OUTLOOK FOR U.S. AGRICULTURAL EXPORTS                           June 12, 1996
             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
20005-4788.  AES-10. 
 
Subscriptions to the printed version of this report are available from the
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Contents
 
Summary
Fiscal 1996 Agricultural Export Forecast Remains at $60 Billion. . . . . .  
Commodity Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Economic Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
Regional Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . .  
U.S. Agricultural Export Programs. . . . . . . . . . . . . . . . . . . . .   
Import Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
 
Tables
 
Table 1--U.S. agricultural trade, fiscal years 1991-96
Table 2--U.S. agricultural exports:  Value by commodity, 1994-96
Table 3--U.S. agricultural exports:  Volume by commodity, 1994-96
Table 4--U.S. agricultural exports:  Value by region, 1994-96
Table 5--U.S. agricultural imports:  Value by commodity, 1994-96
Table 6--U.S. agricultural imports:  Volume by commodity, 1994-96
Table 7--U.S. agricultural imports:  Value by region, 1994-96
___________________________________________________________________________
 
Coordinator (ERS):
 
Joel Greene (202) 219-0816
Commercial Agriculture Division
Economic Research Service (ERS)
 
Coordinators (FAS):
 
Michael Dwyer (202) 720-3124
Ernest Carter (202) 720-2922
Trade and Economic Analysis Division
Foreign Agricultural Service (FAS)
 
                          U.S. Department of Agriculture
                              Washington, D.C. 20250
 
The forecasts in the Outlook for U.S. Agricultural Exports are based on
information provided by the following analysts in the Commercial Agriculture
Division of the Economic Research Service and in the Commodity Divisions of the
Foreign Agricultural Service.  All telephone numbers are area code 202.
 
ERS:  Karen Ackerman (Export Programs, 501-8511); Jaime Castaneda (Oilseeds,
219-0826); Ronald Gustafson (Beef, 219-0848); Mildred Haley (Pork, 219-0833);
David Harvey (Poultry, 219-0839); John Love (Horticultural Products, 219-1268);
Stephen MacDonald (Cotton, 219-1179); Stacey Rosen (Food Aid, 501-8445); Mark
Simone (Wheat, 219-0487); Carolyn Whitton (Coarse Grains and Rice, 219-0825).
 
FAS:  Peter Burr (Tobacco, Cotton, and Seeds, 720-9497); Alan Holz (Oilseeds,
720-0143); Dee Linse (Export Programs, 720-9847); Nancy Morrison (Dairy,
Livestock, and Poultry, 720-8252); Debra Pumphrey (Horticultural and Tropical
Products, 720-8899); Alan Riffkin (Grains and Feeds, 690-4198); Joe Somers
(Horticultural and Tropical Products, 720-2974).
 
Regional information can be provided by the following analysts in the
Commercial Agriculture Division, ERS:  Chris Bolling (Brazil, 219-0668); Nancy
Cochrane (Central and Eastern Europe, 219-0650); Hunter Colby (China,
219-0669); Frederick Crook (Hong Kong, 219-0002); John Dyck (Japan, 219-0698);
Ruth Elleson (South Korea, 219-0681); Anwarul Hoque (South Asia, 219-0665);
Sophia Wu Huang (Taiwan, 219-0679); Elizabeth Jones (European Union, 219-0619);
Daniel Plunkett (Mexico, 219-0670); Sharon Sheffield (Former Soviet Union,
219-0019); Jim Stout (Canada, 219-0678); Tina Valdecanas (Southeast Asia,
501-6133).
 
               ________________________________________________
 
                                   Summary
 
FISCAL 1996 AGRICULTURAL EXPORT FORECAST REMAINS AT $60 BILLION
 
The fiscal 1996 forecast for U.S. agricultural exports is unchanged from
February's $60 billion.  The value of wheat, corn, cotton, and poultry exports
is revised upward, but reductions for oilseeds, animal hides, and horticultural
products are offsetting.  Wheat prices have been higher than expected because
of poor growing conditions for the 1996 U.S. crop.  Strong import demand has
not only raised corn export volume, but raised expected prices.  The value of
soybean and product exports is projected lower as soybean prices decline
because of increased foreign exports and weaker demand for U.S. soybean
products.  Total export volume is lowered slightly to 160.4 million tons.
 
Major country changes include a $600 million increase to Mexico, reflecting
improved bulk commodity sales.  Exports to China and South Korea are reduced to
reflect lower than anticipated shipments to date.
 
