HDR1011800400101026951500
OUTLOOK FOR U.S. AGRICULTURAL EXPORTS                         October 26, 1995
             Approved by the World Agricultural Outlook Board
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OUTLOOK FOR U.S. AGRICULTURAL EXPORTS is published four time a year by the
Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-
4788.  AES-7.  Please note that this release contains only the text of OUTLOOK
FOR U.S. AGRICULTURAL EXPORTS--tables and graphics are not included.
 
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Commodity Highlights
 
The August forecast for fiscal 1995 exports of U.S. wheat and
flour is lowered 1.9 million tons and $100 million from the May
forecast to 32.2 million tons valued at $5 billion.  Tighter
world wheat supplies have led to higher wheat prices.  As a
result, export sales of U.S. wheat have slowed in recent months
as buyers are delaying purchases, hoping for lower prices with
harvests of the competing exporters.  In fiscal 1996, wheat and
flour exports are projected to fall 700,000 tons to 31.5 million
tons.  U.S. wheat exports are projected lower due to tight U.S.
supplies and larger production in Australia and the European
Union (EU).  However, steady foreign demand is projected to
sharply raise wheat and flour prices above fiscal 1995, boosting
U.S. export value $400 million to $5.4 billion.
 
The forecast for fiscal 1995 coarse grain shipments is increased
3.4 million tons and $600 million from the May forecast to 61.8
million tons valued at $7 billion.  U.S. corn exports are now
forecast at 55 million tons valued at $6.2 billion, compared with
51.5 million tons and $5.6 billion in May.  U.S. export prices
have edged upward since May due to concern over a short 1995/96
U.S. corn crop.  China's withdrawal from corn export markets this
year and its emergence as a large net importer of corn have been
nothing short of spectacular.  China is now expected to export
only 1.5 million tons and import up to 4.3 million tons.  With
China's absence from export markets, demand for U.S. corn in
Japan, South Korea, and other Asian markets has increased
markedly.
 
In fiscal 1996, coarse grain exports are projected to drop 5.3
million tons to 56.5 million tons, but higher prices are expected
to boost value $100 million to $7.1 billion.  The prospect of a
reduced 1995 domestic corn harvest is projected to cut corn
exports 4 million tons to 51 million tons.  China's continued
near absence from export markets and strong foreign demand are
expected to support foreign demand for U.S. corn.  As a result,
despite lower anticipated export volume, U.S. corn export value
is projected to rise $200 million to $6.4 billion.  U.S. export
volumes and values for sorghum and barley are projected lower.
 
The 1995 forecast for U.S. rice exports is raised 600,000 tons
and $100 million from the May forecast to 3.6 million tons valued
at $1 billion.  Stronger than previously anticipated import
demand from China and Indonesia is being met by Thailand and
Vietnam.  U.S. rough rice exports to Brazil and other Latin
American countries are higher than earlier anticipated, and
Turkey and Iran are importing large amounts of U.S. milled rice. 
In the coming year, U.S. exports are projected to fall 200,000
tons, but export value is expected to remain unchanged due to
stronger world prices as China and Indonesia continue to import
rice.
 
The August forecast for fiscal 1995 U.S. exports of oilseeds and
products is raised 1.3 million tons and $500 million from the May
estimate to 32.4 million tons valued at $8.7 billion.  U.S.
exports of soybeans, meal, and oil are revised upward by 1.1
million tons and $300 million to 29.4 million tons valued at $6.8
billion.  Stronger than previously anticipated economic growth in
major overseas markets has supported greater U.S. sales, and
buyer activity has recently strengthened in anticipation of a
future rise in prices.
 
The fiscal 1996 forecast for U.S. exports of oilseeds and
products is lowered 1.2 million tons to 31.2 million.  This
reflects a drop in U.S. oilseed production and stocks for
1995/96.  U.S. soybean exports are projected to fall 700,000 tons
to 21.8 million, while exports of soybean meal and oil are
projected to fall 400,000 tons and 200,000 tons to 5.3 million
tons and 1 million tons, respectively.  On the other hand, higher
soybean and meal prices are projected to more than offset lower
vegetable oil prices, boosting the overall export value of U.S.
oilseeds and products $200 million to $8.9 billion.  This is
based on a projected decline in U.S. and global soybean stocks
and lower stocks/use ratios.
 
