OUTLOOK FOR U.S. AGRICULTURAL EXPORTS                           July 11, 1995
             Approved by the World Agricultural Outlook Board
                         (SUMMARY released May 31, 1995)
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OUTLOOK FOR U.S. AGRICULTURAL EXPORTS is published four time a year by the
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Commodity Highlights
 
The fiscal 1995 forecast for U.S. wheat and flour exports is
reduced 400,000 tons from USDA's February forecast to 34.1
million tons because of weak import demand from the former Soviet
Union and the slow pace of global shipments.  Nevertheless,
higher wheat prices resulting from lower global stocks will boost
the value of U.S. wheat and flour exports $100 million to $5.1
billion.  Compared with the previous year, the relatively tight
exportable surplus of major competitors (due mainly to a drought-
reduced crop in Australia) and strong domestic use in the
European Union continue to support U.S. wheat exports.
 
The fiscal 1995 forecast for U.S. coarse grain shipments is
increased 1.4 million tons and $400 million from February's
forecast to 58.4 million tons valued at $6.4 billion.  This is
largely due to an upward revision in corn exports, which are now
forecast at 51.5 million tons valued at $5.6 billion.  China, the
major U.S. competitor in the global corn market in recent years,
is expected to export only 2 million tons, versus the 3 million
tons forecast in February.  As a result, U.S. exports to Japan,
South Korea, and other Asian markets are higher than previously
anticipated.
 
The fiscal 1995 forecast for U.S. rice exports is revised upward
100,000 tons and $100 million to 3 million tons valued at $900
million.  Strong demand from China and Indonesia continues to
bolster prices offered by Asian rice exporters.  In turn, demand
for U.S. rice is higher than previously forecast.
 
The fiscal 1995 forecast for U.S. exports of oilseeds and
products is increased 600,000 tons and $600 million to 31.1
million tons valued at $8.2 billion.  This is due, in part, to an
upward revision of 400,000 tons and $300 million for soybean
exports, which are forecast at 21.8 million tons valued at $4.8
billion.  Brazil's exports of new-crop soybeans are lagging year-
ago levels because producers are withholding soybeans from export
due to low prices.  Therefore, foreign demand for U.S. soybeans,
particularly from Europe, has shifted further than previously
expected.  The forecast for soybean oil exports is raised 180,000
tons to 1.1 million tons and $170 million to $750 million. 
China's imports of U.S. soybean oil in 1995 are expected higher
than previously forecast, following a record purchase in March. 
Soybean meal exports remain largely unchanged at 5.4 million tons
valued at $930 million.
 
The fiscal 1995 forecast for U.S. cotton exports is increased
100,000 tons and $600 million from the February forecast to 2.3
million tons valued at $4 billion.  These adjustments reflect
more rapid growth in China's imports than previously expected. 
China's mills have been unable to procure cotton domestically,
and imports--largely from the United States--are needed to
prevent further declines in consumption and control rising
prices.  Lower production prospects since February in West Africa
and Uzbekistan also support stronger U.S. exports.  China's
unanticipated imports and concerns about next year's China and
Pakistan cotton crops have boosted prices to near-record highs
recently.
 
The forecast for fiscal 1995 exports of U.S. livestock, dairy,
and poultry products is increased $500 million from the February
forecast to a record $9.8 billion.  Livestock product exports are
forecast up $300 million to $6.9 billion.  Increased U.S.
production, lower prices, and a weaker dollar support a $200-
million increase in red meat exports to $3.6 billion.  Beef
exports to Japan continue strong, and U.S. variety meat exports
to Russia, Japan, and Hong Kong are expected higher.  Sales of
U.S. hides and skins to South Korea, Taiwan, and Italy are
surpassing previous expectations, leading to a $100-million
increase in the forecast to $1.6 billion.  The continued surge in
poultry exports to Russia and Hong Kong resulted in a $200-
million increase in the poultry and products forecast to a record
$2.1 billion.  The forecast for U.S. dairy exports remains
unchanged at $800 million.
 