The fiscal 1996 forecast for U.S. agricultural imports is raised $1 billion to
$30.5 billion.  Higher cocoa, sugar, and horticultural imports account for the
increase.  As a result, the U.S. agricultural trade surplus forecast is reduced
$1 billion to $29.5 billion in fiscal 1996.  The forecast still surpasses the
previous record of $26.6 billion set in fiscal 1981.
 
Table 1--U.S. agricultural trade, fiscal years, 1991-1996
___________________________________________________________________________
                         -- Year ending September 30 --                     
 
         : Fiscal : Fiscal : Fiscal : Fiscal : Fiscal :   Forecast 
Item     :  1991  :  1992  :  1993  :  1994  :  1995  : Fiscal  1996
         :        :        :        :        :        : Feb. :  May    
___________________________________________________________________________
         :
         :                      -- Billion dollars --
         :
Exports  :         37.5   42.3    42.5    43.5   54.1    60.0    60.0
         :
Imports  :         22.6   24.3    24.5    26.4   29.5    29.5    30.5
         :
___________________________________________________________________________
         :                                                            
 
Trade    :
 balance :         14.9   18.0    18.0    17.1   24.6    30.5    29.5
         :
___________________________________________________________________________
         :                                                               
         :                     -- Million metric tons --
 
Export   :
 volume  :        129.4  143.6   146.4   126.8  169.2   161.6   160.4
         :
__________________________________________________________________________
 This outlook reflects commodity forecasts in the May 10, 1996, World
Agricultural Supply and Demand Estimates.
 
Table 2--U.S. agricultural exports:  Value by commodity, 1994-96
___________________________________________________________________________
                             :
                             :  October-March   : Fiscal  : Fiscal 1996
      Commodity              :1994/95  : 1995/96:  1995   :  Forecast
                             :          :       :         :  Feb. :  May
___________________________________________________________________________
                             :
                             :              --Billion dollars--
                             :
Grains and feeds 1/          :     8.524   11.030   17.637    21.0     22.0
  Wheat & flour              :     2.541    3.446    5.201     6.7      6.9
Rice                         :      .574     .541    1.050     1.0      1.
Coarse grains 2/             :     3.371    4.909    7.411     8.7      9.5
    Corn                     :     2.974    4.361    6.619     7.8      8.6
Feeds and fodders            :     1.279    1.365    2.511     3.0      2.9
Oilseeds and products        :     5.441    5.837    9.119    10.0      9.4
  Soybeans                   :     3.261    3.965    5.274     6.3      6.1
  Soybean meal               :      .601     .668    1.079     1.3      1.1
  Soybean oil                :      .574     .199     .809      .5       .4
Livestock products           :     3.816    4.084    7.808     8.8      8.6
  Beef, pork & variety meats :     1.844    2.176    4.044     4.7      4.7
  Hides & skins, incl. furs  :      .853     .787    1.719     1.9      1.6
Poultry & products           :     1.090    1.356    2.210     2.4      2.7
Dairy products               :      .365     .360     .812      .9       .8
Tobacco, unmanufactured      :      .789     .855    1.329     1.4      1.5
Cotton & linters             :     2.219    2.313    3.496     2.7      3.0
Seeds                        :      .455     .460     .680      .7       .7
Horticultural products       :     4.679    4.643    9.110    10.0      9.4
  Fruits & preparations      :     1.550    1.590    3.263     3.5      3.4
  Vegetables & preparations  :     1.295    1.185    2.538     2.6      2.5
  Tree nuts & preparations   :      .666     .738    1.108     1.2      1.2
Sugar, tropical, and other   :      .989     .951    1.940     2.1      1.9
                             :                                     
   Total 3/                  :    28.367   31.889   54.141    60.0     60.0
                             :                                            
Table 3--U.S. agricultural exports:  Volume by commodity, 1994-96      
___________________________________________________________________________
                             :    October-March   :Fiscal :  Fiscal 1996
     Commodity               : 1994/95  : 1995/96 : 1995  :    Forecast
                             :           :        :       :  Feb  .:   May
___________________________________________________________________________
                             :            --Million metric tons--
                             :
Wheat                        :    16.412   16.814   32.094    33.5     32.0
Wheat flour                  :      .585     .218    1.184     1.0       .5
Rice                         :     2.129    1.524    3.767     3.2      3.0
Coarse grains 2/             :    32.147   33.663   65.670    58.7     61.4
   Corn                      :    28.388   30.069   58.645    53.0     55.5
Feeds & fodders              :     6.895    6.661   13.483    13.8     13.5
Oilseeds and products        :    20.809   19.342   34.050    30.9     30.1
  Soybeans                   :    14.871   14.563   23.584    22.0     22.0
  Soybean meal               :     3.382    2.952    6.094     5.3      4.9
  Soybean oil                :      .868     .329    1.216      .8       .7
Beef, pork & variety meats   :      .583     .685    1.262     1.5      1.5
Poultry meat                 :      .925    1.168    1.901     2.2      2.3
Animal fats                  :      .861     .789    1.725     2.1      1.7
Cotton & linters             :     1.363    1.286    2.068     1.7      1.7
Horticultural products 4/    :     3.643    3.569    7.001     7.5      7.2
Other                        :     2.754    2.943    4.999     5.5      5.5
   Total agriculture         :    89.106   88.662  169.204   161.6    160.4
   Major bulk products 5/    :    66.922   67.850  127.183   119.1    120.1
                             :                                            
___________________________________________________________________________
 1/ Includes pulses and corn products.  2/ Includes corn, barley, sorghum,
oats, and rye.  3/ Totals might not add due to rounding.  4/ Products measured
in liters not included.  5/ Includes wheat, rice, coarse grains, soybeans, and
cotton.
 