The fiscal 1995 forecast for U.S. cotton exports is lowered
200,000 tons and $300 million from the May forecast to 2.1
million tons valued at $3.7 billion.  This downward revision
reflects the recent larger-than-expected slowdown in foreign
purchases due to extremely high world cotton prices.  In fiscal
1996, U.S. cotton exports are projected to fall 400,000 tons and
$800 million to 1.7 million tons valued at $2.9 billion.  These
estimates are based on an expected recovery in world production. 
However, growth in world consumption should keep U.S. exports
above the 1994 sales level.  The U.S. share of world trade in
marketing year 1995/96 is projected to fall to 28 percent, down
sharply from 33 percent in 1994/95.
 
The fiscal 1995 forecast for U.S. unmanufactured tobacco exports
is lowered $100 million from the May forecast to $1.3 billion. 
World tobacco leaf markets generally remain oversupplied.  Japan,
the EU, and Turkey remain the leading overseas markets for U.S.
leaf.  In fiscal 1996, export volume and value are projected to
remain unchanged.
 
The fiscal 1995 forecast for U.S. exports of livestock, poultry,
and dairy products is revised upward $500 million from the
previous forecast in May to a record $10.3 billion.  The
forecasts for livestock and poultry products are raised $400
million and $100 million to $7.3 billion and $2.2 billion,
respectively.  The forecast for dairy products remains unchanged
at $800 million.  The upward revision in livestock product
exports is largely due to continued strong demand for U.S.
chilled and frozen red meats in Japan, South Korea, and Russia; 
animal fats in Mexico, the EU, Turkey, and South Korea;  and,
hides and skins in several Asian Pacific Rim countries.  Poultry
product exports are revised upward largely due to the continued
strong demand for U.S. poultry meat in Russia and Hong Kong.
 
In fiscal 1996, U.S. exports of livestock, poultry, and dairy
products are projected to rise $600 million to a record high of
$10.9 billion.  Poultry meat shipments are expected to account
for one-thirds of this gain, largely because exports are
projected to rise 200,000 tons to a record 2 million tons.  Hides
and skins exports are also projected to rise $100 million with
increased shipments to Asian Pacific Rim countries and Italy. 
Expectations for the red meat sector remain optimistic in fiscal
1996, although the growth rate of exports is expected to slow
compared with recent years.  Red meat exports are projected to
rise 2-3 percent in both volume and value.  Japan and South Korea
remain the major markets for beef exports, and Russia holds
considerable promise for processed pork and offals.
 
The fiscal 1995 forecast for exports of U.S. horticultural
products remains unchanged from May's record forecast of $9.4
billion.  Exports are projected to reach a record high of $10.3
billion in fiscal 1996.  Exports of fresh and processed fruits
and vegetables are projected to increase $300 million each to
$3.7 billion and $2.9 billion, respectively.  Strong demand in
Asia for apples, frozen potatoes, and fresh vegetables is
expected to spur U.S. exports in 1996.  Tree nut exports are
projected to rise $100 million to $1.2 billion.  A reduced 1995
almond crop will boost tree nut export value but hold down export
volume in fiscal 1996.  Continued market liberalization, rising
incomes, a growing demand for healthful foods, and on-going
market promotion activities in major foreign markets like Japan
and other Asian countries continue to drive up U.S. exports.
 
Economic Outlook
 
Prospects for world real gross domestic product (GDP) growth in
1995 are unchanged at 3 percent.  In 1996, world GDP growth is
projected to be slightly lower at 2.9 percent because of lower
anticipated growth in the United States.  Japan is expected to
grow 2 percent, and Canada and the EU are projected to slow to
2.9 percent and 2.8 percent, respectively.  Growth in the Pacific
Rim is expected at 6.3 percent, and Latin American growth is
expected increase to 3.6 percent as Mexico returns to positive
GDP growth of about 2.5 percent in 1996.  Growth is expected to
accelerate in Eastern Europe to over 4 percent, and the former
Soviet Union (FSU) is expected to grow slightly more than 1
percent.
 
