OUTLOOK FOR U.S. AGRICULTURAL TRADE                        February 22, 1999
February 1999, ERS-AES-21
               Approved by the World Agricultural Outlook Board
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OUTLOOK FOR U.S. AGRICULTURAL EXPORTS is published four times a year by the
Economic Research Service, U.S. Department of Agriculture, Washington, DC
20036-5831. This release contains only the text of the report -- tables and
graphics are not included.

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Approved by the World Agricultural Outlook Board,
Economic Research Service, and Foreign Agricultural Service, 
U.S. Department of Agriculture OUTLOOK for U.S. Agricultural Trade

February 22, 1999AES-21


FISCAL 1999 AGRICULTURAL EXPORTS FORECAST TO FALL BELOW $50 BILLION

U.S. agricultural exports in fiscal 1999 are forecast at $49 billion, 
down $1.5 billion from the November estimate and $4.6 billion below 
fiscal 1998.  Weak world demand and large world supplies largely account 
for the decline.  Excluding Mexico, year-to-year declines are forecast in 
all major markets.  Soybean and soybean product exports are forecast down 
almost $3.5 billion from last year, as both volume and prices have 
fallen.  The severe decline in U.S. production and weak world prices have 
sharply reduced U.S. cotton exports.  The decline in exports of poultry 
meat from 1998 largely reflects reduced Russian imports and lower prices.  
Other major export commodities are forecast to record minor changes in 
value from 1998 as declining prices are offset by increasing volume.  For 
example, the volume of corn exports is forecast up 17 percent, to 44 
million tons, while the value is virtually unchanged at $4.3 billion.

U.S. agricultural imports are forecast to be $38 billion in fiscal 1999, 
up $1 billion from 1998.  Most of the increase is accounted for by 
horticultural products.  The agricultural trade surplus, forecast at $11 
billion, is the lowest since 1987.

As of this issue, this publication is renamed Outlook for U.S. 
Agricultural Trade from Outlook for U.S. Agricultural Exports, reflecting 
the increased emphasis on imports.

Table 1--U.S. agricultural trade, fiscal years, 1994-1999
-- Year ending September 30 --
-----------------------------------------------------------------------
Item            1994    1995   1996     1997    1998   1999 Projected
                                                       Nov. Feb.
-----------------------------------------------------------------------
--Billion dollars--
Exports         43.9    54.6    59.8    57.3    53.6    50.5    49.0

Imports         26.6    29.9    32.6    35.8    37.0    38.5    38.0

Balance        17.3    24.7    27.2    21.5    16.6    12.0    11.0

--Million metric tons --
Ex. volume     127.5   169.7   158.4   147.3   142.0   149.8   146.7
-----------------------------------------------------------------------
This outlook reflects commodity forecasts in the Feb. 10, 1999, World 
Agricultural Supply and Demand Estimates.

Approved by the World Agricultural Outlook Board
and released February 22, 1999.


Contents

Page
Fiscal 1999 Agricultural Exports and Imports                            1
Commodity Highlights                                                    4
Economic Outlook                                                        6
Regional Highlights                                                     8
U.S. Agricultural Export Programs                                      10
Import Highlights                                                      11




Tables
                                                                      Page
Table 1--U.S. agricultural trade, fiscal years 1994-99                  1
Table 2--U.S. agricultural exports: Value by commodity, 1997-99         4
Table 3--U.S. agricultural exports: Volume by commodity, 1997-99        5
Table 4--U.S. agricultural exports: Value by region, 1997-99            9
Table 5--U.S. agricultural imports: Value by commodity, 1997-99        12
Table 6--U.S. agricultural imports: Volume by commodity, 1997-99       13
Table 7--U.S. agricultural imports: Value by region, 1997-99            14
                                          
Coordinator (ERS):
Carolyn Whitton  202-694-5287
Leader, Trade Data Analysis
Agriculture & Trade Outlook Br.
Market & Trade Economics Div.
Economic Research Service(ERS)

Coordinator (FAS):

Ernest Carter  202-720-2922
Special Assistant
Office of Deputy Administrator
Commodity and Marketing Programs
Foreign Agricultural Service(FAS)


U.S. Department of Agriculture
Washington, D.C. 20250

The forecasts in the Outlook for U.S. Agricultural Trade are based on 
information provided by the Market & Trade Economics Division of the 
Economic Research Service (ERS) and the Commodity Divisions of the 
Foreign Agriculture Service (FAS).  Editorial support is furnished by 
Martha R. Evans, Information Services Division, ERS.  All telephones 
are area code 202.

