# Presentation: 716591

## Changes since August...AgExports are raised $5 billion to $77 billionAgImports are raised $500 million to record $69 billion AgTrade Surplus raised to $8 billion

**FY 2007 Export Forecasts for**
**Ag, Fishery & Solid Wood Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- Released on November 22, 2006, 4pm EST
- Prepared by Foreign Agricultural Service/USDA

- *Includes separate summaries for all major product groups excepttobacco, planting seeds, and sugar & tropical products.Includes unofficial forecasts on fishery and solid wood products.

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

***Exports***

***Imports***

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

- Corn, soybeans & horticultural products drive export growth in FY ’07 with higher corn prices, higher soybean prices and shipments, and strong demand for horticultural products.  Imports up across many groups.

- Record

**68.7**

**64.0**

**4.8**

**4.7**

**8.0**

**77.0**

**69.0**

## Commodity/Country Revisions in FY 2007 Exports

|  | Final
FY 2006 | 
FY ‘07
Aug  | 
FY ‘07
Nov    | 
Aug/Nov 
Chg | 

Key Reasons |
| --- | --- | --- | --- | --- | --- |
| Corn ($Bil) | 6.199 | 6.8 | 8.9 | +2.1 | sharply higher prices - tighter supply |
| Soybeans ($Bil) | 6.382 | 6.9 | 7.8 | +0.9 | (+) price & vol |
| Livestock Prods ($Bil) | 13.397 | 13.4 | 14.2 | +0.8 | (+) sales of beef, pork, hide & skins |
| Wheat ($Bil) | 4.320 | 4.6 | 4.9 | +0.3 | (+) price & vol |
|  |  |  |  |  |  |
| Soybeans (mmt) | 26.616 | 29.7 | 31.2 | + 1.5 | (+) US crop; (-) SAmer comp. |
| Wheat (mmt) | 25.164 | 25.0 | 26.0 | +1.0 | (-) wld supply, (-) Australian comp |

**Commodity/Country Revisions in FY 2007 Exports**

- #1 Canada  +$800 million to $13.2 billion (corn/soybean meal prices, meats, packaged foods)
- #2 Mexico  +$600 million to $11.9 billion (feed grain prices, soybeans & meal, meats)
- #3 Japan   +$800 million to $9.1 billion (corn prices, wheat, soybeans)
- #4 EU-25   +$600 million to $7.2 billion (soybeans, feed prices)
- #5 China   +$1 billion to $8.5 billion (soybeans, cattle hides, meats)
-  **Top Regional Mkt:  **WHemisphere at $32.2 billion (Asia 2nd at $28.3 billion)

***Key Commodity Changes since August . . .***

***Top 5 Markets, Changes in FY 2007 Forecasts since August . . .***

## Export Outlook for Grain & Feed Products

**Export Outlook for Grain & Feed Products**

- Includes corn gluten feed/meal

- Revised FY 2007 Forecast:     $3.1 Billion to $22.1 Billion

- Revisions Since August
*Upside Developments*
-  Corn exports up $2.1 billion to $8.9 billion on higher prices caused by continued strong demand and tightening domestic supply
-  Sorghum up (higher prices & vol)
-  Tighter world supply raises wheat prices & reduced competition from Australia raises U.S. shipments
*Downside Developments*
-  None
*Wild Cards*
-  Will high prices start choking off feed demand?
- Will competitors be able to increase production quickly?
- Will substitute grains be “found” given high corn prices?

## Export Outlook for Oilseeds & Products

**Export Outlook for Oilseeds & Products**

- Excludes corn gluten feed/meal

- Revised FY 2007 Forecast:     $1.3 Billion to $12.4 Billion

- Revisions Since August
*Upside Developments*
-  Higher export vols & unit values expected for soybean, meal & oil
-  Record U.S. soybean crop and limited growth in S. American crop
-  Higher prices & strong growth in world demand for soy meal and oil
*Downside Developments*
-  Export growth limited to soybean complex
*Wild Cards*
-  S. American soybean production
-  China’s soybean demand

## Export Outlook for Cotton

**Export Outlook for Cotton**

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

- Revised FY 2007 Forecast:     $100 Million to $5.0 Billion

- Record

- Revisions Since August
*Upside Developments*
-  Continued strong economic growth in China and strong global demand for textiles
-  Increased import demand in Pakistan
*Downside Developments*
-  Larger crops in China, India, and the United States lower price expectations
*Wild Cards*
-  China TRQ situation

## Export Outlook for Dairy, Livestock & Poultry

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

- Record

- Revised FY 2007 Forecast:     $800 Million to $14.2 Billion

- Revisions Since August
*Upside Developments*
-  Beef exports up $214 million (+13%) on higher unit values and volume to Mexico, Canada & some Asian markets
-  Pork exports increased $251 mil. (11%) due to higher unit values
-  Hide, skin & fur exports raised $228 million due to strong demand and projected slaughter increase
*Downside Developments*
-  While Japan & Korea markets are open to US beef, sales are constrained by uncertainty, high prices, and limited supply of younger cattle
*Wild Cards*
-  Impact of drought on Australia’s cattle and beef exports

## Export Outlook for Horticultural Products

- Record

- Revised FY 2007 Forecast:  Unchanged at $18.4 Billion

- Revisions Since August
*Upside Developments*
-  Florida grapefruit escape hurricane damage and the crop is 35% larger
-  Fruit juices forecast to reach      $1 billion due to higher prices
*Downside Developments*
-  4th Qtr. 2006 tree nuts sales weaker; estimated 2007 prices lowered slightly but still high
-  27% drop in Calif navel orange production – weather related
*Wild Cards*
-  Weather and pest impacts on U.S. crop size

## Export Outlook for Fishery Products

**Export Outlook for Fishery Products**

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

_***Trade Balance***_
**FY 2006 deficit was $8.9 billion**
**FY 2007 deficit estimated at $9.5 billion**

- Record

- Revised FY 2007 Forecast:  Unchanged at $4.2 Billion

- Revisions Since August
*Upside Developments*
-  Exports to the EU were up sharply over the past 3 years, largely due to volume gains –   trend expected to continue
-  Exports to China also up sharply over the past 3 years due to volume gains – trend expected to continue
*Downside Developments*
-  The 2006 Alaska pink salmon harvest is only half as large as 2005
-  The allowable 2007 Alaska pollock harvest will be down 15% in 2007
*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.***

_***Trade Balance***_
**FY 2006 deficit was $17.9 billion**
**FY 2007 deficit estimated at $18.1 billion**

- Revised FY 2007 Forecast:     $200 Million to $6.4 Billion

- Revisions Since August
*Upside Developments*
-  Canada’s construction industry consumes more U.S. panel products
-  Mexico’s maquiladora sector to continue demand for hardwood and softwood lumber
*Downside Developments*
-  Softwood exports to Japan losing market share to China and Malaysia
*Wild Cards*
-  Impact of slowing US housing mkt