Table 4--U.S. agricultural exports: Value by region, 1994-96 1/      
___________________________________________________________________________
                             :    October-March   : Fiscal : Fiscal 1996
        Region               :  1994/95 : 1995/96 :  1995  :   Forecast
                             :         :          :        :  Feb. :  May  
___________________________________________________________________________
                             :
                             :              --Billion dollars--
                             :  
  Western Europe             :      5.199   5.823     8.781    9.4    9.4
    European Union 2/        :      5.006   5.621     8.416    9.0    9.0
    Other Western Europe     :       .193    .202      .365     .4     .4
                             :  
  Central and Eastern Europe :       .201    .215      .306     .3     .3
                             :  
  Former Soviet Union        :       .576    .913     1.158    1.5    1.6
    Russia                   :       .460    .646      .911    1.3    1.3
                             :  
  Asia                       :     11.988  13.848    23.980   27.7   27.6
    Japan                    :      5.028   5.988    10.450   11.7   12.0
    China                    :      1.278   1.204     2.412    2.9    2.5
    Other East Asia          :      3.740   4.155     7.560    9.0    8.3
      Taiwan                 :      1.273   1.437     2.552    2.8    2.8
      South Korea            :      1.729   1.958     3.575    4.6    4.0
      Hong Kong              :       .734    .759     1.425    1.6    1.5
    Southeast Asia           :      1.370   2.038     2.582    3.0    3.8
      Philippines            :       .319    .450      .675     .8     .9
    South Asia               :       .572    .463      .976    1.1    1.0
      Pakistan               :       .286    .290      .341     .5     .4
                             :   
  Middle East                :      1.324   1.463     2.426    2.7    2.7
      Israel                 :       .239    .330      .462     .5     .6
      Saudi Arabia           :       .263    .330      .486     .5     .6
                             :  
  Africa                     :      1.571   1.745     2.988    3.2    3.2
    North Africa             :      1.161   1.251     2.111    2.2    2.3
      Egypt                  :       .740    .822     1.378    1.4    1.4
      Algeria                :       .255    .194      .461     .5     .4
    Sub-Saharan Africa       :       .410    .494      .877    1.0    1.0
                             :  
  Latin America              :      4.280   4.799     8.103    8.5    8.9
    Mexico                   :      1.961   2.326     3.699    3.8    4.4
    Other Latin America      :      2.319   2.311     4.404    4.7    4.5
      Brazil                 :       .466    .271      .638     .6     .4
      Venezuela              :       .238    .216      .496     .5     .4
                             :  
  Canada                     :      2.896   2.861     5.836    6.1    5.9
                             :  
  Oceania                    :       .332    .223      .562     .6     .4
                             :  
       Total                 :     28.367  31.889    54.141   60.0   60.0
                             :  
  Developed countries        :     13.695  15.224    26.092   28.3   28.3
  Developing countries       :     12.617  14.333    24.173   27.0   27.3
  Other countries            :      2.055   2.332     3.876    4.7    4.4
                             :                                                
 1/  Country totals are adjusted for transshipments through Canada.
2/  Austria, Finland, and Sweden are included in the European Union.
 