Regional Highlights
 
U.S. agricultural exports in fiscal 1995 are forecast higher to
most regions since May.  The United States is expected to ship
record exports to every region except the EU, Central and Eastern
Europe, and the FSU, although exports to the EU are now forecast
higher than earlier expected.
 
U.S. exports to the EU are forecast at $8.1 billion, nearly $1.3
billion higher than in fiscal 1994.  Increased sales of corn,
soybeans, tobacco, animal feed, and seed are boosting exports. 
Higher valued fresh and processed fruit and vegetable exports are
boosting consumer food exports.  Tree nuts, which account for
nearly a quarter of consumer food export value to the EU, are
expected lower because of the reduced unit value of almonds in
1995.
 
Exports to Asia are forecast at a record $23.5 billion, boosted
by further gains to China, Japan, Korea, and Taiwan.  The
forecast for Hong Kong remains unchanged at a record $1.5
billion.  U.S. exports to China will reach a record $2.5 billion
due to strong demand for cotton at record high prices, and record
soybean oil exports.  The forecast is revised upward $200 million
since May 1995 because of further expected gains in corn and
record sales of poultry meat, animal fats, and cattle hides.
 
U.S. exports to South Korea are revised upward $400 million to
$3.5 billion; exports to Japan are raised $200 million to $9.9
billion; and exports to Taiwan are increased $100 million to $2.4
billion.  Higher corn and cotton export prices since May add to
the value of U.S. sales, and corn export volume is expected
higher to South Korea and Taiwan.  Red meat, poultry meat, and
fruit and vegetable exports remain strong to both Japan and South
Korea.  Surging cattle hide and oilseed product exports to South
Korea further boost exports.
 
Exports to Latin America are revised upward $200 million to $7.8
billion, although expected exports to Mexico are reduced by $100
million to $3.5 billion.  Increased sales to South America are
the major reason for the upward revision in U.S. exports to Latin
America.  Sales of agricultural products are $1.7 billion for the
first three quarters of fiscal 1995, nearly 60 percent ahead of
last year.  Most of the growth is in the bulk commodity and
consumer foods categories.  The United States is likely to ship
record exports to Central America and the Caribbean countries in
1995 because of increased bulk and intermediate product exports.
 
U.S. exports to Mexico are forecast at $3.5 billion compared with
$4.1 billion in fiscal 1994.  The forecast is $100 million lower
than in May because exports are expected to fall sharply in the
last quarter (July-September) of fiscal 1995.  Exports through
the first 9 months of fiscal 1995 totaled $2.7 billion, 7 percent
lower than a year earlier.  But since the peso devaluation in
December, exports during January-June 1995 were 27 percent lower
than a year ago, and are expected to decline more in the last
quarter as savings are depleted and consumer demand further
weakens.  The sharpest export declines to date have been in
consumer food products such as red meats (down 18 percent), and
fruits and vegetables (down 20 percent) as incomes have fallen in
Mexico.  Compared with fiscal 1994, increased exports of basic
food items such as wheat, corn, rice, and vegetable oils offset
some of the decline in consumer food exports.  Soybean exports
are sharply lower because of reduced feed demand.
 
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 foreign food assistance.  The assistance is
provided through three separate authorities.  Title I of the P.L.
480 provides for government-to-government sales of U.S.
agricultural commodities to developing countries through long-term 
concessional sales.  This program is administered by the
Foreign Agricultural Service of USDA.  Title II provides for
donations of U.S. agricultural commodities to meet humanitarian
food needs in least developed countries.  Title III provides for
government-to-government grants to support long-term economic
development in the least developed countries.  Titles II and III
are administered by the Agency for International Development
(AID).
 
The estimate for P.L. 480 appropriations (program level) in
fiscal 1995 is as follows:  Title I, $320.3 million; Title II,
$821.1 million; and Title III, $157.4 million.  These levels
reflect the enacted levels contained in the Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 1995.  The enacted level for Title III has
subsequently been reduced by $40 million, bringing the current
program level to $117.4 million.  These program levels will
provide approximately 3.9 million metric tons of commodity
assistance in fiscal 1995.
 
