VALUE OF U.S. AGRICULTURAL EXPORTS MAY DROP; VOLUME UP

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1 OUTLOOK FOR U.S. AGRICULTURAL EXPORTS Approved by the World Agricultural Outlook Board Economic Research Service, and Foreign Agricultural Se;vice, U.S. Department of Agriculture November 29, 1982 VALUE OF U.S. AGRICULTURAL EXPORTS MAY DROP; VOLUME UP U.S. farm exports are expected to decline further in fiscal 1983, as large global crop supplies and weak demand keep prices under pressure. After an 11-percent drop in fisc~l 1982 to $39.1 billion, this year's exports could fall to about $37-i/2 billion. Record U.S. crops and sluggish economic conditions have driven U.S. commodity prices down. However, because of the appreciating dollar, the lower prices have not stimulated a proportionate increase in foreign demand. With relatively little change in agricultural imports, the agricultural trade surplus is expected to fall to around $22 billion. Export volume is expected to be up slightly from last year's 158 million tons and roughly the same as in 1980 and Recovery in the feed grain market may provide most of the growth, accompanied by expanded soybean meal exports and continued heavy wheat shipments. However, given uncertainty about world demand and production prospects in the Southern Hemisphere, export volume could be around 10 million tons above or below the current forecast. Prices are also very uncertain, and the value of U.S. exports could vary by about 10 percent. Stronger-than-expected economic recovery or a prolonged slump would alter the export forecast significantly. Further, the worldwide economic slowdown has magnified the impact of the strong U.S. dollar, and the outlook for currency movements is highly uncertain. Feedstuff exports will also depend on livestock industries. Foreign poultry production is currently forecast up 2 percent in 1982 and 3 percent in Pork production may remain about unchanged, with declines in Poland and Mexico offsetting small gains elsewhere. Exports of raw materials could respond quickly to economic developments or to protectionist moves against manufactured goods exported by our major markets. In addition, high-valued food items are particularly senstive to changes in the dollar and consumer spending. The continued financial problems of many developing countries make forecasts of their imports tentative. If the world financial climate improves and these countries receive higher export revenues, their food imports could increase; deterioration in their financial condition could dampen commercial imports of agricultural products.

2 World agricultural trade will be intensely competitive in 1982/83. Governments are providing substantial export subsidies and negotiating trade agreements to boost sales. The United States is making diplomatic efforts to overcome unfair trade practices and trade restrictions. The United States is also pursuing aggressive export expansion programs, including the blended credit program (seep. 9). With weak demand and generally abundant exportable supplies, the U.S. share of the world market is a major concern. Foreign crop developments could dramatically alter the outlook for fiscal Of particular concern are Argentine and Brazilian harvests and crop prospects in the Northern Hemisphere next spring and summer. Import policies of our major markets are an additional uncertainty. Early indications of a crop shortfall in the United States would boost export prices above the current forecast, but expectations of another bumper harvest could further depress them. Commodity Highlights U.S. grain exports may increase 4 to 5 million tons in fiscal 1983, but export unit values will likely average around 10 percent below last year's sharply reduced levels. Most of gain will be wheat exports to India and feed grain shipments to Mexico. Smaller increases are anticipated for grain exports to other developing countries. Grain shipments to Western and Eastern Europe and the USSR may decline. Lower prices will likely reduce the export value of oilseeds and products. Soybean exports may reach a record volume, and meal shipments are expected to rebound strongly. Table 1--u.s. agricultural trade balance, 1975/ /83 -- Year beginning October 1 -- :Forecast Item :1975/76:1976/77:1977/78:1978/79:1979/80:1980/ /82:1982/83 Billion dollars Exports Imports Trade balance Million tons Export volume ll

3 Commodity Table 2.--u.s. agricultural exports: Value by commodity Fiscal years Forecast Billion dollars---. Grains and Feed ~) 16.7 Wheat & Flour & ~ 7.0 Rice / 1.0 Coarse Grains 1/ h65± &."? f u 7.0 Corn!:../ ,/ 6.0 (/~0&2-J (f,,'?x(_) (/,'/II),') ~ :.:_~-.Q.,,, Oilseeds and Products Soybeans Soybean Cake and Meal Soybean Oil Livestock Products Poultry & Products Dairy Products Horticultural Products Tobacco Cotton & Linters Seeds Sugar and Tropical Products : Total Table 3.--u.s. agricultural exports: Volume by commodity Fiscal years Forecast Commodity Million metric tons Wheat Wheat Flour Coarse Grains 1/ Corn 2/ Feeds,-Ingredients & Fodders Rice Soybeans Soybean Cake & Meal Soybean Oil Sunflowerseed Oil Sunflowerseed Other Oilcakes & Meals Beef, Pork & Variety Meats Poultry Meat Animal Fats Tobacco Cotton & Linters Horticultural Products Other Total / Includes corn, oats, barley, sorghum, and rye.!:_/ Excludes products.

