# Presentation: 666934

## 2005 Forecast...AgExports raised $1.5 bil to $62 bil (just below 2004 record) AgTrade Surplus rises to $4.5 bilInitial 2006 Forecast...AgExports set at record $63.5 bil, AgImports at record $61.0 bilAgTrade Surplus falls to $2.5 bil

**FY 2005 & 2006 Export Forecasts for**
**Ag, Fishery & Solid Wood Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- was released on August 24, 2005, 4pm EST
- Prepared by Foreign Agricultural Service/USDA

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

***Exports***

***Imports***

***Trade Balance******   ***

- In 2005, lower bulk export value (weaker prices & increased competition) offset by record horticultural, pork & dairy exports.  In 2006, horticulture and cotton drive export growth, low grain & oilseed prices persist, and some BSE import bans on beef remain. Imports continue rapid rise on strong demand and weak dollar.

**61**

- Record

- 62.4

**2.5**

**63.5**

**62**

**57.5**

- 52.7

**4.5**

## Export Outlook for Grain & Feed Products

**Export Outlook for Grain & Feed Products**

- Revised FY 2005 Forecast:     $500 Million to $15.8 Billion

- Includes corn gluten feed/meal

- Revised FY 2005 Forecast
*Key Developments*
-  Higher export volumes for corn, sorghum, barley, wheat and rice generally due to stronger demand
-  Higher wheat prices
- Initial FY 2006 Projections
*Upside Developments*
-  Reduced competition for corn and wheat support volume gains
-  Higher rice prices
*Downside Developments*
-  Lower prices are forecast (esp. wheat) due to huge global grain supplies
*Wild Cards*
-  U.S. & world crop size
-  China’s level of corn exports

- Initial FY 2006 Forecast:  $15.8 Billion

## Export Outlook for Oilseeds & Products

**Export Outlook for Oilseeds & Products**

- Excludes corn gluten feed/meal

- Revised FY 2005 Forecast:     $300 Million to $11.1 Billion

- Initial FY 2006 Forecast:  $11.1 Billion

- Revised FY 2005 Forecast
*Key Developments*
-  Higher prices for soybeans and meal due to reduced Brazilian crop and strong China demand
- Initial FY 2006 Projections
*Upside Developments*
-  Record China import demand
-  Reduced 04/05 Brazilian production creates opportunity for US shipments early in fiscal year
*Downside Developments*
-  Reduced 05/06 U.S. soybean crop
-  Record S. American soybean crop
-  Increased competition & reduced domestic crush lowers soybean meal & oil exports
*Wild Cards*
-  S. American soybean production

## Export Outlook for Cotton & Linters

**Export Outlook for Cotton & Linters**

- Note:  FY ’04 and prior years based on U.S Census data; FY ’05 & ’06 forecasts based on WASDE MY forecast.

- Revised FY 2005 Forecast:     $300 Million to $3.9 Billion

- Initial FY 2006 Forecast:   $4.5 Billion

- Revised FY 2005 Forecast
*Key Developments*
-  Larger 2005 U.S. crop
-  Strong demand in China
- Initial FY 2006 Projections
*Key Upside Developments*
-  Large US. supplies
-  China’s crop estimated to fall 10% while domestic use rises
-  China’s imports estimated to more than double to 14 mil 480-lb bales
*Wild Cards*
-  U.S. and world crop size
-  The degree U.S. textile sanctions against China affects timing of China’s cotton imports

## Export Outlook for Dairy, Livestock & Poultry

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

- Revised FY 2005 Forecast:     $100 Million to $11.9 Billion

- Revised FY 2005 Forecast
*Key Developments*
-  Broiler exports raised $100 mil due to strong demand from China, Hong Kong and Russia
-  Beef variety meats raised $53 mil due to strong demand in Mexico and Egypt reopening in March
- Initial FY 2006 Projection
- Assumes remaining BSE import bans stay in place
*Key Downside Developments*
-  Beef & pork unit values drop resulting in lower export value
*Wild Cards*
-  Removal of Japan & Korea’s BSE bans can add up to $2 bil/year

- Initial FY 2006 Forecast:   $11.8 Billion

## Export Outlook for Horticultural Products

- Revised FY 2005 Forecast:   Unchanged at $14.5 Billion

- Record

- Revised FY 2006 Forecast:      $1.4 billion to $15.9 Billion

- Revised FY 2005 Forecast
*Key Developments*
-  Upward revisions for almond and certain fruit & vegetable exports, offset reductions for essential oils and other processed products
*Initial FY 2006 Projections*
*Key Upside Developments*
-  Strong demand & competitive US$ support exports; vol & price gains expected
-  Tree nuts up $600 million mostly due to higher almond prices
-  Gains for citrus and deciduous fruit expected; wine and essential oils continue to rise
*Wild Cards*
-  U.S crop size
-  Global economy; US$ exchge rate

## Export Outlook for Fishery Products

**Export Outlook for Fishery Products**

- Revised FY 2005 Forecast:     $100 Million to $3.7 Billion

_***Trade Balance***_
**The annual trade deficit in fishery products is $7.5 billion.**

- Record

***Forecasts for Fishery Products are not official USDA estimates.***

- Initial FY 2006 Forecast:  $3.8 Billion

- Revised FY 2005 Forecast
*Key Developments*
-  Alaska sockeye salmon harvest is going well and bringing higher prices
-  Exports rise to top 5  mkts (Japan, EU, Canada, Korea, China)
*Initial FY 2006 Projections*
*Upside Developments*
-  Increased exports to top 5 mkts expected to continue
*Downside Developments*
-  Strong competition from third country suppliers
*Wild Card*
-   Size of U.S. harvests of lobster, salmon, and other species
-  Global economy

## Export Outlook for Solid Wood Products

**Export Outlook for Solid Wood Products**

- Revised FY 2005 Forecast:      Unchanged at $5.8 Billion

_***Trade Balance***_
**The FY 2004 wood products trade deficit was $16.5 billion.**

***Forecasts for Solid Wood Products are not official USDA estimates.***

- Initial FY 2006 Forecast:  	$5.9 Billion

- Revised FY 2005 Forecast
*Key Developments*
-  US antidumping duty on Chinese furniture hasn’t slowed wood exports
-  Exports to Caribbean up as region rebuilds from last year’s hurricanes
*Initial FY 2006 Projections*
*Upside Developments*
-  Mexico’s maquiladoras expected to use more US lumber
-  EU hardwood & softwood market to continue gradual recovery
*Downside Developments*
-  Softwood lumber continues to face increased competition in Japan
*Wild Cards*
-  Impact of US housing starts