Strength in imports whittles at U.S. ag trade surplus

In the report by USDA’s Economic Research Service and Foreign Agricultural Service, fiscal 2004 ag exports are projected at $57 billion, up only $1.5 billion from 2003’s revised estimate of $55.5 billion.

Imports are expected to hit $47.5 billion, up $2.5 billion from the revised $45 billion in 2003.

Although economists Carol Whitton with the ERS and Ernest Carter with the FAS note that U.S. and world economies “are moving beyond the slow growth experienced in the last two years,” they say economic growth in the U.S. “still remains below long term rates,” with slower consumer spending and higher rates of savings.

With only minimal economic growth in the European Union and continued “lackluster” growth in Japan, they say renewed growth in the U.S. “is particularly important for developing countries dependent on exports to the U.S.” Economic growth in developing countries is forecast at better than 5 percent for 2004.

“Asia continues to be the most dynamic region of the world,” they say, and China and India “continue to grow at high rates.”

After a four-year recession, Argentina is expected to return to normal growth and its currency depreciation against the U.S. dollar “is making its products highly competitive in world markets.”

Looking at specific commodities, Whitton and Carter forecast the following:

•Grain and feed exports at $15.5 billion, up $600 million. Coarse grain exports are forecast at 51.9 million tons, up 5.6 million tons. Rice exports are expected to hit 3.1 million tons, “a large decline” from the record 4.3 million tons estimated for fiscal 2003.

•Oilseeds are forecast at $9.1 billion, $1 billion lower than last year. Soybean export volume is expected to drop 1.1 million tons under continuing pressure from South American beans. Soybean exports are forecast to fall $800 million to $5.7 billion.

•Cotton export volume is forecast unchanged at 2.6 million tons, but sharply higher unit prices should raise the value by $700 million from the $3.5 billion estimated for 2003. Consumption is expected to be greater than production and global stocks will continue to decline.

•Livestock, poultry, and dairy product exports are a bright spot, expected to hit a record $12.4 billion.

•Another record is also forecast for exports of horticultural products, $12 billion, fueled by stronger global demand and a more competitive dollar.

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