Commodity Information--ERS: Karen Ackerman (Export Programs, 694-5264); 
Ed Allen (Wheat/Coarse Grains, 694-5288); Mark Ash (Oilseeds, 694-
5289); Nathan Childs (Rice, 694-5292); Andy Jerardo (Macro economic 
projections & Imports, 694-5323); Mildred Haley (Beef & Pork, 694-
5176); Dave Harvey (Poultry, 694-5177); Gary Lucier (Horticulture, 694-
5253); Steve MacDonald (Cotton, 694-5305); Stacey Rosen (Food Aid, 694-
5164).

Commodity Information--FAS: Arnella Trent (Tobacco, 720-9497); Lloyd 
Coonrod (Seeds, 720-9491); Kimberly Svec (Dairy & Livestock 720-8252; 
Nancy Morgan (Poultry, 720-1372); Alan Holz (Oilseeds, 720-0143); Linda 
Kotschwar (Grains and Feeds, 690-1147); Dee Linse (Export Programs, 
720-9847); Peter Burr (Cotton, 720-9510); Debra Pumphrey (Horticultural 
and Tropical Products, 720-8899). 

Regional projections--ERS: For regional information call: Chris Bolling 
(Brazil, 694-5212); Nancy Cochrane (East Europe, 694-5143); Hunter 
Colby (China, 694-5215); Fred Crook (Hong Kong, 694-5217); John Dyck 
(Japan & South Korea, 694-5221); Anwarul Hoque (South Asia, 694-5222); 
Sophia Wu Huang (Taiwan, 694-5225); Susan Leetma (European Union, 694-
5153); Michael Kurtzig (North Africa and the Middle East, 694-5152); 
Bill Liefert (New Independent States, 694-5156); John Link (Mexico, 
694-5228); Suchada Langley (Canada, 694-5227); Gary Vocke (Southeast 
Asia, 694-5241).
                                               

The Outlook for U.S. Agricultural Trade is published in February, 
May/June, August, and November/December.  The next issue will be 
released June 2, 1999.  The summary may be accessed electronically; 
call (202) 694-5050.

The U.S. Department of Agriculture (USDA) prohibits discrimination in 
all its programs and activities on the basis of race, color, national 
origin, gender, religion, age, disability, political beliefs, sexual 
orientation, and marital or family status. (Not all prohibited bases 
apply to all programs). Persons with disabilities who require 
alternative means for communication of program information (braille, 
large print, audiotape, etc.) should contact USDA's Target Center at 
(202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of 
Civil Rights, Room 326-W, Whitten Building, 14th and Independence 
Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice or 
TDD). USDA is an equal opportunity provider and employer.

Commodity Highlights

The forecast for fiscal 1999 exports of U.S. wheat and flour is lowered 
$300 million from November to $3.9 billion.  Swamping an upward 
adjustment in wheat flour export volume, the forecast for wheat 
shipments is reduced 3 million tons to 28.5 million tons.  The average 
export price for all wheat remains unchanged at $130/ton.  This outlook 
still reflects a year-over-year increase in wheat export volume 
although not as large as envisioned in November.  Since then, world 
import demand was reduced and Argentina is now expected to export more.


Table 2--U.S. agricultural exports: Value by commodity, 1997-1999
---------------------------------------------------------------------
                                  Oct.-Dec.     Fiscal  Fiscal 1999
Commodity                        1997   1998    1998    Projected
                                                        Nov.    Feb.
-----------------------------------------------------------------------
                                       --Billion dollars--
Grains and feeds 1/             3.851   3.910  14.109   13.9    13.8
  Wheat & flour                 1.096   1.045   3.887    4.2     3.9
  Rice                          0.276   0.353   1.134    1.0     1.1
  Coarse grains 2/              1.399   1.402   4.990    4.7     4.8
  Corn                          1.159   1.279   4.261    4.2     4.3
  Feeds and fodders             0.650   0.621   2.411    2.3     2.3

Oilseeds and products           4.683   3.151  11.090    9.3     8.6
  Soybeans                      3.226   1.945   6.117    5.1     4.7
  Soybean meal                  0.637   0.328   1.944    1.4     1.2
  Soybean oil                   0.231   0.258   0.881    0.8     0.7

Livestock products              2.095   1.901   7.626    8.1     7.9
  Beef, pork & variety meats    1.080   0.974   4.045    4.5     4.2
  Hides & skins, incl. furs     0.354   0.255   1.358    1.5     1.4

