# Presentation: 661717

## Fiscal Year Trade Forecasts
for Agricultural Products

**for Agricultural Products**

- USDA’s “Outlook for U.S. Agricultural Trade”
- Released on August 28, 2008, 4pm EST
- Slides prepared by Office of Global Analysis/FAS

- Summaries on all groups except tobacco, planting seeds, and sugar & tropical products

-   _Changes in 2008 Forecast Since May_AgExports rise $5.5 billion to record $114.0 billionAgImports rise $500 million to record $79.0 billionAgSurplus reaches record $35.0 billion

-   _Initial 2009 Forecast_AgExports set at $113.0 billionAgImports reach record $83.0 billionAgSurplus drops to $30.0 billion

## U.S. Agricultural Trade

**U.S. Agricultural Trade**

***Exports***

***Imports***

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

- In 2008, bulk grains & oilseeds account for half of the $32-billion export gain,         animal & horticultural products account for most of the rest.  In 2009, reduced grain sales nearly offset by gains for all other product groups.  Import growth slows.

- Record

**79**

**11.9**

**81.9**

**70**

**114**

**35**

**83**

**113**

**30**

## Final Forecast for FY 2008 AgExports                               Increased $5.5 Billion Since May to Record $114 Billion      Exports Surging an Amazing $32 Billion or 39% in 1 Year!

*Wheat, Soybeans & Meats Account for Largest Revisions Since May*
-  wheat + $1.3 bil supported by 1.7 mmt increase & higher prices – stronger global demand, esp. from North Africa
-  soybeans + $1.2 bil supported by 1.5 mmt increase & higher prices – stronger late-season sales (mostly China) and record pices; soybean products add $600 mil.
-  animal products jump $1.4 billion supported by further increases for pork and dairy
*US Exports to Top 5 Markets ($ bils) – China moves up to #4*
- #1 Canada $16.1   #2 Mexico $15.2    #3 Japan $12.6   _#4 China $12.3_   #5 EU $10.8
*Headed Toward Closing Out An Amazing Year!*
-  large US supplies, strong foreign demand, reduced grain competition, weak dollar, link to energy markets, some foreign governments move to restrict grain trade
-  all major groups post large gains and reach record export values – agexports jump $32 billion over 2007, or 2.5 times the gain of 2007’s record increase
-  bulk at record 139.3 mmt, up 14.5 mmt from 2008 and 2.9 mmt over 1980 record
-  higher prices drive export increase, but widespread volume gains also important
-  exports and high prices support record farm equity and net farm income

**Final Forecast for FY 2008 AgExports                          *****     Increased $5.5 Billion Since May to Record $114 Billion      Exports Surging an Amazing $32 Billion or 39% in 1 Year!***

## Headed Toward Closing Out An Amazing Year                                                                                       Higher Prices Drive Most of The Expected $32-Billion Increase  in 2008, But Widespread Volume Gains Also Important                                            

- Bulk products rise $18.1 billion, accounting for 56% of $32-billion gain                    Increased volumes account for 20% of value gain (80% price). Soybeans 4% of $5.9 bil., wheat 14% of $5.4 bil., corn 25% of $4.5 bil., rice 46% of $660 mil., cotton 100% of $510 mil
- High-value products rise $14 billion, accounting for 43% of $32-billion gain        Volume increases more significant:  pork 100% of $1.6 bil., broilers 61% of $730 mil., beef 91% of $530 mil., dairy mixed.  Horticultural products mixed, but tree nuts 100% of $475 mil., fresh fruit & vegs 82% of $625 mil.

**Headed Toward Closing Out An Amazing Year                         *****                                                              Higher Prices Drive Most of The Expected $32-Billion Increase  in 2008, But Widespread Volume Gains Also Important******                                            ***

- $18.1 bil.

- vol

- price

**Bulk Export Value ($Bils) FY 2001-09**

- vol

- price

- high-value products

**Export Value Gains by Product, FY 2007/08 Value Chgs Due to Volume vs. Price ($Bils)**

## Commodity Developments, FY 2008 to 2009

- Grains & Feeds       $4.8 billion to $32.2 billion
-  wheat down $3.6 bil. due to (-) 5.7 mmt & (-) 15% price – increased competition
-  corn down $670 mil. as (-) 11 mmt offsets some (+) price – increased competition from abundant feed-quality wheat; sorghum shipments down 3 mmt
-  rice up $300 million due to (+) avg. price – some export restrictions remain
- Horticultural Products       $2 billion to record $22.7 billion
-  less favorable foreign economic growth conditions slow export growth rate
-  fresh & proc. fruits/vegs up $1.2 bil.; tree nuts up $300 mil., record almond crop
- Cotton       $1.1 billion to record $5.9 billion
-  up $1.1 bil. due to (+) 300,000 mt & (+) price – large supply & less competition
- Animal Products       $500 million to record $22.4 billion
-  pork up $380 mil. & beef up $300 mil. mostly on (+) volumes – competitive prices expand sales to traditional markets; dairy down $400 mil. – lower US supply/prices
- Oilseeds and Products       $300 million to record $23 billion
-  soybeans up $600 mil. as (+) 19% price offsets (-) 4 mmt – smaller US supply, tight markets & strong demand support price; similar for soybean meal and oil

