Fact File: Agricultural Exports Set a Slower Pace

Beset by sagging Asian demand, plummeting prices, a strong dollar and intense competition, U.S. agricultural exports retreated for the second straight year in fiscal 1998 (Oct. 1, 1997-Sept. 30, 1998). When final results were in, the value of U.S. farm and food product shipments to foreign markets totaled $53.6 billion, off 6 percent from 1997 and the weakest showing in four years.

Compared with 1996's peak of $59.8 billion, exports have now fallen 10 percent or $6 billion, with recovery not yet in sight. The current year is shaping up as the third in a row of decreasing sales.

Even with the downturn, fiscal 1998 featured some pluses. The U.S. share of global trade apparently held steady from the previous year, and there were new export records for a number of value-added products and a few leading markets. As a result, export value was still nearly $10 billion above any figure prior to 1995, when sales first jumped above $50 billion. Over the last 4 years, U.S. agricultural exports averaged $56.3 billion, up from $41.7 billion for 1991-94.

Wood and fish products fared generally worse than agricultural products in 1998, with export value declines of close to 20 percent. Combined U.S. exports of agricultural, wood and fish products totaled $61.8 billion, down from $67.4 billion in 1997.

Agricultural imports last year continued their record pace, climbing to $37.0 billion. Despite the combination of lower exports and higher imports, U.S. agriculture recorded its 38^th straight annual trade surplus at $16.6 billion.

Bulk Agricultural Exports Off 14 Percent

Bulk commodities took a hard hit in fiscal 1998. In year-over-year product comparisons, minuses outnumbered pluses 2 to 1, often reflecting both weaker prices and lower tonnages shipped. Exports were down 14 percent overall to $20.9 billion. Besides Asia’s economic woes, soybeans were jinxed by a record South American crop that followed a bumper U.S. harvest. Corn also faced more competition–from Argentina and China, for example. Wheat volume was up, buoyed by sales to Egypt, but anemic prices undercut export value. For cotton, record sales to Mexico were not enough to offset a sharp drop to China. Rice–bolstered by production shortfalls elsewhere–bucked the general downward trend, as did pulses.


	FY 1997	FY 1998	1997-98 Change

Commodity	---$ million---		Percent
Soybeans	*6,950	6,117	-12
Coarse grains	6,921	4,990	-28
Wheat	4,124	3,772	-9
Cotton	2,737	2,537	-7
Tobacco	*1,612	1,448	-10
Rice	962	1,134	+18
Pulses	262	319	+22
Peanuts	233	203	-13
Other	344	359	+4

Total	24,144	20,879	-14
*Denotes a record-high export value.

Exports of Intermediate Agricultural Products Down 2 Percent

U.S. exports of intermediate agricultural products held fairly steady overall at $12.1 billion, down less than 2 percent from the 1997 record. But it was boom or bust for many individual products. The oilseeds sector was a winner. Export values for soybean meal, soybean oil and other vegetable oils all rose to record levels, benefitting from increased shipments to key markets and reduced Malaysian palm oil production. Both tonnage and prices were up for animal fats, which got a boost from the higher veg oil prices and lower palm oil output. On the minus side, hides and skins took a beating as a result of weak Asian demand, especially from South Korea. Of the 11 major product groups, six recorded export value declines, while five chalked up gains in fiscal 1998.


	FY 1997	FY 1998	1997-98 Change

Commodity	---$ million---		Percent
Feeds & fodder	1,928	1,676	-13
Hides & skins	1,673	1,338	-20
Soybean meal	1,746	*1,944	+11
Veg. oils (excl. soy oil)	856	*1,027	+20
Planting seeds	*924	835	-10
Sugar, sweeteners & bev. bases	720	713	-1
Animal fats	514	627	+22
Live animals	622	655	+5
Soybean oil	516	*881	+71
Wheat flour	139	115	-17
Other	*2,686	2,312	-14

Total	*12,324	12,123	-2
*Denotes a record-high export value.

Consumer Food Exports Hold Near Record Level

For processed foods, beverages and other consumer-oriented agricultural products, 1998 broke a 13-year string of consecutive records. Although exports topped $20 billion for the third straight year, they were down slightly (less 1 percent) from 1997. New records were set by processed fruits and vegetables, snack foods, dairy products, wine/beer and a few other product groups. However, weak Japanese demand and Asian competition took a toll on fresh fruit, while previously high-flying poultry exports began to feel the tug of Russia’s financial crisis. Worth noting: Export value for consumer foods nearly matched that of bulk commodities, which used to reign supreme. Overall, consumer foods accounted for 38 percent of total U.S. agricultural exports in 1998, up from just 24 percent in 1990.