Table 5--U.S. agricultural imports:  Value by commodity, 1994-96          
___________________________________________________________________________
                             :  October-March    : Fiscal  : Fiscal 1996
      Commodity              :1994/95  : 1995/96 :  1995   :   Forecast
                             :         :         :          :Feb.   :May   
___________________________________________________________________________
                             :
                             :                 --Billion dollars--
                             :
Animals and products         :    2.957    2.890    5.926      5.4      5.4
  Live animals               :     .825     .794    1.655      1.4      1.4
  Red meats                  :    1.198    1.090    2.332      2.1      2.1
  Dairy products             :     .493     .554    1.046      1.0      1.0
                             :                                  
Horticultural products       :    5.066    5.476    9.906     10.1     10.5
  Fruits, incl. juices       :    1.658    1.783    3.366      3.5      3.7
    Bananas and plantains    :     .543     .558    1.130      1.1      1.2
  Vegetables and preps.      :    1.708    1.738    3.030      3.0      3.0
  Nuts and preps.            :     .259     .250     .496       .5       .5
  Wine and malt beverages    :    1.051    1.217    2.207      2.3      2.4
  Nursery and cut flowers    :     .390     .488     .807       .8       .9
                             :
Grains and feeds             :    1.127    1.242    2.291      2.4      2.4
  Grains                     :     .322     .331     .654       .8       .7
  Feeds and grain products   :     .805     .911    1.637      1.6      1.7
                             :
Sugar and related products   :     .561     .662    1.221      1.3      1.6
Oilseeds and products        :     .747    1.025    1.760      2.0      2.0
Tobacco, unmanufactured      :     .265     .345     .572       .7       .7
Coffee, incl. products       :    1.850    1.547    3.363      3.0      2.9
Cocoa, incl. products        :     .566     .738    1.089      1.1      1.4
Rubber and allied gums       :     .679     .743    1.589      1.6      1.6
Other products               :     .927    1.026    1.813      1.9      2.0
                             : 
   Total                     :   14.856   15.694   29.530     29.5     30.5
                             :                                             
 
Table 6--U.S. agricultural imports:  Volume by commodity, 1994-96          
___________________________________________________________________________
                             :     October-March    :  Fiscal  : Fiscal 1996
      Commodity              :  1994/95  : 1995/96  :   1995   :  Forecast
                             :           :          :          : Feb : May
___________________________________________________________________________
                             :
                             :                --Million metric tons--
                             :
Red meats                    :     .528     .490    1.054      1.0      1.0
Cheese and casein            :     .120     .117     .244       .2       .2
Horticultural products       :    5.179    5.651    9.689     10.0     10.7
  Fruits and preps.          :    3.279    3.253    6.350      6.5      6.5
    Bananas and plantains    :    1.922    1.933    3.878      4.0      4.0
  Vegetables and preps.      :    1.800    2.299    3.150      3.3      4.0
  Nuts and preps.            :     .100     .099     .189       .2       .2
  Wine and malt beverages 1/ :    7.044    7.806   15.523     16.0     17.0
  Fruit juices 1/            :   13.591   10.430   24.192     23.0     21.0
Grains and feeds             :    3.796    3.234    7.415      6.7      6.6
  Grains                     :    2.496    1.906    5.750      4.1      4.0
  Feed and grain products    :    1.300    1.328    2.524      2.6      2.6
Sugar, cane or beet 2/       :     .718     .880    1.541      2.0      2.4
Oilseeds and products        :    1.638    1.753    3.107      3.3      3.2
Tobacco, unmanufactured      :     .111     .115     .216       .3       .2
Coffee, incl. products       :     .494     .598     .935      1.1      1.1
Cocoa, incl. products        :     .320     .453     .614       .7       .9
Rubber and allied gums       :     .514     .520    1.043      1.0      1.0
 
 1/ Million hectoliters.  Not included in horticultural totals.  2/ Imports for
consumption, product weight.
 