Fiscal 1995 exports of U.S. horticultural products are forecast
$500 million above the February forecast to a record $9.4
billion.  The forecasts for fresh and processed fruits and
vegetables are revised upward by $100 million and $200 million to
$3.4 billion and $2.6 billion, respectively.  Growth in U.S.
fruit and vegetable exports to Japan and Canada, two of the
largest markets, is significantly higher than previously
expected.  The forecast for tree nuts remains unchanged at $1.1
billion.  Highly processed food and beverage exports account for
the remaining $200-million upward revision in U.S. horticultural
exports.  Market liberalization, rising incomes, favorable
exchange rates in many markets, a growing demand for healthful
foods, and on-going market promotion activities in major foreign
markets continue to expand U.S. exports.  Growth in these markets
is expected to more than offset a decline in U.S. sales to Mexico
due to the peso devaluation last December.
 
Economic Outlook
 
World gross domestic product (GDP) is expected to grow 3 percent
in 1995, slightly lower than expected in February.  Prospects
dipped because of lower growth expectations in Japan and the
United States, but world growth is still expected to be the
strongest since 1989.  Income growth remains strong in the major
U.S. markets of Europe, Canada, and the Pacific Rim, and the
weaker dollar further increases export prospects, particularly in
Europe and Japan.
 
Regional Highlights
 
Exports to the three largest markets for U.S. agricultural
products, Japan, the European Union (EU), and Canada, remain
strong and the forecasts are revised upward to $9.7 billion, $7.8
billion, and $5.9 billion, respectively.  Exports to Japan were
revised upward $100 million largely because strengthening U.S.
corn and cotton prices will increase export value.  Japan's
imports of U.S. meat, fruit, and vegetables continue to reach
record levels, supported by the strong yen relative to the
dollar.
 
Exports to the EU are revised upward $400 million to $7.8
billion, (the export figures have been revised to include
Austria, Finland, and Sweden in the EU), as U.S. soybean exports
are expected to be the highest since 1987.  The value of U.S.
oilseed and product exports through March was nearly $2 billion,
as crush margins favored the import of soybeans into the EU. 
Economic recovery in the EU and the strength of European
currencies relative to the dollar are also advancing U.S. exports
of fruits, nuts, and prepared vegetables.
 
U.S. exports to Canada are forecast at $5.9 billion, $200 million
higher than in February, due to higher average prices for fresh
vegetables and strong demand for prepared vegetables.  Despite
the weaker Canadian dollar, red meat and poultry meat exports are
expected to gain as lower U.S. prices favor imports.
 
The forecast for U.S. exports to South and Southeast Asia (Other
Asia in table 4) is raised to $3.7 billion.  Increased wheat and
cotton exports to Pakistan and Bangladesh through March have
raised the export value to South Asia.  Exports totaled $572
million through March, but the pace will likely slow during the
second half of the year as most of the expected wheat exports
have been shipped.  But further cotton shipments are expected,
which will likely raise exports to the highest since 1990.
 
Exports to Southeast Asia totaled $1.4 billion through March, 48
percent higher than a year earlier.  The United States exported a
record $1.8 billion worth of goods to the region last year, and
1995 exports will easily surpass that level.  Much of the
expected gain is due to sharply higher cotton exports to
Indonesia, and increased soybean and vegetable oil shipments to
Indonesia, Malaysia, and Singapore.  The United States has also
exported more corn to the region since China reduced its exports. 
U.S. corn exports totaled 572,000 tons during October-March,
compared with 1,550 tons during the same period last year.  The
region's strong economy is also spurring increased U.S. exports
of red meats, poultry, fruits, and vegetables.
 
The forecast for Latin America is revised upward $500 million to
$7.6 billion.  Exports to Latin America, excluding Mexico, are 40
percent higher than a year earlier at $2.3 billion through March. 
Exports have risen to most of the Central and South American
countries, but the largest increase is in Brazil, where U.S.
exports are forecast at $800 million, more than three times
higher than last year.  Through March, exports totaled $466
million because of gains in rice, corn, and soybeans.  The pace
of exports to Brazil should slow in the last half of the year as
Brazil's crops become available.
 
