Agricultural exports are important to both farmers and the U.S. economy. With the productivity of U.S. agriculture growing faster than domestic demand, farmers and agriculturally oriented firms rely heavily on export markets to sustain prices and revenue. According to the U.S. Department of Agriculture's (USDA's) Economic Research Service (ERS), agricultural exports have exceeded agricultural imports in every year since 1960 ( Table A-1 ). The value of agricultural exports has exceeded imports by a wide margin in recent years, but this trend reversed course in FY2015, with the positive balance expected to narrow further in FY2016 ( Figure 1 ). In FY2014, U.S. agricultural exports reached a peak of $152.3 billion, topping the previous record high of $141.1 billion in FY2013. Agricultural imports have risen steadily over this period, climbing from $103.9 billion in FY2013 to $114 billion in FY2015, narrowing the agricultural trade surplus from $43.1 billion in FY2014 to $25.7 billion in FY2015. Looking to FY2016, USDA projects that the trends that resulted in a narrower farm trade surplus in FY2015 will persist. The agency expects U.S. exports to recede to $125 billion while imports climb to $118.5 billion, resulting in a substantially smaller farm trade surplus of $6.5 billion in FY2016 and marking what would be the smallest surplus since FY2006. For perspective, USDA estimates that during the most recent three years (2013-2015), the value of U.S. agricultural exports accounted for between 10% and 11% of total U.S. exports, while U.S. agricultural imports made up 5% of total imports. Within the agricultural sector, the importance of exports looms even larger, accounting for 20% of the value of overall agricultural production in 2013, the most recent year for which USDA data are available. Foreign markets represent the largest outlet for a number of U.S. farm commodities while providing a substantial market for many other agricultural products. During the 2014/2015 marketing year, export markets absorbed 69% of U.S. cotton production, 41% of wheat output, and 47% of the soybean harvest. In the livestock sector, USDA estimates the export share of pork, broiler meat, and beef production in 2015 amounted to 20%, 16%, and 10%, respectively. Foreign markets also represent the largest outlet for certain specialty crops, including tree nuts. USDA indicates that during the 2014/2015 season, export markets absorbed 71% of the marketable production of U.S. walnuts, 68% of almond production, 75% of the pecan crop, and 59% of pistachios. The top country destinations for U.S. agricultural exports in FY2013 are given in Table 1 . In FY2012, China surpassed North American Free Trade Agreement (NAFTA) partner Canada as the leading market for U.S. agricultural exports, and China retained the top spot in FY2015. The leading agricultural commodity exports by value in FY2015 are shown in Table 2 . Strong demand for soybeans, especially from China, helped make soybeans the largest U.S. agricultural export commodity that year. Concerning the composition of agricultural exports, bulk commodities such as soybeans and corn continue to rank at the top of the list of farm exports by value, but the mix of exports continues to favor high value products (HVPs) over bulk commodities. The HVP category includes such products as live animals, fruits and vegetables, nuts, fats, hides, feeds, sugar products, meat, milk, grain products, and processed fruits and vegetables. In FY2015, HVP products comprised 67% of all U.S. agricultural exports, about the same as in FY2013 and compared with a 62% share in FY2010. USDA projects that the HVP share of U.S. farm exports will continue to increase, potentially reaching 74% of the total by 2025. The growth in HVP sales is expected to be led by increases in animal-based products and horticultural products. Agricultural exports make a significant contribution to the overall U.S. economy. USDA estimates that each dollar of agricultural exports stimulates an additional $1.27 in business activity, while each $1 billion in agricultural exports supports 7,550 jobs. Nearly every state produces agricultural commodities that are exported. Actual exports of agricultural commodity production by state are not available as such, but USDA provides estimates of commodity exports by state based on data for U.S. farm cash receipts. Table 3 provides a listing of the 10 states with the highest estimated shares of U.S. agricultural exports by value in calendar year (CY) 2014. These 10 states accounted for 56% of total U.S. agricultural exports that year. U.S. and global trade are greatly affected by the growth and stability of world markets. Changes in world population, economic growth, and income; tastes and preferences in foreign markets; and exchange rates are most likely to alter global food demand. U.S. domestic