Poultry & products              0.727   0.549   2.712    2.3     2.3
  Poultry meat                  0.632   0.461   2.347    1.8     1.9
Dairy products                  0.236   0.224   0.897    0.9     0.9
Tobacco, unmanufactured         0.373   0.384   1.448    1.4     1.4
Cotton & linters                0.656   0.681   2.537    1.6     1.4
Seeds                           0.253   0.254   0.838    0.9    0 .9
Horticultural products          2.820   2.763  10.318   10.1    10.0
  Fruits & preparations         0.842   0.823   3.202    3.0     2.9
  Vegetables & preparations     0.714   0.740   2.805    2.8     2.8
  Tree nuts & preparations      0.458   0.414   1.215    1.3     1.3
Sugar, tropical, and other      0.537   0.516   2.054    2.0     1.9

    Total 3/                   16.231  14.333  53.629   50.5    49.0
-----------------------------------------------------------------------
1/ Includes pulses and corn products.  2/ Includes corn, barley, 
sorghum, oats, and rye.  3/ Totals might not add due to rounding.

U.S. coarse grain exports are raised 1.2 million tons and $100 million 
to 49.4 million tons valued at $4.8 billion.   The export forecast for 
corn is increased 1.5 million tons to 44 million tons and, with the 
export price of $98/ton unchanged, export value is raised $100 million 
to $4.3 billion.  Partially offsetting corn volume gains, sorghum 
exports are reduced 200,000 tons since Japan is expected to shift to 
corn.  The outlook for U.S. corn exports has improved since November 
with upward revisions in demand from Japan, Korea, and Malaysia and 
reduced competition from Argentina.

Fiscal 1999 rice exports are forecast to reach 3.2 million tons valued 
at $1.1 billion.  This represents a 200,000-ton increase from the 
November estimate.  Export value is restrained due to somewhat lower 
prices, the result of a larger proportion of rough rice shipments and 
generally reduced world rice prices.  U.S. export volume is increased 
due to larger shipments to Brazil.

Reflecting downward adjustments to both export volume and prices, 
fiscal 1999 U.S. oilseed and products exports are lowered 1.3 million 
tons and nearly $800 million to 33.8 million tons valued at $8.6 
billion.  Soybean exports are reduced 800,000 tons and $400 million to 
22.3 million tons valued at $4.7 billion.  This reflects an average 
export price of $212/ton for soybeans, 4.5 percent lower than the 
November


Table 3--U.S. agricultural exports: Volume by commodity, 1997-99
---------------------------------------------------------------------
                                 Oct.-Dec.      Fiscal  Fiscal 1999
        Commodity               1997  1998      1998    Projected 
                                                Nov.    Feb.
---------------------------------------------------------------------
                                        --Million metric tons--
Wheat                           6.729   7.827  25.800   31.5   28.5
Wheat flour                     0.141   0.246   0.459    0.5    0.6
Rice                            0.734   1.147   3.315    3.0    3.2
Coarse grains 1/               11.597  14.252  43.960   48.2   49.4
  Corn                          9.596  13.015  37.697   42.5   44.0
Feeds & fodders                 3.058   3.129  11.688   11.9   11.9
Oilseeds and products          15.564  12.362  36.018   35.1   33.8
  Soybeans                     12.063   9.052  23.287   23.1   22.3
  Soybean meal                  2.359   1.924   8.464    7.8    7.2
  Soybean oil                   0.381   0.413   1.396    1.2    1.2
Beef, pork & variety meats      0.398   0.390   1.559    1.7    1.7
Poultry meat                    0.688   0.562   2.663    2.3    2.3
Animal fats                     0.232   0.187   1.365    1.3    1.3
Cotton & linters                0.401   0.462   1.602    1.0    0.9
Horticultural products          1.956   1.971   7.414    7.3    7.1
Other                           1.641   1.876   6.169    6.0    6.0
  Total agriculture            43.139  44.411 142.012  149.8  146.7
  Major bulk products 2/       31.524  32.740  97.964  106.8  104.3
-----------------------------------------------------------------------
1/ Includes corn, barley, sorghum, oats, and rye. 2/ Includes wheat, 
rice, coarse grains, soybeans, and cotton.
estimate.  Also due to lower shipments and export prices, soybean meal 
and oil exports are reduced to $1.2 billion and $7.2 billion, 
respectively.  Large upward revisions in 1998 and 1999 Brazilian and 
Argentine soybean crops forced increases in South American oilseed 
ending stocks and exports.  Rising global supplies, increased foreign 
competition, and weak global demand have weakened the export outlook 
for U.S. soybeans and meal.  Improved rainfall in Southeast Asia will 
lead to some palm oil output recovery, which is expected to lower U.S. 
soybean oil shipments and export prices.

The forecast for fiscal 1999 U.S. cotton exports is lowered to more 
than 900,000 tons valued at $1.4 billion.  This revision largely 
reflects continued weakness in foreign demand for cotton.  A case in 
point is Turkey.  Faced with increased competition from Asian textiles 
and a slowing economy, Turkeys import demand for cotton is reduced 
nearly 1 million 480-lb bales since November.