The forecast for exports to North Africa and the Middle East is
revised upward $600 million to a record $2.1 billion and $2.2
billion, respectively.  U.S. wheat, corn, and cotton shipments to
Egypt are up sharply and continue to boost sales to the North
Africa region.  Exports to the Middle East are rising on
increased sales of rice, corn, and cotton to Turkey; higher year-
to-date rice, corn, and vegetable oil exports to Iran; and larger
corn and barley sales to Israel.
 
The forecast for exports to the former Soviet Union (FSU) is
revised downward $100 million to $1.1 billion, but Russia is
unchanged at $800 million.  With very weak import demand for
wheat and coarse grains in the FSU, pork and poultry meat exports
are supporting U.S. exports in 1995.  Last year the United States
exported a record $258 million in poultry meat to Russia, making
Russia the leading market in 1994.  U.S. exports advanced as
consumer demand for relatively cheaper poultry meat exceeded
domestic output.  Strong sales have continued into 1995 as the
United States has shipped $243 million in poultry meat through
March.  Russia has announced that the tariff on poultry products
will increase from 20 percent to 25 percent in July 1995. 
However, the effect on exports could be slight because lower U.S.
prices may partially offset the tariff's rise.
 
China
 
The forecast for U.S. agricultural exports to China is revised
upward $600 million to a record $2.3 billion.  Exports totaled
$1.3 billion during October-March, and are advancing because of
unusually strong cotton, corn, and soybean oil sales.  Wheat
shipments are also likely to surpass 1994 and export value should
rise because of higher wheat prices in 1995.
 
Although cotton production in China increased in marketing year
1994/95, China is still importing near record amounts of cotton
to ease regional shortages and contain domestic prices.  During
October 1994-March 1995 China imported nearly 340,000 tons of
cotton from the United States.  U.S. corn exports to China
reached 1.1 million tons through March.  China is expected to
import a total of 3 million tons of corn from all sources in 1995
because of higher domestic prices and tight supplies in major
meat producing regions.
 
The United States is exporting record quantities of soybean oil
to China in 1995.  As incomes have risen in urban areas, demand
for vegetable oil is strong for home consumption and an expanding
food processing industry.  In 1994, The Government of China
reduced tariffs on vegetable oils and began to import to help
curb inflation.  The relatively high price for palm oil has
encouraged increased imports of soybean oil.  The United States
shipped nearly $290 million in soybean oil during the first half
of fiscal 1995.
 
South Korea
 
U.S. exports are expected to rise nearly 50 percent to a record
$3.1 billion in fiscal 1995, as total South Korean imports have
surged in recent months.  Most of the U.S. gain in 1995 has come
in corn exports.  Corn exports during October-March totaled 4.4
million tons valued at $477 million, compared with 107,000 tons
and $14 million a year earlier.  With corn exports banned by the
Government of China, South Korea has turned to the United States
for almost all of its corn imports, and the United States will
likely export record quantities to South Korea in 1995.
 
South Korea is a top market for U.S. cotton, and high cotton
export prices in 1995 are adding to record export value.  Cotton
exports during October-March totaled $213 million, 40 percent
higher than a year earlier.  The improved world economy is
leading to increased exports of U.S. hides and skins for South
Korea's leather industry.
 
Strong economic growth in Korea (nearly 8 percent real GDP growth
in 1994, and projected growth of over 7 percent in 1995) has
boosted demand for consumer food products.  At 35,000 tons, U.S.
beef exports were 39 percent higher through March, making Korea
the third leading destination for U.S. beef.  Fruit and vegetable
shipments are likely to rise above last year's record.
 
Mexico
 
The forecast for U.S. agricultural exports to Mexico remain
unchanged from February at $3.6 billion.  Exports through March
totaled nearly $2 billion, 4 percent higher than a year earlier. 
However, exports fell sharply during the second quarter because
of the depreciating peso.  U.S. exports to Mexico during January-
March 1995 dropped 29 percent from a year earlier to $794
million.
 
The commodity exports suffering the largest declines since the
December devaluation are high-value products such as meats,
fruits, and vegetables.  During January-March 1995, beef exports
dropped 62 percent compared with 1994, and fruit and vegetable
exports fell 45 percent.  But for the fiscal year to date, beef
exports are still 13 percent higher than last year at $80
million.  Fruit and vegetable exports are down 6 percent. 
Exports of grains and oilseeds have not fallen as much as the
high-value products.
 