farm policies that affect price and supply, as well as trade agreements with other countries, also influence the level of U.S. agricultural exports. According to USDA, world economic growth—particularly sustained relatively high growth in developing countries—provides a foundation for increases in global food demand, trade, and agricultural exports. Developing countries are expected to drive most of the growth in demand for U.S. agricultural exports in the years ahead, reflecting the outlook for faster population growth in these countries and rising incomes associated with an expanding middle class. These economic trends, coupled with younger population demographics and increased urbanization, are closely associated with greater diversification of diets and increased demand for meat, dairy products, and processed foods that tend to shift import demand in favor of feedstuffs and HVPs. Global economic growth is projected to rise to 3.1% in 2016 from 2.8% in 2015, according to USDA. Table 4 contains a breakdown of growth prospects by major regions and key countries. Economic growth is expected to be led by moderately stronger growth in the United States, a further uptick in economic activity in the European Union and Africa, and relatively stable growth prospects in Asia and Oceania overall amid slower growth in China. A further downturn in Brazil's economic prospects may weigh on growth prospects in South America. A leading factor in the decline in the value of U.S. agricultural exports in FY2015 was lower prevailing market prices for numerous farm commodities. For instance, the average farm prices of 2014-crop soybeans and corn (marketed from September 1, 2014, to August 31, 2015) were lower than average prices for the 2013 crops by 22% and 17%, respectively. Farm prices for major animal products—including beef cattle, hogs, broilers, and milk—were also lower in 2015 compared to 2014, thereby contributing to the lower dollar value of export sales in FY2015. Another factor influencing U.S. agricultural trade is the value of the U.S. dollar relative to foreign currencies. Following a 10-year period of dollar depreciation from 2002 to 2011, the U.S. currency has since strengthened. The dollar is projected to continue to strengthen relative to most foreign currencies in 2016, though not as sharply as it appreciated in 2015 ( Figure 2 ). In part, the stronger U.S. dollar reflects relatively favorable economic prospects for the U.S. economy compared with circumstances elsewhere. For agriculture, a stronger dollar makes U.S. commodities more expensive in local currency for foreign buyers and renders U.S. products less competitive in relation to commodities from export competitors with weaker currencies, such as Brazil and Argentina. In this way the stronger dollar contributed to a lower level of farm exports in FY2015 with projected dollar strengthening expected to have a similar effect in FY2016. The stronger dollar also encourages increased levels of U.S. agricultural imports by making foreign products cheaper in U.S. dollar terms. U.S. trade policy and geopolitical events also factor into the level of agricultural exports. Trade liberalization efforts aim to expand international commerce by lowering various barriers to trade and broadening access to foreign markets. These efforts include multilateral agreements under the auspices of the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO), as well as regional trade agreements such as NAFTA, and bilateral free trade agreements, including the recent Korea-U.S. Free Trade Agreement (KORUS FTA). Geopolitical events, such as economic sanctions, can influence the scope of trade in agricultural products as well. The effects of sanctions are often temporary, as commodities are fungible and trade flows tend to realign. One such event was the embargo that President Jimmy Carter imposed on U.S. grain sales to the Soviet Union in January 1980 in response to the Soviet invasion of Afghanistan in December 1979. At the time, the Soviet Union was the largest importer of U.S. grain and feed. The quantity of U.S. grain and feed exports to the Soviet Union plunged by 66% in 1980, but total exports of U.S. grain and feed that year climbed by 10% as other importers absorbed the displaced grain. More recently, on August 7, 2014, Russia banned the import of certain foods—including certain beef, pork, poultry, fish, seafood, fruits, nuts, vegetables, sausages, and prepared foods—from a number of Western countries, including the United States, in retaliation for economic sanctions imposed on Russia for its actions in Ukraine. Banned food imports from the affected countries amounted to 22% of the value of Russia's food imports in 2013. The U.S. share of the affected product imports amounted to about 9% of the total but comprised only about 0.5% of annual U.S. agricultural exports.