U.S. Agricultural Trade: Trends, Composition, Direction, and Policy
Released: 2012-05-21T00:00:00

U.S. Agricultural Exports, Imports, and Trade Balance

According to USDA, FY2012 agricultural exports are forecast to reach $131 billion, slightly below the fiscal 2011 record level of $137 billion. U.S. agricultural imports are forecast to reach $106.5 billion in FY2012, a record high and a $12 billion increase over FY2011 agricultural imports. The expected $24.5 billion U.S. agricultural trade surplus for FY2012 is below FY2011's all-time high of $42.9 billion.

Shares of U.S. Crop Production Exported: Selected Commodities

In 2011/2012, a forecast 48.8% of the U.S. wheat crop will be exported, while 13.8% of the U.S. corn crop will move into world markets. The export share of soybeans is forecast to be 41.7% in 2011/2012. Oilseed exports are down slightly due to early-season shipments from South America. Cotton's export share in 2011/2012 is forecast to be 70.2%. Cotton is the United States' most export-dependent field crop.

Shares of U.S. Livestock Products Exported: Selected Commodities

U.S. livestock products are much less export-dependent than crops. Beef exports, which grew from around 4% of production in 1990 to almost 10% by 2003, have slowly recovered from export bans on U.S. beef following the 2003 discovery of a BSE-infected cow in the United States. The beef export share of production in 2012 is forecast to be 11%. Pork exports as a share of production have grown substantially, from 1.6% in 1990 to a forecast 22.1% in 2012. Poultry's export share of production has almost tripled since 1990, from 6.2% to a forecast 18.3% in 2012.

Composition of U.S. Agricultural Exports: Major Commodity Components

The United States exports a wide range of agricultural products, including horticultural products, field crops, livestock products, and poultry. Horticultural product exports (fruits, vegetables, tree nuts, and their preparations)—forecast at $28 billion for FY2012—comprise the largest commodity category of U.S. agricultural exports in FY2012. Oilseeds (mainly soybeans) and oilseed products (mainly meal and oil)—with a forecast value of $25 billion in FY2012—are the second-largest commodity component of U.S. agricultural exports. Livestock and poultry products together would amount to more than $24 billion in FY2012. Field crop exports (including feed grains, wheat, cotton, and tobacco) are forecast to account for more than $35 billion of U.S. agricultural exports in FY2012.

Composition of U.S. Agricultural Exports: Bulk, Consumer-Ready, and Intermediate Product Exports

Bulk agricultural export s include products like wheat, coarse grains, cotton, and soybeans. Intermediate product s have been processed to some extent and include products like wheat flour, soybean oil, and feeds. Consumer-ready products include both processed products such as breakfast cereals and products such as fresh fruits and vegetables, meat and dairy products, and wine and beer. Until 1990, bulk agricultural exports were the mainstay of U.S. farm export trade. The total of high-value (intermediate plus consumer-ready) products has exceeded the value of bulk agricultural exports in every fiscal year since FY1991. In FY2011, high-value exports accounted for 56.3% of total U.S. agricultural exports and bulk exports for 43.6%.

Major Country Markets for U.S. Agricultural Exports

Canada , with Mexico a U.S. partner in the North American Free Trade Agreement (NAFTA), is the largest market for U.S. agricultural exports, with exports valued at $19 billion. Mexico is the second-largest market, with exports valued at $17.5 billion. Total U.S. agricultural exports to its NAFTA partners are forecast at $36.5 billion for FY2012. Chi na is third-largest market for U.S. agricultural exports in FY2012, with exports valued at $17 billion. Japan ($13.5 billion forecast for FY2012), which was the number-one U.S. destination for agricultural products for many years, is forecast to be the fourth-largest export destination. It is followed by the EU-27 , the fifth-largest U.S. farm export market, with forecast agricultural exports of $10 billion. Other Asian markets— South Korea , Taiwan , Hong Kong —also are major markets for U.S. agricultural exports, with forecast values in FY2012 of $6.9 billion, $3.5 billion, and $3.3 billion, respectively.

World Export Market Shares: Crops

Wheat: The United States is the major supplier of wheat and wheat products to the world market, with a forecast export market share of 18.6% in marketing year 2011/2012. Australia (15.1%), the Russian Federation (14.0%) and Canada (12.9%) are major competitors in this market (see Figure 7 and Table 7 ). Rice: Thailand (22% export market share forecast for 2011/2012) is the world's major rice exporter, but Vietnam (21%) has emerged as a major competitor. India (14.1%) and Pakistan (11.8%) are forecast to have the third- and fourth-largest export market shares in 2011/2012. The United States would be the world's fifth-largest rice exporter with a forecast share in 2011/2012 of 9.6% (see Figure 8 and Table 8 ). Corn: The United States has the world's largest export market share for corn, with a 2011/2012 forecast share of 44.4% (see Figure 9 and Table 9 ). Since the mid-1990s, Brazil has increased its share of world corn exports, while China, an exporter of corn during most of the last 16 years, has lost export market share. Soybeans: Brazil is forecast to be the world's main supplier of soybeans to the world market in 2011/2012, with a share of 40.7%. Brazil's export market share has grown compared to its 10.9% share in 1995/1996. The United States is forecast to have the second-largest export market share at 37.4%, down from 73% in 1995/1996 (see Figure 10 and Table 10 ). Cotton: U.S. cotton exports are estimated to be 30.1% of the world total in 2011/2012. U.S. competitors include India (16.4%), Australia (11%), Uzbekistan (7.5%), and West/Central African countries (6.4%) (see Figure 11 and Table 11 ).