In April 1995 Mexico announced a new producer price policy for
corn.  The policy establishes a "reference price" derived
directly from international prices as the floor price for
purchases by CONASUPO, the government's buying agency.  The
reference price for white corn is 715 new pesos per metric ton or
about $110.  The policy, which is designed to encourage private
sector participation in the marketing of Mexico's corn crop, may
serve as a stepping stone to the government's total withdrawal
from the domestic corn market beginning in 1996.  However, the
corn flour subsidy designed to keep tortillas inexpensive is
likely to continue for several years.  Private sector
participation in purchasing corn from farmers has already
increased sharply over the last 2 months, while CONASUPO is
gradually withdrawing from the market as a supplier of corn for
livestock feed.
 
Mexico's feed mills began drawing down stocks and buying
domestically produced sorghum and corn because the peso
devaluation led to a sharp increase in the price of imported
sorghum.  After an initial drop, sorghum imports from the United
States have approached the pre-devaluation level during the last
several weeks, as feed mill stocks are low and prices of domestic
sorghum and corn have increased to the point where imports are
now attractive.
 
U.S. Agricultural Export Programs
 
U.S. Food Aid Programs
 
The P.L. 480 program is the primary means by which the United
States provides food assestance overseas.  The assistance is
provided through three separate porgram authorities.  Title I of
P.L. provides for sales of U.S. agricultural commodities to
developing countreis through long-term concessional sales.  This
program is administered by the Foreign Agricultural Service of
USDA.  Title II provides for donations of humanitarian food
assistance to needy people in foreign countries, and Title III
provides food on a grant basis to least developed countries. 
Titles II and III are administered by the Agency for International
Development (AID).
 
The current estimate for P.L. 480 appropriations (progran level) in
fiscal 1995 is as follows:  Title I, $260.1 million; Title II,
$821.1 million; and Title III, $64.9 million.  These levels reflect
the President's proposed rescissions for fiscal 1995 which totaled
$60.2 million for Title I and $92.5 million for the Title III
program.  The proposed rescissions will make available an estimated
3.5 million metric tons of food assistance in fiscal 1995. 
 
On April 19, USDA announced revised country and commodity
allocations for the third quarter of fiscal 1995 under Title I of
the P.L. 480 program and the Food for Progress (FFP) program
funded under Title I appropriations.  USDA has allocated $219.5
million for commodity loans and grants among 19 countries and is
holding an additional $17.7 million in reserve to fund unforeseen
needs during fiscal 1995.  Third-quarter allocations have been
eliminated for Albania, El Salvador, Guatemala, Morocco, and
Yemen; and reduced by $2 million and $2.5 million for the former
Yugoslavian Republic of Macedonia and the Philippines,
respectively.
 
As of May 17, AID had announced approved programs under Title II
totaling $868.9 million.  African countries are programmed to
receive 50 percent with Rwanda, Liberia, Angola, and Ethiopia the
major recipients.  Asian and Latin American countries are
programmed to receive 20 percent and 16 percent, respectively. 
The former Yugoslavia republics will receive the remainder. 
Countries receiving Title III allocations include Bangladesh,
Guyana, and Honduras.
 
For fiscal 1996, the President proposes a program level of just
over $1 billion for P.L. 480 food assistance that is expected to
provide total commodity shipments of approximately 3.4 million
metric tons.  This includes $177.9 million for Title I, $795.7
million for Title II, and $50 million for Title III.  The reduced
program level recommended in fiscal 1996 results from limitations
on funding for U.S. international programs and the need to
increase disbursements for other priority activities.
 
CCC Export Credit Guarantee Programs
 
As of May 12, GSM-102 and GSM-103 credit guarantee applications
received by the CCC amounted to $1,726.4 million, approximately
16 percent below the same time last year.  The major purchaser
under the credit guarantee programs in fiscal 1995 has been
Mexico; $913.7 million under GSM-102 and $2.5 million under GSM-
103.
 
