# Presentation: 740250

## Fiscal Year Trade Forecasts for
Ag, Fishery & Solid Wood Products

**Ag, Fishery & Solid Wood Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- Released on November 30, 2007, 4pm EST
- Slides prepared by OGA/FAS

- *Includes summaries on all ag groups except tobacco, planting seeds, and sugar& tropical products.  Forecasts for fishery and solid wood products are unofficial.

-   _Changes in FY 2008 Forecast  Since August_AgExports rise $7.5 billion to record $91.0 billionAgImports rise $500 million to record $75.5 billionAgSurplus rises to $15.5 billion

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

***Exports***

***Imports***

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

- All major commodity groups reach record export sales in 2008.                Bulk commodity unit values generally higher & export volumes rise for nearly every group except oilseeds.  Import growth continues faster pace.

- Record

**75.5**

**11.9**

**81.9**

**70.0**

**91.0**

**15.5**

**’****08p**

## Revisions Since August Boost in FY’08 AgExports $7.5 Billion to Record $91 Billion

- Oilseeds & Products       $2.6 billion to $16.3 billion  record
-  (+) soybean and product unit value – demand from China/EU & tighter supply
-  soybean volume (-) 1.3 mmt to 26.5 mmt – smaller stocks & increased dom. crush
- Cotton       $300 million to $5.8 billion  record
-  (+) unit value – higher grade cotton and more late-season shipments
- Livestock/Poultry/Dairy Products       $1.5 bil to $17.1 billion  record
-  dairy products (+) $250 million to record $2.6 billion on (+) volume & world prices
-  broiler meat (+) $200 million to $2.4 billion on (+) unit value & China demand
-  beef (+) $140 mil to $2.4 bil on (+) unit value; vol steady at 545,000 mt
-  pork (+) $180 mil to record $2.7 bil on (+) vol due to (+) supply & competitive price

**Revisions Since August Boost in FY’08 AgExports $7.5 Billion to Record $91 Billion**

- Grains & Feed       $3.2 billion to $27.5 billion  record
-  coarse grain vol (+) 8 mmt to 68 mmt – ample US supply and (+) EU demand
-  (+) wheat volume & unit value – tighter world supply due to less exportable supply from Australia, Europe, Ukraine & Canada

## Export Outlook for Grain & Feed Products

- Includes corn gluten feed/meal

*Record*

**Export Outlook for Grain & Feed Products**

- Chg in FY 2008 Forecast Since Aug:        $3.2 Billion to $27.5 Billion

- ’08f

- Revised 2008 Forecast
*Upside Developments*
-  Coarse Grains +$1.4 bil due to  8 mmt volume increase – ample supplies and (+) EU demand
-  Wheat +$1.5 bil due to 1.5 mmt volume  increase & higher unit value – less exportable supply from EU, Aust., Canada & Ukraine
-  Strong import demand & tight global stocks keep prices elevated for all grains
*Downside Developments*
-  Tightening domestic stocks limit wheat export volume expansion
*Wild Cards*
-  High prices could soften corn & wheat import demand
-  Size of SHemisphere crops

## Export Outlook for Oilseeds & Products

- Excludes corn gluten feed/meal

- Revised 2008 Forecast
*Upside Developments*
-  Soybeans & prods +$2.3 bil due to higher unit value (lower vol)
-  Strong global demand and tighter markets raise prices for soybeans and products
-    -- China’s import demand for soybeans & vegoils at record high
-    -- Strong world biodiesel demand (driven by the EU) and high petroleum prices
*Downside Developments*
-  Soybean vol (-)1.3 mmt – smaller carry-over & (+) domestic crush lower exportable supply
*Wild Cards*
-  SAmerican crop size

**Export Outlook for Oilseeds & Products**

- Chg in FY 2008 Forecast Since Aug:        $2.6 Billion to $16.3 Billion

- ’08f

*Record*

## Export Outlook for Cotton

- Note:  FY ’07 and prior years based on U.S Census data; FY ‘08 forecasts based on WASDE MY forecast.