4 U.S. cotton exports may fall about 15 percent in volume, largely because of reduced shipments to China. Tobacco exports may remain near the 1981 and 1982 volumes, and export prices will be sharply higher. Economic Outlook Prospects for 1983 reveal a sluggish worldwide economic recovery and a continuing strong dollar. Growth in the world economy will probably reach 2 percent in 1983, following a projected rate of 1 percent in 1982 and gains of 1-1/2 percent in 1980 and Weakness in consumption, investment, and governmental expenditures will restrain the growth rates of the industrialized countries next year estimated at 1.6 percent, up from 0.3 percent in Export growth will also be low, because these countries are their own best customers and their import growth will likely be sluggish. Only a!-percent expansion is expected for the European economies, 2.5 percent for Japan, perhaps none for Canada, and 2 to 2.5 percent for the United States. Monetary policies will probably remain restrictive over the year; nevertheless interest rates may drop only slightly. Because of continuing high unemployment and low wage gains, consumption growth is expected to be weaker than the rate of increase in the gross national product (GNP). The developing countries are not expected to fare very well either. Low export growth, foreign exchange shortages, and the inability to increase commercial borrowings are forcing governments to clamp down on imports and to enforce other austerity measures. Growth in the developing countries could be as low as 3 percent next year. Foreign exchange shortages and large debt payments will likely lead to another bleak year for Mexico and Brazil. Low export growth will affect these countries as well as the oil exporters and the nations of East Asia. Continuing high interest rates in international credit markets will likely limit investment expenditures in most developing countries. A similar set of ills will weaken the centrally planned economies. Low prices for oil and gold will limit the USSR's ability to finance imports. Export growth for the centrally-planned countries will be low, and large debt-service payments in Romania, Hungary, and Poland will consume most or all of their hard currency. The U.S. dollar appears to be the currency of underlying strength on the foreign exchange markets. Current indications are that the dollar will remain strong through The United States appears to have the brightest medium-term outlook of all industrialized economies, and the foreign exchange markets seem to be banking on a steady and sustained recovery. Real U.S. interest rates are not likely to decline relative to those abroad, so capital inflows should continue. To date, declining U.S. current account surpluses do not seem to have dissuaded support for the dollar. Furthermore, until the trade surpluses in Japan and Germany are based upon export growth rather than declining imports, the yen and the mark are not likely to make major gains against the dollar. 4

5 Regional Highlights Developed Countries U.S. agricultural exports to the EC may decline almost a tenth in value in fiscal 1983, mostly because of lower grain and oilseed prices. With record grain production, the EC has a large surplus, and imports are being discouraged. The economy is likely to remain weak in the months ahead, with high unemployment restraining consumer spending. Total livestock production is projected up around 1 percent in Price relationships are highly favorable to the feeding of protein meal and will likely remain so unless the EC takes measures to encourage feeding of domestic grains. Tobacco shipments are expected to total near last year's reduced level. Mild recovery is anticipated for nuts and fruits. Most animal product exports will decline. Shipments to non-ec Western Europe may drop 13 to 15 percent in value. In Spain and Portugal, harvests recovered following 2 years of drought. Therefore, the region's grain production was up over 3 million tons in Two-thirds of U.S. exports to the region are feedstuffs, and the volume of feed grain and soybean shipments will decline significantly in fiscal A 2-percent expansion is foreseen for the livestock sector, with Spain--which produces most of the region's meat--advancing around 4 percent. Spain's hog numbers may decline in 1983, while pork output could rise about 5 percent. Following an estimated?-percent drop in 1982, poultry production may increase 3 percent next year. Because of lower prices, U.S. agricultural exports to Japan may fall slightly in fiscal Corn exports may recover somewhat, but volume gains are not expected for other major products. Cotton exports will likely decline. The Japanese economy has deteriorated in recent months, and the yen has dropped 30 percent against the U.S. dollar since January. Thus, feed prices in Japan do not fully reflect the low grain and soybean prices on the world market. Following an expected 3-percent recovery in 1982, Japanese pork production may rise 2 percent in Poultry production is also expected to increase 1 to 2 percent. U.S. agricultural exports to Canada are forecast to decline for the second straight year. Canadian officials are forecasting a 4.4-percent decline in real GNP for 1982/83. The resulting decline in income will translate into reduced demand for agricultural imports. This factor is exacerbated by the continued weakness of the Canadian dollar. It has stabilized since the summer, but at an historically low level of about 81 cents. In addition, Canada has just harvested an large crop, with record production for wheat and soybeans. The good harvest could further temper demand for some U.S. agricultural products. U.S. fruit, vegetable, and nut exports to Canada exceeded $1 billion in fiscal Shipments will be about the same this year. A mild summer contributed to expanded Canadian fruit production, and the foreign exchange rate and lower incomes will limit imports. 5