The fiscal 1999 forecast for U.S. exports of livestock, poultry, and 
dairy products is lowered $200 million from November to $11.1 billion.  
The forecast for beef and pork shipments remains unchanged at 1.7 
million tons, but downward revisions in export prices reduces export 
value $300 million to $4.2 billion.  Large domestic pork supplies 
continue to pressure U.S. beef and pork prices.  At the same time, 
higher than earlier anticipated cattle inventories and beef production 
are placing downward pressure on beef prices.  Poultry meat shipments 
remain unchanged at 2.3 million tons, but somewhat stronger prices 
support a $60 million increase to $1.9 billion.  There is little change 
in the export outlook to Russia, but turkey and poultry exports to 
Mexico were stronger than expected during the first quarter of fiscal 
1999.  Dairy products remain unchanged at $900 million.

The fiscal 1999 forecast for U.S. horticultural exports is lowered $100 
million from the November forecast to $10 billion.  This revision is 
due to an expected reduction in fresh orange exports since a freeze 
sharply reduced the size of the California orange crop.  U.S. fresh 
orange exports are forecast more than a third lower than last seasons 
record shipments of 645,000 tons.  Accordingly, the forecast for fruits 
and preparations is lowered $100 million to $2.9 billion.  Forecasts 
for vegetables and tree nuts remain unchanged at $2.8 billion and $1.3 
billion, respectively.  The outlook for total U.S. horticultural 
exports assumes continued strong sales to Mexico, and a slowdown in the 
rapid growth of sales to Canada from the previous years pace.  Japans 
economic recession and continued weakness in other Asian economies 
continue to hamper exports to the Asian region.


Economic Outlook

World economic growth in 1999 will remain low at 2 percent, the same 
pace as in 1998.  The United States and Europe are expected to slow 
down, but North America will still out-grow most major regions of the 
world in 1999.  Japans high savings rate and continuing financial 
problems will keep growth in Japanese consumption and investment 
spending negative.  Conditions in Southeast Asia are slowly improving, 
but further contraction is projected in 1999, while improvements occur 
in 2000.  In Latin America, because of Brazils deep recession 
resulting from currency devaluation and tighter fiscal and monetary 
policies, economic growth will be almost zero.  Russias financial 
collapse dashed previous expectations of recovery in the former Soviet 
Republics.

Japan Remains in Recession in 1999
Despite another fiscal stimulus package late in 1998 of more than $200 
billion, Japanese domestic demand has not budged.  Private consumption 
continues to contract.  Business fixed investment is expected to fall 
again as machinery orders and construction starts continue their 
decline.  Contributing to this decline are higher long-term interest 
rates as government bond prices have fallen.  Since higher rates have 
boosted the yens exchange value, the export sector has lost some 
competitiveness.

Given that fiscal policy has so far failed to revive the Japanese 
economy, the United States is pushing Japan to loosen its monetary 
policy.  More liquidity will drive down interest rates and weaken the 
yen, setting the stage for economic recovery in 2000.  But a more 
competitive yen will almost surely increase the U.S. trade deficit with 
Japan and weaken Japanese demand for U.S. agricultural exports.  
Furthermore, more competitive Japanese exports will crowd out other 
Asian exporters and cost them export income, which could be spent on 
U.S. products.

Brazil's Impact on U.S. Exports
The devaluation of the Brazilian real and the expected worsening 
recession in Brazil in 1999 will lower most economic growth in South 
America, particularly with its Mercosur trade partners.  The United 
States exported $5.4 billion of agricultural products to Latin America 
(minus Mexico) in fiscal 1998, or 10 percent of total U.S. agricultural 
exports.  Together, Brazil and Argentina imported less than $1 billion 
in farm products from the United States last year.  Slower growth in 
other Latin American countries will dampen U.S. farm sales to the 
region.

Since Brazil is a major exporter of farm commodities, its more 
competitive currency will generate export gains at the expense of 
competing U.S. commodities in world markets, further driving down 
prices.  The contagion effect of fewer investment funds heading to 
Latin American emerging markets also will raise interest rates in those 
countries, further dampening their domestic and import demand.

Exchange Rates
The dollar appreciated 7.5 percent in inflation-adjusted, trade-
weighted terms vis-a-vis foreign currencies in 1998.  Since 1996, the 
dollar has strengthened by 15 percent in overall real exchange value.  
As economic growth in foreign markets slowed, the U.S. total trade 
deficit increased markedly and the U.S. agricultural trade surplus 
diminished sharply.