*Record*

**Export Outlook for Cotton**

- Chg in FY 2008 Forecast Since Aug:        $300 Million to $5.8 Billion

- ’08f

- Revised 2008 Forecast
*Upside Developments*
-  Higher average unit value – shipments shift to later in the season
-  Export volume is unchanged at 3.6 mmt  – record exportable surplus
*Downside Developments*
-  Continued competition from India
*Wild Cards*
-  Uncertainty over production estimates for China & Pakistan

## Export Outlook for Dairy, Livestock & Poultry

*Record*

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

- Chg in FY 2008 Forecast Since Aug:        $1.5 Billion to $17.1 Billion

- ’08f

- Revised 2008 Forecast
*Upside Developments*
-  Dairy (+)$250 million to record   $2.6 bil on strong global prices & (+) vol for NDM, whey, cheese & lactose to Asia & NAmerica
-  Broiler meat (+) $200 million to $2.4 bil mostly on higher unit val; very price competitive product
-  Pork (+) $180 million to record $2.7 bil – vol rises due to weak $, record hog slaughter, lower prices
-  Beef (+) $140 mil to $2.4 billion on (+) unit value; volume holds at 545,000 mt
*Wild Cards*
-  Asia BSE bans on beef trade
-  Ractopamine ban on US pork plants eligible to export to China

## Export Outlook for Horticultural Products

*Record*

**Export Outlook for Horticultural Products**

- No Chg in FY 2008 Forecast Since Aug:  Remains at $18.6 Billion

- FY 2008 Forecast
*Upside Developments*
-  FY 2008 hort. exports rise   $700 million above 2007 on continued sales gains to Canada (the top mkt), Japan, and Mexico
*Downside Developments*
-  Growth rate for entire hort. category slows in 2007 & 2008 mainly due to almond sales
-  Almond export vol continues up but at slower pace; lower value in 2007 for the first time in 6 yrs due to record crop and large supplies
*Wild Card*
-  Impact of aflatoxin sampling program on almond exports to EU

## AgImports                                                        Continue Four Decades of Expansion

*Demand & supply factors at work in a relatively open market*
-  Demand:  consumer preferences (variety, luxury, ethnic foods); population growth; high disposable incomes
-  Supply:  capital flows build foreign capacity; technology transfer; supply chains become global; possibly lower production costs
*FY 2008 import values for products driving most long-term growth*
-  horticultural products $35.2 billion (fruit & vegs $17.8 bil, wine & beer $8.8 bil)
-  snack foods $5.2 bil, beef & pork $4.8 bil, vegoils $3.5 bil, dairy products $2.7 bil
*Key observations for FY 2008 – imports rise $5.5 bil to $75.5 bil*
-  import volume growth slows slightly with weaker dollar & slower economy, but higher prices keep value growing near the faster pace seen in the past 5 years
-  higher prices for grains, oilseeds & their products add $1.4 billion to the import bill – this compares to only $300-million additional sales in 2005
-  tropical product imports continues to grow above trend due to rising prices for natural rubber and rising purchases of coffee, cocoa, and confectioneries

**AgImports                                                        Continue Four Decades of Expansion**

## Top Ag Markets and Ag Suppliers

**Top Ag Markets and Ag Suppliers**

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

## Export Outlook for Fishery Products

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

*Record*

_***Trade Balance***_
**2008 trade deficit estimated at $10 billion**

**Export Outlook for Fishery Products**

- No Chg in FY 2008 Forecast Since Aug:  Remains at $4.1 Billion

- ’08f

- FY 2008 Forecast
*Upside Developments*
-  The $1-bil EU market and $500-mil China market continue to grow
-  King and snow crab export volume & value rise with as total allowable catch increases
-  Mackerel and squid harvest and exports are expected to rebound
*Downside Developments*
-  The 2008 total allowable catch recommendation for pollock is down from 2007
*Wild Cards*
-  Size of U.S. harvests of lobster, salmon, pollock and other species

## Export Outlook for Solid Wood Products

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

_***Trade Balance***_
**2008 trade deficit estimated at $14 billion**

**Export Outlook for Solid Wood Products**

- No Chg in FY 2008 Forecast Since Aug:  Remains at $6.6 Billion

- ’08f

- FY 2008 Forecast
*Upside Developments*
-  US hardwood sales up due to strong demand from Europe, particularly for yellow poplar & white oak
-  Exports to China continue growth due to demand from furniture industry
*Downside Developments*
-  US housing market slump continues – reduces Canadian demand for US lumber which is re-exported as semi-finished products for the US housing industry
-  Decreasing housing starts in Japan cause wood import demand to fall