# Presentation: 738595

## Since August...AgExport Forecast Raised $2.5 Billion to $59.5 Billion AgImport Forecast Raised $1.0 Billion to $48.5 BillionAgTrade Surplus Rises to $11.0 Billion 

**Fiscal 2004**
**Export Forecasts for Agricultural,**
**Fishery & Solid Wood Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- will be released at 4pm EST on November 25th, 2003
- Prepared by Foreign Agricultural Service/USDA

**Notes:**
Our 2nd FY 2004 trade forecast for total agriculture, and there will be three more.

This early in the cycle we can still expect large adjustments in grains, oilseeds and cotton.

Lock-up commodities account for half of total value, and 90% of chg

Reference export profile chart

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

- Record

***Exports***

***Imports***

***Trade Balance   ***

- Improved outlook for cotton & higher soybean and beef prices spearhead $3.3-billion rise in 2004 exports; broiler meat, fruits and tree nuts also support annual gain.  Surplus rises slightly to $11.0 billion.

- 59.5

- 56.2

- 45.7

- 48.5

- 11.0

- 10.5

**Notes:**
Improve 2004 - higher prices and China are a big part of the pic
We’ll look at commodities & country detail in a moment.

Surplus remains in the $10-11 billion range

We expect another record for imports -- $48.5
Hort is 2/3 of chg – as usual – assort F&V and wine & beer
Beef
Grain products

## Product/Country Export Projections, 2004

|  | 
Final
FY 2003 | Project
2004
Aug | Project
2004
Nov | 
Aug/Nov
Chg | 

Main Reasons |
| --- | --- | --- | --- | --- | --- |
| Soybeans ($Bils) | 6.533 | 5.7 | 7.1 | +1.4 | (+) price offsets (-) vol; China |
| Cotton ($Bils) | 2.727 | 3.5 | 4.3 | +0.8 | (+) vol/price; China |
| Beef/pork ($Bils) | 5.178 | 5.1 | 5.5 | +0.4 | (+) beef prices/vol |
| Hort Prods ($Bils) | 11.903 | 12.0 | 12.3 | +0.3 | (+) tree nuts/some fruits/wine |
|  |  |  |  |  |  |
| Soybeans (mmt) | 28.596 | 27.2 | 24.2 | -3.0 | US crop; SAmerican comp |
| Soymeal (mmt) | 5.455 | 5.5 | 4.1 | -1.4 | US crop; SAmerican comp |
| Corn (mmt) | 41.037 | 46.0 | 47.5 | +1.5 | US crop; Argentine comp |

**Product/Country Export Projections, 2004**

***Key Commodity Changes Since August***

|  | 
Final
FY 2003 | Project
2004
Aug | Project
2004
Nov | 
03/04
Chg | 

Main Reasons |
| --- | --- | --- | --- | --- | --- |
| China ($Bils) | 3.473 | Na | 5.4 | +1.9 | cotton vol/price; soybean price |
| Japan ($Bils) | 8.840 | Na | 9.1 | +0.3 | soybean & beef prices |
| Mexico ($Bils) | 7.655 | Na | 8.2 | +0.5 | cotton/soybean/meat/hort |
| Canada ($Bils) | 9.115 | Na | 9.4 | +0.3 | high-value products |

***Key Country Changes – FY 2003 to 2004***

**Notes:**
Talk about commoditiews

Talk about countries...
Asia +2.5 bil to 24.1
WHemi +900 mil to 22.4

## Export Outlook for Grain & Feed Products

**Export Outlook for Grain & Feed Products**

- Revised FY 2004 Forecast:     $200 Million to $15.3 Billion

- Includes corn gluten feed/meal

- Revised FY 2004 Forecast
*Upside Developments*
-  Wheat volume up with ample US supply & poor Ukraine/ Russia crops
-  Corn volume up on record US production & less competition from China and Argentina
-  Rice exports up on sustained strong demand in Latin America
*Downside Developments*
-  Wheat, corn unit values down slightly from the previous year
- Smaller sorghum crop
*Wild Cards*
-  Will China be a wheat importer or exporter?

**Notes:**
Here is one area where we don’t see price increases...
In fact, p is down for what and CGrains but vol is up

And here you see some of the reasons.