Table 7--U.S. agricultural imports:  Value by region, 1994-96  
___________________________________________________________________________
                             :   October-March   : Fiscal : Fiscal 1996  
        Region               : 1994/95 : 1995/96 :  1995  :   Forecast
                             :         :         :        :  Feb.   :  May 
___________________________________________________________________________
                             :
                             :                 --Billion dollars--
                             :
Western Europe               :    2.891    3.148    5.885      5.9      6.2
  European Union 1/          :    2.811    3.058    5.713      5.7      6.0
  Other Western Europe       :     .080     .090     .172       .2       .2
                             :
Central and Eastern Europe   :     .116     .136     .202       .2       .2
                             :
Former Soviet Union          :     .021     .023     .053     2/      2 /
                             :
Asia                         :    2.395    2.601    5.068      4.9      5.2
  Japan                      :     .154     .147     .305       .3       .3
  China                      :     .234     .250     .482       .5       .5
  Other East Asia            :     .143     .152     .305       .3       .3
  Southeast Asia             :    1.624    1.790    3.491      3.3      3.6
  South Asia                 :     .239     .261     .485       .5       .5
                             :
Middle East                  :     .164     .257     .318       .3       .4
                             :
Africa                       :     .325     .431     .698       .7       .9
  North Africa               :     .029     .032     .069       .1       .1
  Sub-Saharan Africa         :     .296     .399     .629       .6       .8
                             :
Latin America                :    5.515    5.282   10.197      9.9     10.0
  Mexico                     :    2.103    1.933    3.716      3.7      3.6
  Other Latin America        :    3.412    3.349    6.481      6.2      6.4
    Brazil                   :     .774     .549    1.323      1.4      1.2
    Chile                    :     .344     .375     .537       .5       .6
                             :
Canada                       :    2.604    3.075    5.359      5.9      6.1
                             :
Oceania                      :     .824     .741    1.750      1.7      1.5
                             :
    Total                    :   14.856   15.694   29.530     29.5     30.5
                             :
  Developed countries        :    6.512    7.160   13.340     13.8     14.1
  Developing countries       :    8.020    8.141   15.542     15.0     15.7
  Other countries            :     .324     .394     .647       .7       .7
                             :                                             
 1/ Austria, Finland, and Sweden are included in the European Union.
2/ Less than $50 million.
 
                               Commodity Highlights
 
The forecast for fiscal 1996 exports of U.S. wheat and flour is increased $200
million from USDA's February forecast to $6.9 billion, despite a 2 million-ton
downward revision in export volume to 32.5 million tons.  The outlook for the
1996 U.S. crop has deteriorated in recent months, sending U.S. export prices
higher than previously anticipated.  Although the European Union (EU-15)
continues to restrict exports in response to high internal prices, imposing an
export tax on soft wheat since December, most of the other major exporters are
expected to have larger 1996 crops.  Also, current prospects point to larger
1996 crops in several major importers such as North Africa and Brazil.  High
prices for wheat flour has dramatically slowed demand for U.S. flour exports.
 
The forecast for U.S. coarse grain exports in fiscal 1996 is raised 2.7 million
tons and $800 million from the February forecast to 61.4 million tons valued at
$9.5 billion.  The export forecast for corn is raised 2.5 million tons and $800
million to 55.5 million tons valued at $8.6 billion.  Despite very high prices,
global demand for U.S. corn remains strong, boosting both the quantity and
value of U.S. exports.  U.S. sales to Mexico are up sharply in response to
drought-induced shortages.  With China's continued absence from export markets,
U.S. corn shipments to Japan and other Asian Pacific Rim markets continue
strong.  U.S. coarse grain exports to the EU-15 remain strong as European
buyers continue to import less expensive alternatives to high-priced domestic
feed grains.
 
The forecast for fiscal 1996 exports of U.S. rice is increased $100 million
from USDA's February forecast to $1.1 billion, despite a 200,000-ton downward
revision in export volume to 3 million tons.  The downward revision in export
volume is due to improved prospects for Asian rice production, and the
reduction of rice shipments to Brazil.  The average export price is revised
upward as the mix in U.S. rice exports shifts further to the higher valued
japonica variety produced in California.
 
The forecast for fiscal 1996 exports of U.S. oilseeds and products is lowered
800,000 tons and $600 million from the February forecast to 30.1 million tons
valued at $9.4 billion.  Soybeans and soybean products account for most of the
decline in both volume and value.  Although soybean export volume is expected
to remain unchanged at 22 million tons, the export value is reduced $200
million to $6.1 billion due to a downward revision in average prices.  Prices
are lowered  because of reduced global demand for U.S. soybean meal, and lower
meal demand in  the United States.  
 
The forecast for U.S. soybean meal exports is reduced 400,000  tons and $200
million from February's forecast due to stronger than anticipatedforeign
competition.  South American suppliers are crushing larger volumes on a
seasonal basis than was previously expected.  The forecast for U.S. soybean oil
exports is reduced 100,000 tons and $100 million from the February forecast. 
Exports to China are down sharply from last year largely because of higher
Chinese oilseed production, larger carry-in stocks following last year's record
imports, and increased purchases of soybean oil from Brazil.
 
The volume forecast for fiscal 1996 cotton exports remains unchanged at 1.7
million tons, however export value is raised $300 million from the February
forecast to $3 billion.  This upward revision in export value reflects higher
than previously expected prices following the continued tightening of domestic
supplies.  Foreign demand remains strong, particularly from China and to a
lesser extent the EU-15 and Mexico.
 