**Commodity Developments, FY 2008 to 2009**

***AgExports Forecast to Fall $1 Billion to $113 billion***

## Export Outlook for Grain & Feed Products

- Includes corn gluten feed/meal

*Record*

- Revised 2008 Forecast
*Key Developments*
-  Wheat up 1.7 mmt & $1.3 bil –        volume & unit value rise on increased North African demand
-  Corn unit value rises, vol falls –   increased competition
- Initial 2009 Forecast
*Key Developments *
-  Wheat down $3.6 bil on 5.7 mmt drop & lower prices – foreign crops recover increasing competition from EU, Black Sea & Australia; markets remain tight
-  Coarse grains down 14.7 mmt –  increased foreign exportable supplies of feed-quality wheat, corn and barley
-  Second largest US corn crop supports ethanol production and exports
*Wild Cards*
-  Australia wheat crop; US, Argentina, and Brazil corn crops

**Export Outlook for Grain & Feed Products**

- Revised FY 2008 Forecast:     $1.7 Billion to $37 Billion

- Initial FY 2009 Projection:  $32.2  Billion

## Export Outlook for Oilseeds & Products

**Export Outlook for Oilseeds & Products**

- Excludes corn gluten feed/meal

*Record*

- Revised FY 2008 Forecast:     $2.0 Billion to $22.7 Billion

- Initial FY 2009 Projection:  $23 Billion

- Revised 2008 Forecast
*Key Developments*
-  Soybeans up 1.5 mmt & $1.2 bil – strong demand, mostly China; meal and oil volumes & values higher
-  Continued high prices boost value
- Initial 2009 Forecast
*Key Developments*
-  Soybeans fall 4 mmt on reduced US soybean supply; strong demand limits stock growth while raising unit values boost total export value $600 million
-  Demand for soybean meal & oil to keep export volumes near FY ‘08 level
*Wild Cards*
-  Impact of higher grain & other oilseed production on soy product demand
-  Prices remain volatile & sensitive to US production changes
-  Soybean acreage expansion in Brazil

## Export Outlook for Cotton

_*Note*_  FY ’07 and prior years based on Census data; FY ‘08 and FY ’09 forecasts based on WASDE MY forecasts

*Record*

**Export Outlook for Cotton**

- Revised FY 2008 Forecast:      $300 million at $4.8 Billion

- Initial FY 2009 Projection:  $5.9 Billion

- Revised 2008 Forecast
*Key Developments*
-  Export value lowered mostly due to 100,000 ton reduction – softening consumption, weaker import demand
-  Tighter market keeps prices firm
- Initial 2009 Forecast
*Key Developments*
-  Cotton up 300,000 tons – large US stocks relative to competitors will favor US exports
-  Continued decline in global production due to competition for acreage will further tighten stocks and boost prices
*Wild Cards*
-  US/foreign crops; increased price volatility; China’s demand

## Export Outlook for Dairy, Livestock & Poultry

*Record*

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

- Revised FY 2008 Forecast:     $1.4 Billion to $21.9 Billion

- Initial FY 2009 Projection:  $22.4 Billion

- Revised 2008 Forecast
*Key Developments*
-  Pork + $700 mil. to record $4.2 bil. – strong demand from China
-  Dairy + $300 mil., broilers + $275 mil., beef + $130 mil. – strong demand from many markets
-  Higher volumes, not prices, drive value increases for meats
- Initial 2009 Forecast
*Key Developments*
-  Pork up $380 mil to record $4.6 bil. & beef up $300 mil. to $2.7 bil. – mainly vol gains
-  Dairy exports down $400 mil as prices moderate, competition rises, and US milk expansion slows
*Wild Cards*
-  Increased price volatility; beef shipments to Korea

## Export Outlook for Horticultural Products

**Export Outlook for Horticultural Products**

- Revised FY 2008 Forecast:     $200 Million to $20.7 Billion

- Initial FY 2009 Projection:  $22.7 Billion

*Record*

- Revised 2008 Forecast
*Key Developments*
-  Fresh & processed fruits & veg exports raised on sales to Canada
- Initial 2009 Forecast
*Key Developments*
-  Fresh fruits & vegs up $600 mil.  on higher vol & price – Canada, Mexico and Japan are key
-  Processed fruit & vegs up $600 mil. on higher vol & price – potato and tomato product sales accelerate despite EU/China competition
-  Record almond harvest and exports anticipated – higher vol offsets lower prices
*Wild Cards*
-  Assume good weather & crop sizes
-  Will pace of sales growth to Canada continue?

## AgImports                                                        Continue Four Decades of Expansion

*Demand & supply factors at work in a relatively open market*
-  Demand:  consumer preferences (variety, luxury, ethnic foods); high disposable income; population growth near 3 million/year
-  Supply:  capital flows build foreign capacity; technology transfer; global supply chains; lower wages favor foreign suppliers of labor-intensive crops
*FY 2009 import values for products driving most long-term growth*
-  Horticultural products $36.3 billion (fruit & vegs $18.4 bil, wine & beer $8.7 bil)
-  Snack foods $5.5 bil, beef & pork $4.2 bil, vegoils $4.8 bil, dairy products $3.1 bil
*Key observations for FY 2009 – imports up $4 bil to record $83 bil.*
-  Import growth rate slows to lowest in years:  (1) weaker US economy due to housing-market bust & credit crunch; consumer spending squeezed by higher food & energy prices; (2) $4.7 bil. jump for grains & oilseeds in 2008 will not repeat
-  Horticultural products (+) $1.8 bil., accounting nearly half of total gain
-  Tropical products (+) $1.2 bil as natural rubber, coffee & cocoa continue to grow above trend with high prices and volume gains

**AgImports                                                        Continue Four Decades of Expansion**

## Top Ag Markets and Ag Suppliers

**Top Ag Markets and Ag Suppliers**

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