CCC Export Credit Guarantee Programs
 
As of August 18, 1995, announced allocations for GSM-102 and GSM-103
credit guarantee programs totaled $4,081.1 million, and
applications received by the CCC amounted to $2,398 million,
approximately 13 percent below the same time last year.  Mexico
continues to be the major purchaser under the credit guarantee
programs with purchases of $1,290 million, with the majority
going towards feed grains and oilseeds.  South Korea was the
second leading purchaser with sales of $270.3 million,  with the
majority going towards cotton purchases.
 
The Export Enhancement Program and the Dairy Export Incentive
Program
 
Export Enhancement Program (EEP) sales during the latter part of
fiscal 1995 have been slow.  As of August 18, 1995, fiscal year
EEP bonuses have totaled $339 million, only $39 million higher
than in October 1994-May 1995.  Most of the gain was in eggs,
frozen poultry, and wheat.  Wheat export sales totaled 13.9
million tons as of August 18, 1995.  China was the largest
recipient of wheat thus far, with sales of over 3.7 million tons,
followed by Egypt with sales of 3.4 million tons.
 
Dairy Export Incentive Program (DEIP) bonuses were $64 million
through August 18, a $5-million increase since May.  So far in
fiscal 1995, 235,000 tons of dairy products have been sold under
DEIP, compared with 134,000 tons sold in all of fiscal 1994.  In
fiscal 1995, Algeria has been the largest recipient with
purchases of 97,550 tons of dairy products through August 1995.
 
Import Commodities
 
The fiscal 1995 agricultural forecast is $29 billion, $500
million below the May forecast.  Sustained lower import unit
values for coffee and lower volume result in a $500-million
decrease in coffee imports to $3.5 billion.  Beef prices were
also lower than expected, resulting in a $600-million decline to
$1.5 billion.  As a result, the forecast value of agricultural
imports from Latin America and Oceania, primarily Australia, has
fallen.
 
Noncompetitive imports are forecast at $8.7 billion for fiscal
1995, compared with $8.9 billion in the May forecast.  The
decline stems from a $500-million decrease in coffee imports
offsetting a $300-million increase in expected imports of rubber. 
A leveling of coffee import unit values at about $3,600 per ton
has held since the second quarter of fiscal 1995 and resulted in
the lower forecast.  Coffee volume, after ranging from 70,000 to
100,000 tons monthly during October 1994-March 1995, reached a
plateau at about 75,000 tons, prompting a lowering of the import
volume forecast from 1.1 to 1 million tons.
 
Third-quarter rubber import value averaged $162 million each
month, 42 percent higher than during the first two quarters,
leading to a revised forecast of $1.6 billion.  The forecast for
fiscal 1995 rubber import volume is unchanged at 1 million tons. 
Although production in Indonesia has risen and China is buying
less rubber, strong U.S. demand has continued upward due to
economic growth.  The increase in rubber imports boosts the total
import forecast for Asia by $400 million to $4.9 billion.
 
The competitive import forecast was lowered $300 million from the
May forecast to $20.3 billion.  A $400-million decrease in the
animal products forecast was the result of lower than previously
expected beef and pork values which offset a $200-million
increase in the live animal forecast.  The new beef import
forecast is $1.5 billion, as seasonal increases in beef imports
did not materialize during the third quarter.  Lower U.S. beef
prices set the stage for a decline in import volume.  Meat
imports from Australia have yet to recover from the effects of
the drought and increased shipments to Southeast Asia.  Canadian
shipments fell due to plant renovations that resulted in
shipments of cattle instead of beef.  Also, tight domestic beef
supplies and strong consumer demand in Brazil have curtailed
exports to the United States.
 
Imports from Latin America are down $700 million to $10.5 billion
for the August forecast, due to the declines in coffee and beef
import prices.  Forecast imports from Australia are $200 million
lower at $1.7 billion because of lower beef value.
 
The initial projection for fiscal 1996 import value is $29
billion.  Competitive imports are projected up $300 million to
$20.6 billion and noncompetitive imports down $300 million to
$8.5 billion.  Coffee and beef import value is expected to
decline and will be offset by advances in horticultural crops.
 
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