# Presentation: 742798

## Since November...AgExport Forecast Lowered $500 Million to $59.0 Billion AgImport Forecast Raised $1 Billion to $49.5 BillionAgTrade Surplus Lowered to $9.5 Billion 

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

- USDA’s “Outlook for U.S. Agricultural Trade”
- was released at 9am EST on February 19th, 2004
- 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 grains, cotton & horticulture products and higher oilseed prices raise exports in 2004, despite BSE-related losses for beef and cattle. With imports up $3.8 billion, the trade surplus falls to $9.5 billion.

- 59.0

- 56.2

- 45.7

- 49.5

- 9.5

- 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

| ($ Billions) | 
Final
FY 2003 | 
FY ‘04
Nov | 
FY ‘04
Feb | 
Nov/Feb
Chg | 

Main Reasons |
| --- | --- | --- | --- | --- | --- |
| Beef/pork/offals | 5.178 | 5.5 | 2.9 | -2.6 | (-) BSE-related bans on beef |
| Oth livestock prods | 3.896 | 3.8 | 3.1 | -0.7 | (+) BSE-bans on hides, fats, etc |
| Corn | 4.563 | 4.9 | 5.9 | +1.0 | (+) price & volume |
| Hort prods | 11.903 | 12.0 | 12.3 | +0.3 | (+) fruit, treenuts, wine, ess oils |
|  |  |  |  |  |  |
| Corn (mmt) | 41.037 | 47.5 | 51.0 | +3.5 | Argentine/China competition |
| Beef/pork/offal (mmt) | 1.993 | 2.0 | 1.1 | -0.9 | BSE-related bans 70+ cntys |
| Wheat (mmt) | 24.434 | 28.0 | 29.0 | +1.0 | EU/Russia/Ukraine competition |

**Product/Country Export Projections, 2004**

***Key Commodity Changes Since November***

| ($ Billions)  | 
Final
FY 2003 | 
FY ‘04
Nov | 
FY ‘04
Feb | 
Nov/Feb
Chg | 

Main Reasons |
| --- | --- | --- | --- | --- | --- |
| China | 3.473 | 5.4 | 5.4 | no chg | (+) soybean vol; (-) BSE bans |
| Japan | 8.840 | 9.1 | 7.8 | -1.3 | (-) BSE bans; (+) grain prices |
| South Korea | 2.732 | 2.9 | 2.1 | -0.8 | (-) BSE bans; (+) grain prices |
| Mexico | 7.655 | 8.2 | 7.7 | -0.5 | (-) BSE bans; (+) prices/hort |
| Canada | 9.115 | 9.4 | 9.9 | +0.5 | (+) high-value prods/lower US$ |

***Key Countries & Changes Since November***

**Notes:**
Talk about commodities

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:     $1.8 Billion to $17.1 Billion

- Includes corn gluten feed/meal

- Revised FY 2004 Forecast
*Upside Developments*
- Global grain situation tight by historic standards
- Corn & wheat vols/unit values rise boosting value $1.5 billion
*Downside Developments*
- BSE-related trade ban lowers pet food/compound feed exports
*Wild Cards*
- China’s corn and wheat situation; outstanding U.S. wheat sales to China
- Avian influenza outbreaks in Asia and their impact on feed grain demand

**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:     $300 Million to $10.9 Billion

- Revised FY 2004 Forecast
*Upside Developments*
- China’s soybean import demand (a record 23 mmt) raises US export volume further
- High soybean and other oilseed prices boost value
*Downside Developments*
- Tight domestic soybean supply limits exports
*Wild Cards*
- Size of South American soybean crops
- Avian flu outbreaks in Asia and their impact on feed demand

**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:      $200 Million to $4.1 Billion

- Revised FY 2004 Forecast
*Upside Developments*
- None
*Downside Developments*
- Demand (particularly in China) has proven less robust than expected
*Wild Cards*
- Fluctuation in oil prices could change synthetic use
- Poor weather could hurt Southern Hemisphere crop

**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:     $3.1 Billion to $9.6 Billion

- Revised FY 2004 Forecast
*Upside Developments*
- Pork exports up to $1.7 billion on higher prices & some vol increase
- Broiler meat exports rise due to smaller competitor supply & higher prices
*Downside Developments*
- BSE-related trade bans (70+ markets) sharply lower beef and offal sales; smaller impacts on hides, tallow & live cattle/genetics
*Wild Cards*
- When will BSE trade bans be lifted on beef & livestock prods?
- Avian influenza status in Asia & three U.S. states

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

Non trade mkts:  Cuba, Romania, Angola, Guat

## Export Outlook for Horticultural Products

**Export Outlook for Horticultural Products**

- Revised FY 2004 Forecast:     $500 Million to $12.8 Billion

- Revised FY 2004 Forecast
*Upside Developments*
- North American demand is very strong
- Good almond supply & excellent walnut crop
- Citrus and juice exports expected to be strong
*Downside Developments*
- Vegetable exports remain stagnant
*Wild Card*
- U.S. dollar exchange rates

**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*
-  2004 Alaska salmon harvest is forecast to increase13%
- Beef (BSE) and poultry (avian flu) concerns may help fishery product exports
*Downside Developments*
- U.S. initiation of shrimp antidumping duty investigations may hurt U.S. fishery product exports
*Wild Cards*
- Strength of the U.S. dollar?
- Size of U.S. harvests of lobster, salmon & 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:      $100 million to $5.1 Billion

*Not for Public Release*

- Revised FY 2004 Forecast
*Upside Developments*
- Exports to Canada up due to US housing market and weaker US dollar
- Hardwood lumber exports to China continue to rise with China’s furniture production
*Downside Developments*
- Exports to the Caribbean decreasing with limited hurricane-related construction
- Softwood lumber exports face increased competition in Japan and the EU
*Wild Cards*
- Wood products on Foreign Sales Corporation list