  Lower prices for grains, oilseeds and products – combined value falls $800 million to $13.7 billion ($4.5-billion increase last year with higher prices)
-  Cattle and swine shipments sharply reduced, as reduced Canadian inventories and COOL implementation alter trade patterns
-  Horticultural imports lowered since August on weaker volume, but remains $1.4 billion above 2008 level as prices hold firm

**AgImport Growth Slows in FY 2009**

## Top Ag Markets and Ag Suppliers

**Top Ag Markets and Ag Suppliers**

***Top Ag Markets...                   Top Ag Suppliers...***