Given that the dollar appreciated by 28 percent against the developing 
Pacific-Asian countries since 1997 and this is combined with 2 years of 
Asian recession, the United States should expect continued weak demand 
from this prime market for U.S. agricultural exports.  Against Latin 
American currencies, the inflation-adjusted dollar actually depreciated 
slightly over the past 2 years because of managed exchange rates and in 
1998 overvaluation of currencies like the Brazilian real.  
Nevertheless, the reals devaluation and weaker economies in 
neighboring countries offsets the dollars competitiveness gained since 
1997.

U.S. exporters also should not expect much help from major markets in 
Europe, Japan, and Canada.  The dollar appreciated 14 percent against 
the European currencies and 40 percent against the Japanese yen since 
1996, and 35 percent against the Canadian dollar since 1992.  But, the 
dollar gained only 1 percent in real terms against the Mexican peso in 
1998 despite almost a 16-percent nominal appreciation because Mexicos 
inflation rate kept pace with the pesos nominal depreciation.

Forecasts call for a gradual depreciation of the dollar in 1999 and 
2000 as foreign markets slowly recover, as investment funds trickle 
back to emerging markets, and as expected returns on U.S. equities and 
other assets shrink.  The dollar is expected to stabilize against major 
Asian currencies, depreciate marginally against the euro, depreciate 
against the Canadian dollar, and appreciate against the Mexican peso 
and most Latin American currencies.  Any increase in U.S. export price 
competitiveness, especially for agricultural products, would be 
incremental since world commodity supplies and production capacity are 
in surplus and competition for export sales is intense.


Regional Highlights

The largest changes in February projections of U.S. agricultural 
exports are to Mexico, the European Union (EU), and Japan.  Exports to 
Mexico have been increased, more than offset by decreases to the EU, 
Japan, and other destinations.

Fiscal 1999 exports to Mexico are now projected at $6.7 billion, up 
sharply from both 1998 and the November projection.  Although only a 
few months of actual shipment data for fiscal 1999 are so far 
available, total U.S. exports to Mexico already show substantial gains.  
Some of the gain is in products like cotton, exports of which are 
likely to decline later in the year because of a very short U.S. crop.  
However, a wide range of other U.S. exports to Mexico, which have shown 
early gains, may be expected to continue strong throughout the year.  

The decrease in projected exports to the EU reflects the general 
lowering of total U.S. export projections in February compared with 
November.  The EU is now expected to take $7.3 billion in U.S. exports, 
down from $8.3 billion in November and $8.5 billion in 1998.  Lower 
projected soybean and soybean meal prices and greater exporter 
competition are primarily responsible. 

Japan's continued recession, lower meat prices, lower prices and 
stronger export competition for soybeans and meal, and increased wheat 
export competition are combining to reduce the outlook for 1999 U.S. 
exports to Japan.  At $8 billion, U.S. agricultural exports to Japan 
are projected 15 percent below 1998 and 9 percent less than the 
November estimate.


Table 4--U.S. agricultural exports: Value by region, 1997-99
-----------------------------------------------------------------------
                                  Oct.-Dec.     Fiscal  Fiscal 1999
                Region          1997    1998    1998    Forecast
                                                        Nov.   Feb.
-----------------------------------------------------------------------
                                        --Billion dollars--
Asia                            6.135   5.135   19.668  18.0   16.8
  Japan                         2.641   2.273    9.459   8.8    8.0
  China                         0.616   0.439   1.514    1.4    1.3
  Hong Kong                     0.482   0.407   1.568    1.5    1.3
  Taiwan                        0.763   0.591   1.971    1.6    1.6
  South Korea                   0.631   0.613   2.245    2.0    2.0
  Southeast Asia                0.781   0.593   2.282    2.1    2.0
    Indonesia                   0.216   0.141   0.529    0.5    0.4
    Philippines                 0.196   0.166   0.744    0.6    0.6
    Malaysia                    0.125   0.096   0.310    0.3    0.3
    Thailand                    0.162   0.126   0.449    0.4    0.4
  South Asia                    0.219   0.215   0.623    0.6    0.6
Western Hemisphere              4.986   5.021  18.370   17.5   18.1
  Canada                        1.781   1.775  7.022     6.7    6.7
  Mexico                        1.519   1.726  5.956     5.6    6.7
  Brazil                        0.287   0.210  0.566     0.5    0.4
  Venezuela                     0.143   0.139  0.516     0.5    0.5
  Other Latin America           1.255   1.171  4.310     4.2    3.8
Western Europe                  3.129   2.458  8.844     8.5    7.5
  European Union                3.010   2.369  8.508     8.3    7.3
Central and Eastern Europe      0.112   0.064  0.320     0.3    0.3
New Independent States 1/       0.419   0.117  1.456     1.5    1.4
  Russia                        0.328   0.060  1.103     1.2    1.1
Middle East                     0.671   0.591  2.285     2.1    2.1
   Turkey                       0.146   0.152  0.658     0.6    0.6
  Saudi Arabia                  0.185   0.154  0.535     0.5    0.5
Africa                          0.632   0.555  2.167     2.1    1.9
  North Africa                  0.476   0.365  1.475     1.5    1.3
    Egypt                       0.288   0.252  0.939     0.9    0.9
  Sub-Saharan Africa            0.156   0.190  0.692     0.6    0.6
Oceania                         0.147   0.144  0.545     0.5    0.5
     Total 2/                  16.231  14.333 53.629    50.5   49.0
-----------------------------------------------------------------------
1/ New Independent States (NIS) are the former Soviet Union (FSU), 
including the Baltic Republics.  2/ Transshipments through Canada are 
included in the total only for fiscal 1998 and 1999; but are 
distributed by country in fiscal 1997.