Except on rice:  higher prices offset lower volume

Cracked corn to Mexico 2,1 mmt last yearoct-sep 

## Export Outlook for Oilseeds & Products

**Export Outlook for Oilseeds & Products**

- Excludes corn gluten feed/meal

- Revised FY 2004 Forecast:      $1.5 Billion to $10.6 Billion

- Revised FY 2004 Forecast
*Upside Developments*
-  Record China imports supports US soybean exports
-  Higher soybean & product prices
*Downside Developments*
-  Smaller US crop due to low yields limits US soybean & product exports
-  Higher SAmerican soybean production/competition
*Wild Cards*
-  Drought in Argentina
-  Rust in South America
-  China’s imports

**Notes:**
Higher prices and continued record demand from China
  - China’s soybean demand for poultry and aquaculture
  - Reduced cotton crop support demand for soybeans
  - China’s tariff quota on palm oil supports soybeans

Comp from SAmerican remains – another record harvest and export
 -- but there is risk for smaller production – Post red flag

World supply growth just barely keeping up with demand growth

Need to watch the situation develop

## Export Outlook for Cotton & Linters

**Export Outlook for Cotton & Linters**

- Note:  FY ’03 and prior years based on U.S Census data; FY ’04 forecast based on WASDE Marketing Year  forecast.

- Revised FY 2004 Forecast:      $800 Million to $4.3 Billion

- Revised FY 2004 Forecast
*Upside Developments*
-  China’s production down; imports from all sources projected at a record 7 million 480-lb bales
-  U.S. production up
-  Prices up sharply
*Downside Developments*
-  Some switch to synthetics
*Wild Cards*
-  China’s import policy
-  China’s stock estimates

**Notes:**
US textile quota will have little/no impact

## Export Outlook for Dairy, Livestock & Poultry

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

- Revised FY 2004 Forecast:     $400 Million to $12.7 Billion

- Revised FY 2004 Forecast
*Upside Developments*
- Beef exports strengthen on higher prices & record volume
- Broiler exports expand to non-traditional markets
*Downside Developments*
- Japan’s safeguard on beef imports lasts until Mar 2004
- Higher feed prices raise production costs
*Wild Cards*
- Mexico’s pork antidumping case remains uncertain
- Russia’s 2004 poultry quota allocation yet to be decided

**Notes:**
Up $400 mil since Aug, and +500 mil yr-to-year

Non trad mkts:  Cuba, Romania, Angola, Guat

## Export Outlook for Horticultural Products

**Export Outlook for Horticultural Products**

- Revised FY 2004 Forecast:     $300 Million to $12.3 Billion

- Revised FY 2004 Forecast
*Upside Developments*
- Strong sales of berries, grapes & other minor fruits
- Adequate almond supply & record walnut crop
- Solid growth for wine & essential oils
- Mexico & Canada lead overall sales growth
*Downside Developments*
- Overall sales to Asia remain relatively flat
*Wild Cards*
- Size of US fruit & nut crops
- Strength of US dollar

**Notes:**
Up $300 mil since Aug, and +400 mil yr-to-year

All hort to Mex surpasses the $1 bil mark last year

Modest....some upward potential

## Export Outlook for Fishery Products

**Export Outlook for Fishery Products**

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

- Revised FY 2004 Forecast:     Unchanged at $3.1 Billion

- Revised FY 2004 Forecast
*Upside Developments*
-  Large supply of canned pink and sockeye (Red) salmon
-  2004 California squid harvest should improve
*Downside Developments*
-  Abundant supplies continue to push prices lower for catfish, shrimp, and other fishery products
*Wild Cards*
-  Size of U.S. harvests of lobster, salmon, and other species

**Notes:**
Had generally good harvests in 2003....expect more of the same.

Difficult to get any sig boost because of growing internal demand, and no real push on aquaculture

Continue to rely on natural pops which are much more vunerable to overfishing, disease, etc

Trade deficit is $11 billion

## Export Outlook for Solid Wood Products

**Export Outlook for Solid Wood Products**

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

- Revised FY 2004 Forecast:     Unchanged at $5.0 Billion

- Revised FY 2004 Forecast
*Upside Developments*
-  Exports to Canada rising on strength of hardwood sales and favorable exchange rate
- EU furniture and interior decorators to use more U.S. hardwood veneer
*Downside Developments*
- Slower export growth to China
- Softwood lumber exports continue to face increased competition in Japan and EU
*Wild Cards*
- Will exports to China rebound from summer slowdown?

**Notes:**
Again, huge domestic demand.

Lots of comp in softwoods from Russia, Chile, etc

Advances industrial wood manufacturing in Europe

Trade deficit is $13 billion