	FY 1997	FY 1998	1997-98 Change

Commodity	---$ million---		Percent
Meat, poultry, dairy
Red meats	4,341	4,408	+2
Poultry meat	*2,516	2,347	-7
Dairy products	874	*933	+7
Eggs & products	215	*226	+5
Fruits & vegetables
Proc. fruit/veg.	2,054	*2,088	+2
Fresh fruit	*2,084	1,858	-11
Fresh vegetables	2,068	1,115	+4
Fruit/veg.juices	685	*685	0
Snack Foods	1,252	*1,326	+6
Tree nuts	1,283	1,215	-5
Wine & beer	718	*793	+10
Pet foods	*745	735	-1
Breakfast cereals & pancake mix	342	*365	+7
Nursery products & cut flowers	221	*250	+13
Other	*2,396	2,281	-4

Total	*20793	20,626	-1
*Denotes a record-high export value.

Mexico, Canada and Egypt Resist Negative Trend

In most of fiscal 1998's top 10 markets, U.S. agricultural exports lost ground, but three markets stood above the crowd. New sales records were set to both NAFTA partners, Canada and Mexico, on the strength of rising consumer food sales to our northern neighbor and solid gains in all three categories (bulk, intermediate and consumer) to Mexico. Exports to Egypt were up slightly, bolstered by larger U.S. wheat shipments. Welcome as they were, these gains could not offset the falloff in sales to other leading markets. Total U.S. agricultural exports to Asia dropped 18 percent from 1997. South Korea was down 32 percent, and No. 1 market Japan was down 12 percent–though the U.S. share of Japan’s total agricultural imports held steady at 36-37 percent.


	FY 1997	FY 1998	1997-98 Change

Commodity	---$ million---		Percent
Japan	10,698	9,447	-12
European Union	8,765	8,318	-5
Canada	6,601	*7,000	+6
Mexico	5,066	*5,947	+17
South Korea	3,283	2,242	-32
Taiwan	2,582	1,966	-24
Hong Kong	*1,633	1,557	-5
China	1,773	1,501	-15
Russian Fed.	*1,281	1,103	-14
Egypt	918	939	+2
Rest of World	14,660	13,610	-7

Total	57,261	53,629	-6
Data include bulk, intermediate and consumer-oriented agricultural exports.
*Denotes a record-high export value.

After Record Year, Wood Products Take a Tumble

After the previous year’s record-setting $7.5 billion, U.S. exports of solid wood products tumbled in fiscal 1998 to the lowest level of this decade–down nearly 20 percent to $6.0 billion. Softwood log and lumber exports slumped badly in response to strong U.S. demand and further weakness in Japan’s depressed housing industry. Wood product sales to Japan, the top U.S. market, fell to $1.7 billion, down 43 percent from 1997's $2.9 billion. Sales to Canada were up slightly, reaching a new record at more than $1.5 billion.


	FY 1997	FY 1998	1997-98 Change

Commodity	---$ million---		Percent
Logs & chips	2,434	1,708	-30
Lumber
Hardwood	*1,418	1,239	-13
Softwood/treated	1,208	768	-36
Panel products	*1,122	1,024	-9
Other	*1,303	1,267	-3

Total	*7,485	6,006
*Denotes a record-high export value.

Seafood Sales Caught in Sea of Minuses

A sharply reduced Alaskan salmon harvest, continued low salmon prices and sluggish Japanese demand for edible fish and seafood products contributed to a third straight year of declining U.S. export sales. Fiscal 1998 exports totaled less than $2.2 billion, down 19 percent from the previous year. Value declines were registered in all major product categories, except canned salmon. Sales to Japan dropped 34 percent to $926 million, although exports increased by 6 percent to No. 2 market, Canada. The record for U.S. fish and seafood exports remains at $3.3 billion set in fiscal 1992.


	FY 1997	FY 1998	1997-98 Change

Commodity	---$ million---		Percent
Salmon
Whole/eviscerated	312	246	-21
Canned	135	140	+4
Roe & urchin
(fish eggs)	395	270	-32
Surimi
(fish paste)	323	271	-16
Crab/crabmeat	148	120	-19
Other	1,374	1,127	-18

Total	2,687	2,174	-19
*Denotes a record-high export value.

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The author is a special assistant, Commodity and Marketing Programs, FAS. Tel. (202) 720-2922; E-mail: carterew@fas.usda.gov