# Presentation: 085549

## Outlook for U.S. Agricultural Exports to CAFTA–DR Countries

- Honduras

- Guatemala

- Nicaragua

- El Salvador

- Costa Rica

- Dominican Republic

**Outlook for U.S. Agricultural Exports to CAFTA****–****DR Countries**

*May 2006*

**Notes:**
  Now, let me shift my focus specifically to the CAFTA-DR agreement.  This is a good agreement for agriculture.

  It will give us greater access to 44 million more consumers whose incomes are growing and who want to eat better.  Their economies are growing, incomes are growing – and that will only get better with this agreement.

  Let me emphasize – this is a close-by market, where we have a natural transportation advantage.

## Sustained Strong Economic GrowthHas Transformed the CAFTA–DR Countries Regional economy has almost doubled since 1990, expected to expand another 65% by 2020  

**Sustained Strong Economic Growth****Has Transformed the CAFTA****–****DR Countries**** ***Regional economy has almost doubled since 1990, expected to expand another 65% by 2020****  ***

***Aggregate Real GDP for CAFTA******–******DR (bil $)****** ***

*Source:  Global Insight*

## Sustained Economic Growth Is Changing the Demographics of the CAFTA–DR Countries, Boosting The Middle Class ...By 2020, growth of the middle class could transform food markets, boost imports

**Sustained Economic Growth Is Changing the Demographics of the CAFTA****–****DR Countries, Boosting The Middle Class ****...***By 2020, growth of the middle class could transform food markets, boost imports*

*By 2020, the region’s primary source of growth for U.S. exporters will be the middle class, which will account for 40% of households in the CAFTA–DR countries, up from just 24% in 2000.*

***Millions of CAFTA******–******5 households with real PPP incomes over $20k***

*CAFTA-5 is Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. Data NA for Dominican Republic*
*NOTE:  Middle class is defined as those households with real PPP adjusted incomes exceeding $20,000/year*
*Source:  Analysis by FAS/USDA using Global Insight’s Global Consumer Markets data*

## ... And CAFTA’s Retail Food Purchases Growth of purchases during the next 15 years, plus improved market access under CAFTA-DR, means new export opportunities for U.S. food and agricultural producers. 

***FTA could accelerate the region’s income and food consumption growth even further***

**CAFTA-5 Real Food Expenditures***Billion $ (1997=100)*

*CAFTA-5 is Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.  Data NA for Dominican Republic*
*Source:  Analysis by FAS/USDA using Global Insight’s Global Consumer Markets data*

## Strong Growth in CAFTA–DR’s Food Demand is Boosting U.S. Exports—Record $2 Billion in 2006Export growth is broad-based—bulk and high-value products

**U.S. Agricultural Exports to CAFTA****–****DR ($ million)**

**Bulk Commodities**

**Intermediate Products**

**Consumer Foods**

**U.S. exports to CAFTA****–****DR are up by 200% since FY 1990, versus only 60% to the rest of the world.****  **

**Notes:**
 Last year we had record large export sales - $62.3 bil – surpassed record set in 1996 of $59.8 bil.

 This growth reflected some higher prices and expansion of high- value and value-added product sales.

 Exports for fiscal 2005 are forecast to reach $59 billion, $3.3 billion below the 2004 record due to record global grain, soybean, and cotton supplies, increased foreign competition, and lower prices.

Foreign sales closely linked to market access and global economic growth.  Global economic growth for 2005 remains strong, but is slowing somewhat to 3.4 percent, down from the greater than 4 percent growth of 2004.

## Most U.S. Agricultural Exports To CAFTA-DR Have Grown Significantly During Past Decade
Strong economic growth and expanding middle class have fueled gains in U.S. exports

*Strong economic growth and expanding middle class have fueled gains in U.S. exports*

**U.S. Ag Exports (mil $)**

## Best Export Prospects Over Next 3–5 YearsStrong underlying demand growth and/or reduced tariffsshould benefit these U.S. exports most 

- Feed grains
- Rice
- Wheat
- Cheese
- Poultry meat
- High quality beef
- Pork *(esp bacon and offals)*
- Fruits *(esp grapes, raisins, apples, pears, cherries, peaches, kiwi, canned fruit, juices)*
- Vegetables *(particularly frozen fries, fresh and processed tomatos)*
- Nuts *(almonds, walnuts, pistachios)*

- Wine, bottled
- Soybean meal and refined oil
- Processed grocery products *(particularly soups/broths, cookies and biscuits, and canned dog/cat food*