Factors reducing U.S. exports to China and Hong Kong in 1999 include 
surplus feed grain and meal stocks and prospects for increased taxes on 
imports.  These factors are shifting Chinas agricultural imports from 
grains and meals to high-oil-content rapeseed from countries other than 
the United States.  Reduced export earnings because of increased Asian 
competition also contribute to lower import demand.  Exports to China 
and Hong Kong are decreased to $1.3 billion each, down from the 
November forecasts of $1.4 billion and $1.5 billion, respectively, and 
below last year.

Stronger wheat production estimates for North Africa lead to lower 
expected U.S. grain exports to this region in fiscal 1999.  Exports to 
the region are reduced to $1.3 billion, off 13 percent from Novembers 
forecast and down 12 percent year-to-year.

Exports to Latin American countries other than Mexico also are reduced 
in this forecast from November, reflecting the expected economic 
contraction in South America resulting from Brazils recession. 
Projected exports to Brazil are lowered to $400 million, 29-percent 
less than 1998.  Exports to other Latin American countries (excluding 
Mexico, Brazil, and Venezuela) drop to $3.8 billion, 12-percent below 
1998.

Stagnant economic conditions and the slow pace of recovery are 
constraining expected U.S. agricultural exports to Indonesia in 1999.  
Exports to Indonesia are projected at $400 million, $100 million less 
than in 1998 and below the November estimate.

Expected exports to the Russian Federation are forecast at $1.1 
billion, the same as last year, largely reflecting lower prices for 
U.S. donations and concessional sales.


U.S. Agricultural Export Programs

Export Subsidy Programs
Dairy Export Incentive Program (DEIP) sales are beginning to pick up in 
fiscal 1999.  As of February 12, 1,700 tons of cheese, 2,156 tons of 
whole milk powder, and 50,245 tons of nonfat dry milk were sold to 
countries in Africa, Asia, the Caribbean, Central America, and the 
Middle East in fiscal 1999.  DEIP bonuses totaled $52 million for the 
same period.  There continue to be no sales under the Export 
Enhancement Program in fiscal 1999.

CCC 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 $4.2 billion as of January 8, 1999, were 7 percent higher than year-
ago allocations, but sale approvals of $765 million were 15 percent 
lower than fiscal 1998 approvals.  Since November 1998, GSM-102 credit 
guarantees of $10 million and $60 million were announced for importers 
of agricultural products in Lebanon and Pakistan, respectively, and an 
additional GSM-102 allocation of $10 million was announced for Tunisia 
to assist vegetable oil sales.  

Food Aid Programs
The United States Department of Agriculture (USDA)announced the 
allocations for Title I for fiscal year 1999.  The total program 
funding level is valued at $216 million, nearly 8 percent below the 
1998 level.  Thirteen countries will be eligible to receive funding 
under Title I, while five countries will be eligible under Food for 
Progress funds.  This program is expected to provide nearly 1 million 
tons of commodity assistance.  

In July 1998, the President announced a Food Aid Initiative under which 
the government would purchase more than 5 million tons of wheat and 
wheat products from the domestic market.  The wheat will be purchased 
by the Commodity Credit Corporation and donated under the authority of 
Section 416(b) to those countries determined to have food needs.  As of 
late January, 4.8 million tons of wheat had been allocated, roughly 70 
percent of which will be made available to 19 countries in government-
to-government donations.  One million tons will go to the United 
Nations World Food Program, while the remainder has been made 
available to private voluntary organizations for projects in the New 
Independent States, Bosnia, Central America, the Caribbean, Indonesia, 
and Kenya.