The Export Enhancement Program and the Dairy Export Incentive
Program
 
Export Enhancement Program (EEP) sales, particularly of wheat and
table eggs, are strong in fiscal 1995 as of May 19.  EEP bonuses
for fiscal 1995 of $300.7 million are down 61 percent from last
year.  Higher global wheat prices continue to keep EEP bonuses
low, although bonuses have crept up slightly for more contested
markets in recent weeks.  DEIP sales also are brisk after the
January 20 announcement of the 1995 program.  DEIP bonuses were
$59.2 million as of May 26.
 
Import Commodities
 
The fiscal 1995 agricultural import forecast is $29.5 billion, up
$1 billion from the February forecast.  Coffee, rubber,
horticultural products, grains, feeds and products, and oilseeds
showed second-quarter (January-March) gains, prompting the
advance.
 
Coffee prices continue to outpace previous expectations, and even
without a repeat of last year's weather-related production
problems, tight supplies are expected.  The fiscal 1995 import
value estimate is $4 billion, as reduced harvests in Latin
America and Africa are projected for the 1994/95 crop.  Volume is
expected to be 1.1 million tons.  Reduced coffee shipments during
October-March prompted a 100,000-ton reduction in the coffee
volume forecast.  Roasters are facing low inventories, but are
buying as little as possible given high prices.  For the first
half of fiscal 1995, Mexico was the leading coffee supplier to
the United States.
 
Last year's decline in Malaysian rubber production continues to
drive up world prices.  Although rubber import volume decreased
only marginally, import value surged 60 percent to nearly $700
million for the fiscal year to date.  The forecast for fiscal
1995 rubber imports has been raised $200 million to $1.3 billion.
 
Vegetable imports are forecast at $3 billion, up $100 million
from the previous forecast, but volume for fresh and frozen
vegetables is lowered 100,000 tons to 2.4 million tons.  Imports
of winter fresh vegetables and tomatoes from Mexico advanced due
to the short Florida crop, and higher prices have boosted import
value.  But overall volume is down due to lower potato, onion,
and cucumber shipments.
 
The forecast for wine and beer imports is increased to $2.2
billion, as imports from Mexico, the European Union (EU),
Australia, and Chile advanced in value due to higher world prices
in the first half of 1995.  Forecast volume is unchanged from
February.
 
The grain import forecast is 5.1 million tons, up 600,000 tons
from February, because of higher-than-expected wheat, oats, and
barley imports during October-March.  Imports are still down
sharply from fiscal 1994's high levels.  The larger import volume
and higher wheat and barley prices have resulted in a $100-
million upward revision in grain imports to $600 million.
 
Strong year-to-date feed and grain product imports boosted the
forecast $400 million to $1.6 billion.  Higher imports of
biscuits and feeds and fodders from Canada, and pasta from the EU
prompted the revision.  Volume is projected at 2.5 million tons,
up 500,000 tons from the previous forecast.
 
Rising consumption, mainly for vegetable oils, has boosted world
prices for both oilseeds and oils, advancing the fiscal 1995
import estimate to $1.6 billion, up $100 million from February. 
The import volume forecast is 3.4 million tons on higher October-
March oilseed and product shipments.
 
Reduced beef shipments from Australia, due to drought, lowered
the beef volume forecast by 100,000 tons to 800,000 tons. 
Slightly higher prices maintain beef import value at $2.1
billion.  Cattle imports are expected at $1.4 billion, $100
million above the February forecast because of increased imports
of higher-priced cattle from Canada.
 
The tobacco import forecast fell $400 million to $500 million. 
Imports slowed dramatically during the second quarter of fiscal
1995 as lower U.S. cigarette production, abundant leaf stocks,
and continued restrictions on imported tobacco use limited
imports.  The volume forecast is 200,000 tons, 100,000 tons less
than the February forecast.
 
Higher coffee import value and increased vegetable shipments
raised the forecast for U.S. imports from Mexico by $500 million
to $3.6 billion.  The forecast for imports from Brazil is reduced
$100 million to $2.5 billion because of lower expected tobacco
shipments.  Rising rubber prices due to heightened demand
increased the forecast for Other Asian countries (including
Indonesia, Malaysia, and Thailand) $200 million to $3.4 billion. 
Higher-than-expected beer and wine, vegetable oil, and pasta
imports for October-March boosted the EU forecast $100 million to
$5.4 billion.
 
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