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P.L. Thomas (PLT)
Secretary Ed Schafer announced yesterday that exports are forecast to reach a record $101bn for fiscal year 2008, up $10bn from November's forecast and $19bn above 2007.
Higher unit values for wheat, feed grains, and soybeans and products account for about $6bn, or just over half of the overall increase since November, said the USDA.
The cost of these commodities have spiraled over the last year, as a result of record highs for the cost of oil, poor weather damaging crops, a greater need for biofuels and increased global demand fuelled by emerging markets.
"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," said Schafer.
"Higher prices account for most of this increase, but export volumes are also generally higher."
Coarse grains, i.e. cereal grains for use in animal feed and brewing, are forecast to rise 10.9m tons to 70m tons and wheat should rise 2.3 m 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," said Schafer.
Shipping volumes for most meats have increased over 2007 on the back of strong demand, a weak dollar, and adequate domestic supplies, said the USDA's report. Similar market conditions will continue benefit horticultural exports.
Schafer said: "Exports of animal and horticultural products are forecast to rise a combined $3.5bn in 2008 to record levels. With US agricultural imports forecast at $76.5 billion, we expect a $24.5 billion trade surplus."
The USDA said that foreign economic growth continues to support gains in consumer incomes and the growth in the size of the middle class, particularly in emerging markets. These consumers generally spend more on food as their incomes rise, which includes food imported from the United States.
The weaker dollar impacted on the industry, making US 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," added Schafer.
"If Congress ratifies the pending free trade agreements with Colombia, Panama, and Korea, the increased access will boost our producers' exports even higher."