Roughly 1.5 million tons of wheat and wheat products from this 
Initiative are being provided to Russia as part of a larger food 
assistance package.  Commodity allocations for Russia under Title I 
long-term credit and Title I-funded Food for Progress include beef, 
corn, lentils, nonfat dry milk, planting seeds, pork, poultry, rice, 
salmon, soybeans, soybean meal, vegetable oil, and wheat.  Allocations 
to Russia under Title I, Title I-funded Food for Progress, and Section 
416b total nearly 3.4 million tons.


Import Highlights

Fiscal 1999 imports continue to increase but at a slower pace than 
fiscal 1998.  Imports are projected to reach $38 billion, revised down 
by $500 million from the November 1998 projection.  Lower than 
anticipated prices of tropical commodities largely account for the 
downward revision.  Horticultural products remain strong compared with 
other imported commodities.

The dollar's appreciation against most world currencies in 1999, and 
especially against the Southeast Asian currencies, is lowering import 
prices from those countries in dollar terms.  Brazil's recent currency 
devaluation also will cause dollar prices of imports from that country 
to fall.  Weak domestic demand in countries that suffered financial 
crises and competition for foreign markets normally result in lower 
prices of exports from those countries, pushing U.S. imports up.

Imports of horticultural products for fiscal 1999 are forecast at $14.6 
billion, up $100 million from November and $750 million above 1998.  
Rising imports of fruits, preparations, and juices are causing this 
upward revision.  Imports of fruits, preparations, and juices are 
increased to $4.2 billion, compared with $4 billion in 1998 and $4.1 
billion in November.  Although projected vegetable imports remain 
unchanged from November at $4.5 billion, they are $250 million above 
1998.  And, wine and malt beverage imports for 1999 are expected to 
reach $3.8 billion, $300 million more than in 1998, even though slower 
growth in U.S. household income in 1999 should weaken spending on 
foreign beverages and the import pace of wine and malt beverages slowed 
during the past year.

The forecast for grains and feeds, at $3 billion, remains unchanged 
from the November projection, but also is up $100 million from 1998.  
Imported grains are expected to reach 5.1 million tons, the same as in 
1998. Oats are expected to make up the largest share of imported grains 
in 1999.  Feed imports also remain flat at 1.4 million tons.  


Table 5--U.S. agricultural imports: Value by commodity, 1997-1999
-----------------------------------------------------------------------
                                  Oct.-Dec.     Fiscal  Fiscal 1999
        Commodity               1997    1998    1998    Projected
                                                        Nov.   Feb.
-----------------------------------------------------------------------
                                        --Billion dollars--
Animals and products            1.720   1.863   6.814   6.8    6.8
  Live animals, excl. poultry   0.451   0.438   1.670   1.4    1.4
  Red meats and products        0.632   0.729   2.718   2.8    2.8
  Dairy products                0.350   0.447   1.368   1.4    1.4

Horticulture products           3.342   3.575  13.850  14.5   14.6
  Fruits, preps., and juices    0.887   0.932   4.008   4.1    4.2
    Bananas and plantains       0.285   0.273   1.214   1.3    1.3
  Vegetables and preps.         0.963   1.088   4.249   4.5    4.5
  Nuts and preps.               0.197   0.184   0.643   0.8    0.8
  Wine and malt beverages       0.939   1.025   3.502   3.8    3.8
  Nursery and cut flowers       0.264   0.262   1.082   1.1    1.1

Grains and feeds                0.828   0.787   2.919   3.0    3.0
  Grains                        0.250   0.190   0.811   0.8    0.8
  Feeds and products            0.578   0.597   2.108   2.2    2.2

Sugar and related products      0.351   0.358   1.675   1.8    1.8
Oilseeds and products           0.559   0.527   2.243   2.4    2.3
Tobacco, unmanufactured         0.228   0.177   0.822   0.9    0.8
Coffee, incl. Products          0.879   0.723   3.587   3.9    3.8
Cocoa and products              0.434   0.399   1.701   1.9    1.8
Rubber and allied gums          0.268   0.218   1.027   1.3    1.1
Other products                  0.548   0.597   2.370   2.1    2.0

Total agricultural imports      9.157   9.223   37.007 38.5   38.0
-----------------------------------------------------------------------

Oilseeds and tropical products, including coffee and cocoa, are revised 
downward from the November forecast.  Lower than anticipated import 
prices largely account for the decreased value of these commodities.  

Oilseed products are expected to reach $2.3 billion, down $100 million 
from November, but still $100 million more than a year ago.  Oilseeds 
and products imports are projected at 4.3 million tons, unchanged from 
the November forecast.  Imports of Canadian rapeseed will be partially 
supplanted by competing oilseeds.

