# Presentation: 665947

## Since August...AgExport Forecast Lowered $1.5 Billion to $56 BillionImports Raised $1 Billion to a Record $56 Billion,

**FY 2005 Export Forecasts for**
**Ag, Fishery & Solid Wood Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- was released on November 22, 2004 at 4pm EST
- Prepared by Foreign Agricultural Service/USDA

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

***Exports***

***Imports***

***Trade Balance   ***

- Large U.S. and foreign crops lower prices for grains, oilseeds, and cotton, and increased competition lead to sharply lower agricultural export value in 2005.  Exports balance with imports for the first time since the late 1950s.

**56.0**

- Record

**56.0**

**62.3**

## Key Changes in Export Projections for 2005

|  | 
Final
FY 2004 | Aug
FY ‘05
For. | Nov
FY ‘05
For. | 
04/05
Chg | 

Main Reasons |
| --- | --- | --- | --- | --- | --- |
| Corn ($ Bil) | 5.841 | 5.9 | 5.0 | -0.9 | (-)price, record US crop/large global supply |
| Soybeans ($ Bil) | 7.463 | 6.6 | 5.7 | -0.9 | (-)price, record US crop |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
| Wheat (mmt) | 31.148 | 25.0 | 25.8 | +0.8 | (-)competition, Canadian wheat |
| Corn (mmt) | 47.579 | 53.0 | 52.0 | -1.0 | (+)comp, Canadian feed wheat |
| Soybeans (mmt) | 24.447 | 28.0 | 27.5 | -0.5 | Minor adjustment |

**Key Changes in Export Projections for 2005**

***Commodity Projections – Changes from Aug to Nov***

- China -$1.5 billion to $4.6 billion (5th)
- Japan -$800 million to $7.7 billion (2nd to 3rd)
- Mexico -$400 million to $8 billion (3rd to 2nd)
- EU-25 -$300 million to $6.5 billion (4th)
-  **Top regional market: W Hemisphere exceeds Asia by $1.8 billion**

***Country Projections – Changes from 2004 to 2005***

## Export Outlook for Grain & Feed Products

**Export Outlook for Grain & Feed Products**

- Revised FY 2005 Forecast:     $1 Billion to $15.1 Billion

- Includes corn gluten feed/meal

- Revised FY 2005 Forecast
*Key Upside Developments*
-   U.S. wheat benefits from problems with Canadian wheat quality
*Key Downside Developments*
-  Large global supplies lead to low prices, esp. for feed grains
-  High freight costs dampen trade
-  Strong competition from Black Sea and EU-25
*Wild Cards*
-  Level of China’s corn exports and wheat imports
-  Competition from Southern Hemisphere new crop supplies

## Export Outlook for Oilseeds & Products

**Export Outlook for Oilseeds & Products**

- Excludes corn gluten feed/meal

- Revised FY 2005 Forecast:     $1.1 Billion to $8.8 Billion

- Revised FY 2005 Forecast
*Key Upside Developments*
-  Record U.S. soybean crop increases exportable supply
-  Short 2004 SAmerican soybean crop reduces competition in early ‘05
*Key Downside Developments*
-  Lower soybean and product prices
-  Large EU grain and rapeseed crops reduce EU demand for soybeans
-  China’s soybean imports at record levels, but annual gains not keeping pace with increased soybean supplies
*Wild Cards*
-  SAmerican production
-  US grower response to the target price – sell soon or wait?

## Export Outlook for Cotton & Linters

**Export Outlook for Cotton & Linters**

- Note:  FY ’04 and prior years based on U.S Census data; FY ’05 forecast based on WASDE MY forecast.

- Revised FY 2005 Forecast:   Steady at $3.1 Billion

- Revised FY 2005 Forecast
*Key Upside Developments*
-  World use up 2 million tons
-  World imports up 200,000 tons
*Key Downside Developments*
-  Sharp increases in U.S. and Indian production depress prices
*Wild Cards*
-  Stock levels in China
-  Demand response to lower prices

## Export Outlook for Dairy, Livestock & Poultry

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

- Revised FY 2005 Forecast:     $400 Million to $10.8 Billion

- Revised FY 2005 Forecast
*Key Upside Developments*
-  Beef & pork raised $100 million to $3.1 billion supported by beef sales to Mexico and pork sales to Japan, Mexico and Canada
- Dairy product sales remain strong
*Key Downside Development*
-  None
*Wild Cards*
- Timing of the lifting of BSE bans -- forecast currently assumes no resumption of beef trade with Japan and Korea; reopening these markets could add up to $2 billion for the year

## Export Outlook for Horticultural Products

- Revised FY 2005 Forecast:    Unchanged at $13.8 Billion

- Revised FY 2005 Forecast
*Key Upside Developments*
-  Demand remains strong and exchange rates favorable
- Tree nut exports reach record $2 bil supported by record/near record crops and almond crop failure in Spain
-  Wine exports continue rising with abundant domestic supply and a competitive dollar
*Key Downside Developments*
-  Florida hurricane damage sharply reduced fresh grapefruit supply
- Key SPS issues remain
*Wild Cards*
-  U.S. crop sizes; prices

## Export Outlook for Fishery Products

**Export Outlook for Fishery Products**

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

- Revised FY 2005 Forecast:      $100 Million to $3.5 Billion

_***Trade Balance***_
**The annual trade deficit in fishery products is about $8 billion.**

- Revised FY 2005 Forecast
*Key Upside Developments*
-  Pollock fillets, cod and other white fish continue rapid export growth to the European Union (up 37 percent from 2003 to 2004)
-  Exports to Japan, the largest market, and China expected to grow further (sales to Japan up 4% in 2004, and sales to China continued 5-year growth trend up 47% in 2004)
*Key Downside Developments*
-  New Country of Origin Labeling requirements (scheduled to go into affect in April, 2005) may keep more U.S. product at home
*Wild Cards*
-  Size of U.S. harvests of lobster, salmon, and other species

## Export Outlook for Solid Wood Products

**Export Outlook for Solid Wood Products**

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

- Revised FY 2005 Forecast:   Unchanged at $5.6 Billion

_***Trade Balance***_
**The annual wood trade deficit is $16.5 billion.**

- Revised FY 2005 Forecast
*Key Upside Developments*
-  Exports to China increasing mainly due to hardwood demand from its furniture industry
-  Exports to Canada at record level due to re-export demand created by U.S. housing market* *
*Key Downside Developments*
-  Softwood exports to EU and Japan decline due to strong EU production
- Antidumping margins for Chinese wooden bedroom furniture could slow demand for U.S. wood
*Wild Cards*
-  China’s continued economic growth, which has fueled its domestic furniture  demand