2

Approved by the World Agricultural Outlook Board

and released June 2, 1999.

Contents

Page

Fiscal 1999 Agricultural Exports 1

Commodity Highlights 4

Economic Outlook 6

Regional Highlights 8

U.S. Agricultural Export Programs 10

Import Highlights 11

Tables

4

Commodity Highlights

The forecast for fiscal 1999 exports of U.S. wheat and flour is raised

$100 million from the February forecast to $4 billion, largely reflecting

a 400,000-ton upward revision in export volume to 29.5 million tons.

This revision is due to reduced competition from the European Union and

Canada. The average export unit value for all wheat is forecast at

$132/ton.

Table 2--U.S. agricultural exports: Value by commodity, 1998-1999
5

Since February, U.S. coarse grain exports are up 2.4 million tons and
6

are lowered 2.1 million tons to 31.7 million tons valued at $8.1 billion.

Soybean and meal exports are now forecast at 27.4 million tons valued at

$5.5 billion. U.S. soybean and meal export volumes were reduced in light

of further upward revisions in the 1998/99 South American soybean

production, stock, and export estimates. The average export unit values

of $210/ton for soybeans and $168/ton for soybean meal remain largely

unchanged, having already been adjusted in February for larger South

American supplies. Reduced export prices and a 100,000-ton reduction in

shipments lowered the forecast for soybean oil $80 million to $600

million. Lagged effects of increased rainfall in Malaysia and Indonesia

further raised estimated palm oil output and pressured prices lower.

The forecast for fiscal 1999 U.S. cotton exports is 900,000 tons valued

at $1.4 billion. The outlook reflects the continued slow pace of U.S.

shipments and continued weakness in foreign demand.

The fiscal 1999 forecast for U.S. exports of livestock, poultry, and

dairy products is lowered $500 million from the February forecast to

$10.6 billion, in large part due to the weaker outlook for hides and

skins. The forecast for beef and pork shipments remains unchanged at 1.7
7

for further problems, most analysts feel that the bottom has been reached

and that growth will return to more normal levels in 2000 and beyond.
8

as higher inflation in the rest of the world reduces its purchasing

power. The dollar will be relatively stable against the currencies of

some of the United States’ largest markets—Canada and Mexico, but might

appreciate modestly against the European Union. The dollar is forecast
9

Some improvement in the general Asian economic situation accounts for the
10

to Asia are forecast at $17.4 billiof
, above the $16.8 billion forecast

in February, but still 12 percent less than shipments in 1998. Forecast

exports to South Korea, the Philippines, and Japan have been increased

since February.

The improved ecofomic situation is particularly a factor for South Korea.

U.S. exports to South Korea have been increased to $2.2 billiof, almost

equal to shipments in 1998. As the economy began to rebound, demand for

meats and also for feed stuffs, has begun to rise again. Since the

beginning of the fiscal year, U.S. exports to South Korea of meats are up

59 percent in quantity and 19 percent in value, while corn exports have

risen by more than 140 percent in quantity and over 80 percent in value,

accounting for much of the change.

Exports to Japan also look somewhat rosier than earlier expected, despite

the continued sluggishness in Japan’s economy. Exports to Japan are

projected 5 percent hi (44) Tj
11

frozen poultry to Middle Eastern countries were assisted by bonuses

totaling $1.14 million.

Commodity Credit Corporation Export Credit Guarantee Programs

Country allocations under the fiscal 1999 export credit guarantee

programs (GSM-102, GSM-103 and the Supplier Credit Guarantee Program) of

$5.3 billion as of May 21, 1999, were 8 percent lower than year-ago

allocations, and sale approvals of $1 billion were 41 percent lower than

fiscal 1998 approvals. On the 29th of March, USDA extended $1 billion

dollars in GSM-102 credit guarantees to the Republic of South Korea.
12

commodities are reduced from 1998 and from February. These declines so

far in 1999, largely in noncompetitive imports, more than offset small

gains in animal and horticulture product imports. Continued robust

economic activity in the United States, as well as the strong dollar, is

raising demand for red meats, fruits and juices, vegetables, and wine.

Demand for most of these high-value products has been rising since 1996

when the dollar started appreciating. Both animal and horticulture

projections for 1999 are increased from 1998 and February. Grain and

feed projections, however, are unchanged from February, although still

slightly above 1998.

Table 5--U.S. agricultural imports: Value by commodity, 1998-1999

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October-March Fiscal Fiscal 1999

Commodity 1998 1999 1998 Projected

Feb. Jun.

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--Billion dollars--

Animals and products 3.397 3.493 6.814 6.8 6.9

Live animals, ex. poultry 0.882 0.789 1.670