The fiscal 1996 forecast for U.S. exports of unmanufactured tobacco is
increased $100 million from the February estimate to $1.5 billion.  This upward
revision is largely due to stronger than previously anticipated demand from the
EU-15, one of the traditional export markets for U.S. leaf tobacco.  The fiscal
1996 forecast for U.S. exports of planting seeds remains unchanged at $700
million.
 
The forecast for fiscal 1996 exports of U.S. livestock, dairy, and poultry
products remains unchanged from the February forecast at a record $12.1
billion.  Downward revisions in the hides and skins and dairy product exports
are generally offset by an upward revision in U.S. poultry and product exports. 
Export prices for hides and skins are forecast to fall further than previously
expected, bringing down the value of exports.  Despite little change in export
volume, U.S. exports of hides and skins are expected to drop $300 million to
$1.6 billion.  The dairy export forecast is lowered $100 million to $800
million in view of the slower than expected pace of sales.  The fiscal 1996
forecast for poultry and product exports, however, is raised $300 million to a
record $2.7 billion.  Record sales of poultry meat, now forecast at 2.3 million
tons, are expected this year given that the outlook for sales to Russia remains
strong.
 
The forecast for fiscal 1996 exports of U.S. horticultural products is lowered
$600 million from the February forecast but remains a record $9.4 billion.  The
forecasts for both fruit and vegetable exports are lowered $100 million to $3.4
billion and $2.5 billion, respectively.  The forecast for tree nut exports
remains unchanged at $1.2 billion.  The slower than previously expected pace of
sales to Canada, Japan, and Mexico accounts for much of the downward revision
in total U.S. horticultural exports.  Much of the downward revision in sales to
Canada is due lower prices that have reduced the value of fresh vegetable
exports.  Sales prices for broccoli and celery are down from last year's level,
and lettuce exports have also fallen.  In the case of Japan, U.S. exports of
many fruits, vegetables, and other horticultural products have not kept pace
with earlier expectations.  The value of U.S. horticultural shipments to Mexico
from January through March 1996 has risen compared with the same period in
1995, indicating a rebound in U.S. sales after the peso devaluation sharply
reduced U.S. exports in 1995.
 
Economic Outlook
 
World real gross domestic product (GDP) is projected at 2.5 percent compared
with 2.7 percent in February because of reduced growth expectations in the
United States and the European Union, but growth remains stronger than the
revised 1995 estimate of 2.4 percent.  GDP in Asia, excluding Japan, is revised
upward to 7 percent, and remains at 2.7 percent for Latin America.  Growth
prospects in the former Soviet Union have weakened to less than 1 percent.
 
During the first quarter of 1996, the dollar appreciated about 3 percent 
vis-a-vis the yen and mark.  The dollar is expected to continue to slowly
appreciate in 1996 as the U.S. trade balance improves and interest rate
differentials favor the dollar.
 
                              Regional Highlights
 
U.S. agricultural exports to Mexico are forecast at a record $4.4 billion, $600
million higher than in February 1996.  Fiscal 1996 exports are expected to
surpass the 1994 record of $4.1 billion.  Exports during October 1995-March
1996 totaled $2.3 billion, 19 percent higher than a year earlier.  Exports to
Mexico are rising faster than earlier anticipated because of strong corn,
wheat, soybean, and cotton shipments.  Severe drought conditions and higher
prices are boosting exports to Mexico.  Supported by GSM-102 credit guarantees,
corn exports have risen 47 percent to 2.7 million tons through March 1996,
wheat rose 56 percent to 726,000 tons, and soybeans rose 69 percent to 1.1
million tons.  High-value product (HVP) exports remain weak compared with
record-setting 1994, however, data during January-March 1996 indicates that
U.S. meat, dairy, and horticultural product exports will surpass 1995 levels.
 
Exports to Southeast Asia are projected to rise to a record $3.8 billion
because of strong sales of wheat, corn, soybeans, and cotton.  Higher bulk
prices have boosted the year-to-date value to more than $2 billion, 49 percent
higher than a year earlier.  Sales are particularly strong to Malaysia,
Indonesia, and the Philippines.
 
The forecast for Japan is increased $300 million to a record $12 billion
because of higher bulk prices and increased demand for corn.  U.S. exports
through March rose 19 percent to $6 billion.  Red meat exports remain well
ahead of 1995, but fruit and vegetable shipments have slowed and could fall
below 1995 levels.
 