The fiscal 1999 projections for coffee and cocoa also remain unchanged 
in quantity since November at 1.2 million and 1 million tons, 
respectively.  Value for each, however, is reduced by $100 million from 
November to $3.8 billion and $1.8 billion, respectively, reflecting the 
lower prices.

Tobacco import value also is reduced from November, as demand from 
manufacturers fell in the past year.  Imported tobacco is expected to 
reach $800 million in fiscal 1999, down $100 million from the November 
projection and about the same as in 1998.

Only imports of animals and products, at $6.8 billion, are expected to 
remain steady for fiscal 1999 compared with a year ago.  Frozen beef 
from Australia and New Zealand continues to be competitively priced.  
Imports of live animals are expected to reach $1.4 billion in fiscal 
1999, unchanged from November.  Red meats also remain the same as 
projected in November, $2.8 billion. 


Table 6--U.S. agricultural imports: Volume by commodity, 1997-99
-----------------------------------------------------------------------
                                  Oct.-Dec.     Fiscal  Fiscal 1999
        Commodity               1997    1998    1998    Projected
                                                        Nov.   Feb.
-----------------------------------------------------------------------
                                        --Million metric tons--
Red meats                       0.269   0.332   1.230   1.2    1.2
Cheese and casein               0.072   0.088   0.263   0.3    0.3
Fruits and preparations         1.003   0.980   7.345   7.8    7.8
  Bananas & plantains           1.002   1.002   4.175   4.1    4.1
Nuts and preparations           0.068   0.070   0.236   0.2    0.2
Wine and malt beverages         5.323   5.674  22.959  23.5   23.5
Fruit juices                    6.732   7.134  26.577  26.6   27.0
Grains and feeds                1.850   1.628   6.431   6.5    6.5
  Grains                        1.473   1.336   5.101   5.1    5.1
  Feeds and fodders             0.376   0.292   1.329   1.4    1.4
Cane and beet sugar             0.475   0.352   2.170   2.1    2.1
Oilseeds and products           1.102   0.986   4.314   4.3    4.3
Tobacco, unmanufactured         0.059   0.042   0.241   0.2    0.2
Coffee, incl. products          0.256   0.306   1.155   1.2    1.2
Cocoa and products              0.206   0.193   0.875   1.0    1.0
Rubber and allied gums          0.268   0.307   1.162   1.2    1.2
-----------------------------------------------------------------------


Table 7--U.S. agricultural imports: Value by region, 1997-99
-----------------------------------------------------------------------
                                  Oct.-Dec.     Fiscal  Fiscal 1999
        Region                  1997    1998    1998    Forecast
Nov.Feb.
-----------------------------------------------------------------------
                                        --Billion dollars--
Western Hemisphere              5.902   5.692  19.978  20.9    20.9
  Canada                        2.004   2.004   7.798   8.1     8.1
  Mexico                        0.966   0.988   4.669   4.9     4.8
  Brazil                        0.313   0.331   1.207   1.3     1.4
  Colombia                      0.373   0.312   1.360   1.4     1.3
  Chile                         0.142   0.174   0.756   0.8     0.8
  Central America               0.474   0.365   2.180   2.3     2.3
    Costa Rica                  0.165   0.186   0.752   0.8     0.8
  Other Latin America           0.476   0.482   2.006   2.1     2.1
Western Europe                  2.101   2.225   7.477   7.7     7.7
  European Union                2.051   2.180   7.295   7.6     7.6
Central and Eastern Europe      0.059   0.071   0.225   0.2     0.2
New Independent States          0.014   0.023   0.052   0.1     0.1
Asia less Middle East           1.446   1.383   5.698   5.8     5.4
  China                         0.202   0.190   0.754   0.8     0.8
  Southeast Asia                0.886   0.848   3.484   3.6     3.4
    Thailand                    0.180   0.169   0.760   0.8     0.8
    Indonesia                   0.376   0.373   1.360   1.4     1.3
  South Asia                    0.172   0.174   0.804   0.8     0.7
    India                       0.153   0.157   0.727   0.8     0.7
Oceania                         0.408   0.506   2.063   2.2     2.2
  Australia                     0.239   0.273   1.103   1.2     1.2
  New Zealand                   0.157   0.206   0.909   1.0     1.0
Africa                          0.235   0.180   0.969   1.0     0.9
  Ivory Coast                   0.067   0.060   0.393   0.4     0.4
Middle East                     0.146   0.180   0.546   0.6     0.6
  Turkey                        0.116   0.137   0.408   0.4     0.4
Total                           9.157   9.223  37.007  38.5    38.0
-----------------------------------------------------------------------
1/ New Independent States (NIS) are the former Soviet Union, including 
the Baltic Republics.

END_OF_FILE