World Market Shares: Livestock and Dairy

Beef: Australia, with 16.8% (forecast) of world exports in 2012, is the largest supplier of beef to world markets. The U.S. share of world beef exports is forecast to be 15.2% in 2012. Lingering effects of mad cow disease continue to affect demand for U.S. beef in world markets; the U.S. share of world beef exports had reached 18.9% in 2000. (See Figure 12 and Table 12 .) Pork: The United States is forecast to have the largest export market share for pork (35.3%) in 2012. Main competitors for pork export market shares include the EU (29.0%) and Canada (17.7%). (See Figure 13 and Table 13 .) Poultry: Brazil is the world's leading supplier of poultry meat to the world market (36.1% forecast export market share for 2012). The United States, with 31.7% of world poultry meat exports, and the EU, with 11.7%, have lost market share to Brazil over the past decade. (See Figure 14 and Table 14 .) Dairy Products: For 2012, New Zealand (29.3%) and the EU (27.3%) are forecast to be the leading suppliers of nonfat dry milk to world markets (see Figure 15 and Table 15 ). The EU (44.5%) is the leading supplier of cheese to world markets (see Figure 16 and Table 16 ), while New Zealand (61.1%) is the world's largest exporter of butter (see Figure 17 and Table 17 ).

World Market Shares: Sugar

Brazil is the world's leading exporter of sugar, with an export market share forecast at 42.0% for 2011/2012. DR-CAFTA (including the Dominican Republic and Central American countries), with 5.4% of global sugar exports, is forecast to be the world's second-largest exporter of sugar in 2011/2012. The United States is a sugar importer, with negligible sugar exports (forecast to be 0.3% for 2011/2012).

Major U.S. Agricultural Imports

High-value horticultural products (fruits, nuts, vegetables, and preparations; wine and malt beverages; nursery stock and flowers; and others) are the largest category of U.S. agricultural imports, and are forecast to be $43.3 billion in FY2012. Other sizeable commodity imports forecast for FY2012 are livestock and dairy ($13 billion), grains and feeds ($9.3 billion), and oilseeds and products ($8.1 billion). Imports of tropical products such as coffee, cocoa, sugar, and products are forecast to be $31.1 billion in FY2012.

U.S. Agricultural Imports by Country of Origin

NAFTA partners Canada ($20.7 billion) and Mexico ($17.3 billion) and the EU-27 ($16.8 billion) are forecast to be the source of more than 50% of total U.S. agricultural imports ($106.5 billion) in FY2012. Indonesia is expected to ship $4.7 billion of farm products to the United States in FY2012; agricultural imports from Brazil are expected to reach $4.4 billion in FY2012. Australia, with whom the United States entered into a free trade agreement (FTA) in 2005, is forecast to provide the United States with $2.4 billion worth of agricultural imports in FY2012. Colombia, a prospective FTA partner, is forecast to ship $2.6 billion of farm products to the United States in FY2012.

Regional Market Growth in U.S. Agricultural Exports

Economic growth in Asia has contributed to relatively consistent long-term growth in U.S. agricultural exports to the region. Despite some year-to-year variation, the EU, the United States' fifth-largest agricultural export market, has been a relatively stable market for U.S. agricultural exports, with little growth since 1992. Agricultural exports to countries in the former Soviet Union have declined in value since the 1992 break-up of the USSR. Agricultural exports to Latin America, including Mexico, and to Canada have grown rapidly since the early 1990s, due in part to geographic proximity and NAFTA, among other factors.

Growth in U.S. Agricultural Exports to Asian Markets

Like the EU, Japan also has been a relatively stable and slow-growing market for U.S. agricultural exports. U.S. agricultural exports to China, fueled by rates of GDP growth in excess of 9%, have grown rapidly since the early 1990s (16.4%). FY2012 U.S. agricultural exports to China are forecast to be more than 10 times their value in FY2001, when China became a member of the World Trade Organization. Rapid income growth in Southeast Asia also has stimulated demand for U.S. agricultural exports since 1992. Agricultural exports to South Asia also have shown growth since 1992.

Growth in Agricultural Exports to North and South America

Growth in U.S. agricultural trade with Canada and Mexico, both NAFTA trading partners, and with Latin America has been particularly strong since 1992. U.S. agricultural exports to Canada are forecast to be $19 billion in FY2012. U.S. agricultural exports to Mexico are expected to be $17.5 billion in FY2012. U.S. agricultural exports to Latin America (excluding Mexico) are expected to reach $12.3 billion in FY2012, down from $12.4 billion in FY2011.