Export gains are offset by lower projected sales to South Korea, China, and
Canada.  The forecast for South Korea is reduced $600 million to $4 billion. 
Exports to South Korea rose 13 percent during the first 6 months of fiscal
1996, but the pace of sale has been slower than earlier anticipated.  Although
beef exports are ahead of last year, total animal product exports through March
1996 fell because of an 18-percent decline in hide exports, and smaller
decreases in fats and oils, poultry products, and other meats.  The outlook for
cotton shipments is also lowered.
 
The forecast for China is reduced to $2.5 billion.  Lower than expected corn
and soybean oil shipments account for the downward revision.  Year-to-date
exports declined 5 percent to $1.2 billion.  Exports to Canada are expected
lower at $5.9 billion.  The export forecast is decreased mainly because lower
prices for selected vegetables compared with the high levels of 1995 will
reduce export value.  Year-to-date shipments of fresh vegetables were unchanged
compared with fiscal 1995, but value was reduced 18 percent to $311 million
because of lower prices.  Also, exports of live animals, animal hides, and
sugar products are expected lower. 
 
                       U.S. Agricultural Export Programs
                                        
The Export Enhancement Program and the Dairy Export Incentive Program
 
On April 1, 1996, USDA announced a 3-month continuation of the interim Export
Enhancement Program (EEP) and Dairy Export Incentive Program (DEIP)
allocations.  EEP bonuses are available to 71 countries for 6.16 million metric
tons of wheat; 49 countries for 399,525 metric tons of wheat flour; 24
countries for 650,000 metric tons of barley and malting barley; 33 countries
for 112,675 metric tons of barley malt; 27 countries for 120,100 metric tons of
rice; 22 countries for 170,000 metric tons of vegetable oils; 27 countries for
11,946 metric tons of frozen poultry; and 7 countries for 6,184,500 dozen eggs. 
No EEP sales have been announced under the April 1 allocations.
 
DEIP program allocations are available to 97 countries for 48,000 metric tons
of nonfat dry milk; 84 countries for 4,000 metric tons of whole milk powder; 99
countries for 15,345 metric tons of butterfat; and 37 countries for 1,000
metric tons of cheddar, Feta, Gouda, cream, mozzarella, and processed American
cheese.  Fiscal 1996 DEIP bonuses for sales of nonfat dry milk, whole milk
powder, and cheese totaled $19.7 million as of May 28.
 
The 1996 farm bill capped the fiscal 1996 EEP spending level at $350 million,
but no cap was established for DEIP spending subject to GATT limits.  
 
CCC Export Credit Guarantee Programs
 
As of May 10, fiscal 1996 export credit guarantee program (GSM-102 and GSM-103)
allocations of $3.8 billion are about 10 percent higher than fiscal 1995
allocations for the same period.  However, fiscal 1996 sales of $2.4 billion as
of May 10 are more than 40 percent higher than sales for the same period in
fiscal 1995.  Importers in Mexico, the chief purchasers under the credit
guarantee programs, account for almost half of program sales, and have
exhausted their allocation of $1.1 billion.
 
Market Access Program (MAP)
 
On May 3, USDA announced $90 million in allocations under the newly-renamed
Market Access Program (MAP) to 66 nonprofit commodity groups to promote a wide
range of agricultural products.  The fiscal 1996 funding level for the MAP,
authorized in the 1996 farm bill, is $20 million less than in fiscal 1995 and
less than half the fiscal 1992 level of $200 million.  The MAP uses Commodity
Credit Corporation (CCC) funds to help U.S. producers, exporters, and trade
organizations finance cost-share promotional activities for U.S. agricultural
products.  Activities financed include consumer promotions, market research,
technical assistance, and trade servicing.
 
The bulk of the MAP goes to promotions of high-value and processed products
such as meats, fruits and vegetables, seafood, and dairy products. Generic
promotion activities predominate with about two-thirds of program expenditures,
while branded product promotions account for the other third. Fifty-six percent
of the funds for branded promotion--about $23 million--will go to small
companies and producers in 1996, up from 42 percent in 1994.  Another 20
percent of 1996 MAP funding for branded promotion will go to agricultural
cooperatives.
 
The 1996 farm bill prohibits direct MAP assistance for promotions of branded
products to foreign companies for foreign-produced products, or to companies
that are not recognized as small business concerns under the Small Business
Act, except for cooperatives and nonprofit trade associations.  MAP may not be
used to promote U.S. tobacco products or mink.
 
