At the U.S. Department of Agriculture Agricultural Outlook Forum, Secretary Ed Schafer announced that U.S. agricultural exports are forecast to reach a record $101 billion for fiscal year 2008, up $10 billion from November's forecast and an unprecedented $19 billion above 2007.
This latest forecast builds off unprecedented consecutive year to year record exports since 2004. Higher wheat, coarse grain, and soybean prices account for just over half of the revision since November.
“Based on current market conditions, bulk grains, oilseeds, and cotton exports should rise $13.2 billion and account for 70 percent of the overall increase in export value for 2008. Higher prices account for most of this increase, but export volumes are also generally higher,” Schafer said. “Coarse grains are forecast to rise 10.9 million tons to 70 million tons and wheat should rise 2.3 million tons.”
“We also see further increases in high-value product exports such as fresh and processed fruits and vegetables, tree nuts, pork, beef, poultry meat, and many grocery products. Exports of animal and horticultural products are forecast to rise a combined $3.5 billion in 2008 to record levels. With U.S. agricultural imports forecast at $76.5 billion, we expect a $24.5 billion trade surplus,” said Schafer.
Foreign economic growth continues to support gains in consumer incomes and growth in the size of the middle class, particularly in the emerging markets. These consumers tend to spend more on food as their incomes rise, including food imported from the United States.
The weaker dollar makes U.S. products very price competitive compared to other suppliers. At the same time, tighter competitor stocks further raise demand for U.S. wheat and corn.
“Trade agreements have a significant impact on our ability to compete and sell our agricultural commodities in world markets,” said Schafer. “If Congress ratifies the pending free trade agreements with Colombia, Panama, and Korea, the increased access will boost our producers' exports even higher.”
USDA's Foreign Agricultural Service, Economic Research Service, and World Agricultural Outlook Board release agricultural trade forecasts quarterly.