U.S. Agricultural and Trade Policies

Domestic Support

The Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 , 2008 farm bill) was enacted into law in June 2008 and will govern most federal farm and food policies through 2012. The 2008 farm bill provides price and income support to U.S. agricultural producers through 2012. In addition, the farm bill authorizes programs for conservation, rural development, nutrition (domestic food assistance), trade, and food aid. Budgetary outlays for all U.S. agricultural programs were $139.3 billion in FY2011.

By one widely used measure, the producer support estimate (PSE) calculated by the Organization for Economic Cooperation and Development (OECD), the United States provided an estimated $25.6 billion in agricultural support to producers in 2010 (provisional estimate). PSEs measure assistance to producers in terms of the value of monetary transfers generated by agricultural policy. Transfers are paid by consumers or by taxpayers in the form of market price support, direct payments, or other support. They are a broader measure of support than direct government spending alone. The percentage PSE measures support in relation to gross farm receipts. As a percent of gross farm receipts, the PSE for the United States is 7% in 2010, the third-lowest among OECD countries ( Figure 24 , Table 24 ). OECD attributes a decrease of 3% (over 2009) in the PSE expected for the United States for 2010 to a decrease in market price support for dairy. Over a longer period, the trend in producer support in the United States has been downward, dropping from a PSE of 22% in 1986-1988 to 7% in 2010. Among U.S. commodities, sugar is the most highly subsidized product in the United States, with a provisional single commodity transfer estimated at 28.3% of the gross value of sugar production in 2010 ( Figure 25 , Table 25 ).

Trade Measures

With agricultural exports totaling $137 billion in FY2011, the United States is the world's largest exporter of agricultural products. The United States applies tariffs and tariff quotas to products entering the United States from abroad. According to the World Trade Organization (WTO), the United States' average applied tariff for agricultural products is 8.9%, which is above the average applied U.S. tariff for non-agricultural products (4%), but relatively low compared to other WTO member countries. About 170 tariff lines (a tariff line is a product as described in a schedule or list of tariffs) are subject to tariff quotas, including beef, dairy products, and sugar. The average in-quota tariff was 9.1% in 2007, while the out-of-quota was 42%.

Under the WTO Agreement on Agriculture, the United States made export subsidy reduction commitments for 13 commodities. The 2008 farm bill repealed authority for the Export Enhancement Program (EEP), which was used to fund subsidies for those products, with the exception of dairy products. Export subsidies, in the form of cash bonuses, can be provided to exporters of dairy products under the Dairy Export Incentive Program (DEIP), which was reauthorized in the 2008 farm bill through 2012. Prior to its repeal, no expenditures were made for EEP from FY2002. Spurred by declining prices for dairy products in 2008-2009, USDA announced in May 2009 DEIP allocations for nonfat dry milk, butter fat, and cheeses. DEIP bonuses of $19 million were awarded in FY2009. In FY2010, DEIP bonuses of $2 million were awarded. No bonuses were awarded in FY2011.

A federally chartered public corporation operated by USDA, the Commodity Credit Corporation (CCC), makes credit guarantees available to private financial institutions who finance the purchase of U.S. agricultural exports. Under the GSM-102, the CCC guarantees repayment of credit made available to finance U.S. agricultural exports on credit terms of up to three years. Exporters tallied $4.1 billion of agricultural exports under the GSM-102 program in FY2011. USDA announced $5.4 billion in CCC guarantees for agricultural exports under the GSM-102 program for FY2012. The CCC also operates the Facilities Guarantee Program (FGP), which guarantees credit to U.S. banks that finance export sales of U.S. goods and services that are used to improve agricultural export-related facilities in emerging markets (storage, processing, and handling facilities).

Two export market development programs, the Market Access Program (MAP) and the Foreign Market Development Program (FMDP), assist producer groups, associations, and firms with promotional and other activities.

Food Aid

The United States is the world's leading supplier of food aid. It provides more than half of the global total.

The United States provides food aid mainly through P.L. 480, also known as the Food for Peace Program. Wheat and wheat flour are the main commodities provided as food aid, but rice and vegetable oils are also important in P.L. 480 programs. Higher-value products are made available in special feeding programs. Responsibility for implementing food aid programs is shared by USDA and the U.S. Agency for International Development (AID).

P.L. 480 food aid is provided on a grant basis through Title II of the Food for Peace Act of 2008, the successor legislation of the Agricultural Trade and Development Assistance Act of 1954 (P.L. 480). Two other food aid programs are conducted under Section 416(b) of the Agricultural Act of 1949 and the Food for Progress Act of 1985. The former provides surplus CCC inventories, if available, as donations; the latter provides concessional credit terms or commodity donations to support emerging democracies or countries making free market economic reforms. A recently enacted food aid program, the McGovern-Dole School Food for Education Program, finances school feeding and child nutrition projects in poor countries.