U.S. Food Aid Programs
 
Public Law 480 (P.L. 480), also known as the Food for Peace program, uses
appropriated funds to provide U.S. agricultural assistance to countries at
different levels of economic development.  The P.L. 480 program is comprised of
three titles.  Title I of the P.L. 480 program is administered by USDA, while
Titles II and III are administered by the U.S. Agency for International
Development (AID).  
 
Title I of P.L. 480 provides government-to-government sales of agricultural
commodities to developing countries under long-term credit arrangements. 
Repayments for commodities sold under this title may be made either in U.S.
dollars or in local currencies on credit terms up to 30 years.  The Federal
Agricultural Improvement and Reform Act of 1996 (FAIR) amended the Title I
credit sales program by authorizing agreements with private entities in
addition to foreign governments.  It also modified repayment terms for Title I
credit, including elimination of the minimum repayment period of 10 years and
the reduction of the grace period from 7 to 5 years.  The new provisions will
be incorporated into the fiscal 1997 program.  Title I appropriations may also
be used to fund the Food for Progress programs in countries that have made
progress toward introducing free-market principals into their economies.   
 
Title II provides for the donation of U.S. agricultural commodities by the U.S.
government to meet humanitarian food needs in developing countries. 
Commodities may be provided to meet emergency needs under
government-to-government agreements, through public and private agencies, and
other multilateral organizations.  Title III provides for
government-to-government grants to support long-term economic development in
the least developed countries.
 
P.L. 480 appropriations (program level) for fiscal 1996 are estimated at $316.3
million for Title I, $821.1 million for Title II, and $50 million for Title
III.  While this represents only a 5-percent decline in value from fiscal 1995,
total commodity shipments for 1996 are expected to fall to approximately 3.3
million tons, compared with 3.9 million tons in 1995.  This decline reflects
the steep rise in commodity prices during the last year.  
 
As of April 1, 19 countries have signed P.L. 480 Title I and Food for Progress
agreements, with allocations totaling $210 million.  This will provide about
856,000 tons of commodity assistance.  The Food for Progress programs, signed
with Albania, Georgia, Kyrgyzstan, and Tajikistan, accounted for $46 million of
this total.  Title I allocations totaling $25 million have been announced, but
not signed, with Angola, Moldova, and Poland. 
 
Approximately 40 percent of the Title II appropriations are for Sub-Saharan
Africa, with Liberia and Rwanda expected to receive large emergency shipments. 
None of the Title III funds have been allocated yet.
 
                               Import Highlights
 
U.S. agricultural imports are forecast at $30.5 billion, $1 billion higher than
in February.  Imports of cocoa, sugar, and horticultural products account for
the increase.
 
Cocoa imports are projected at $1.4 billion, $300 million higher than in
February, and cocoa volume is raised 200,000 tons to 900,000 tons.  Record
cocoa bean production has reduced import prices, and strong demand for
confectionery products has boosted import demand.
 
The forecast for sugar and related products is increased $300 million to $1.6
billion because of strong gains in sugar imports.  The tariff-rate quota for
sugar imports in fiscal 1996 has been raised to nearly 2.2 million short tons,
raw value, and imports for re-export (711,000 short tons, raw value) are
expected to be more than twice 1995 levels.  The volume of sugar, product
weight, is expected to reach 2.4 million metric tons in fiscal 1996.  Demand
for confectionery products remains strong in fiscal 1996.
 
Horticultural imports are forecast at $10.5 billion, $400 million higher than
February.  The projection for fruit imports, including bananas and juice, is
raised $200 million to $3.7 billion, mainly as prices are stronger than earlier
expected and volume is expected to remain about the same as in 1995.  Wine and
malt beverages are raised $100 million to $2.4 billion on strong gains from the
EU-15.  Nursery and cut flower imports are expected to be $900 million.
 
                          Note on horticultural volume
 
The horticultural import volume was adjusted to include processed fruit and
vegetable products.  Previously, horticultural volume only included fresh or
frozen fruit and vegetables.  The change will lend some comparability to the
export horticultural volume.  In fiscal 1995, fresh and frozen fruit volume was
1.889 million tons, and the forecast in February was 2.1 million tons.  Fresh
and frozen vegetables were 2.484 million tons in fiscal 1995, and the previous
forecast was 2.6 million tons.Approved by the World Agricultural Outlook Board
and released May 30, 1996.
The Outlook for U.S. Agricultural Exports is published in February, May,
August, and November.  The next quarterly summary is scheduled for release on
August 29, 1996.  The report summary may be accessed electronically.  For
details, call (202) 219-0515.
 
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