6 Table 4.--U.S. agricultural exports: Value by region, fiscal years :Preliminary: Forecast Region 1/ 1980 : 1981 ~ Billion do~lars Western Europe European Community 2/ Other Western Europe Eastern Europe USSR Asia Middle East 3/ South Asia Southeast & East Asia 5/ Japan China Canada Africa North Africa 6/ Sub-Saharan Africa Latin America Mexico Central America & Caribbean South America Oceania Total Developed Countries II Less Developed Countries Centrally Planned Countries / Data are adjusted for transshipments through Canada and Western Europe. 2/ Includes Greece. 3! Turkey, Cyprus, Syria, Lebanon, Iraq, Iran, Israel, Jordan, Gaza Strip, Kuwait, Saudi Arabia, Qatar, United Arab Emirates, Yemen (Sana), Yemen (Aden), Oman, and Bahrain. 4/ Afghanistan, India, Pakistan, Nepal, Bangladesh, and Sri Lanka. 5/ Mongolia, Burma, Thailand, Vietnam, Laos, Malaysia, Singapore, Indonesia, Brunei, Philippines, Macao, Korea, Hong Kong, Taiwan, and Cambodia. 6/ Morocco, Algeria, Tunisia, Libya, and Egypt. if Western Europe, Japan, Canada, and'oceania.

7 Centrally Planned Economies U.S. agricultural exports to the USSR may decline a fourth this year because of lower prices and reduced wheat shipments. The USDA estimate of the 1982 Soviet grain crop is 180 million tons, up from 160 million estimated for last year. Grain imports during July-June are expected to decline from 46 million to 37 million tons. On the other hand, poor Soviet soybean and sunflowerseed crops necessitate expanded imports of soybeans and protein meal. Following a surge of growth between 1977 and 1981, U.S. agricultural exports to China have declined substantially. Export value is projected to drop a fourth in fiscal U.S. grain exports are expected to maintain recent high volumes, but shipments of other products will once again drop considerably. The reduction in U.S. exports reflects the success of recent Chinese policies providing extensive new incentives for expansion of domestic production of cash crops, such as cotton and oilseeds. These products were previously in short supply and were large import items. A key part of the policies is import substitution--utilizing high levels of the relatively lower priced grain im~orts to help guarantee grain supplies to producers who are expanding cash crop area. These supplies, together with other incentives and some relaxation in government controls, have led producers to expand domestic area and production of cotton, oilseeds, and sugar. China is substituting improved domestic production of these crops for the higher priced cotton and oilseed imports. U.S. agricultural exports to Eastern Europe may slip further this year. Inadequate foreign exchange will continue to hold down the region's imports. Import demand will be further restrained by a likely record grain crop in East Europe and by unchanged or reduced livestock numbers. On January 1, 1983, cattle and hog numbers may be down 1 and 4 percent, respectively. In Czechoslovakia, hog numbers have fallen approximately 8 percent over the past year in a deliberate effort to hold down feed imports. Also, the outlook is poor for resumption of Poland's large-scale poultry industry, once based on U.S. feeds. Poland was formerly the largest U.S. farm market in Eastern Europe. The limited availability of hard-currency credit in Eastern Europe is a major factor in determining U.S. farm exports. On November 1, USDA announced a blended Commodity Credit Corporation (CCC) credit to Yugoslavia worth $60 million for the purchase of cotton. Twenty percent of the amount was in interest-free GSM-5 credit under the new Blended Credit Export Enhancement Program (see next section). This credit package represents new sales to Yugoslavia as the country has been a negligible importer of U.S. cotton. Yugoslavia will likely request additional CCC credit guarantees for protein meals and wheat. The credit outlook appears slightly better for Poland in 1983 than in As part of the 1982 debt rescheduling agreement with the country's commercial creditors, Poland is to receive approximately one half the interest owed on its 1982 commercial debt in the form of short term credits. U.S. banks may provide $50 million to $70 million in new credits 7

8 to be used on U.S. exports. Polish officials have stated that a significant portion will be spent for agricultural imports. However, these credits probably will not be as large as the one-time P.L. 480 and CCC surplus sale assistance granted Poland in fiscal Agricultural exports worth approximately $60 million to $65 million were financed through the U.S. Government's food aid programs last year. The lifting of Poland's Most Favored Nation trade status rules out U.S. government credits at this time. Developing Countries U.S. agricultural exports to Mexico may reach $2 billion this year, 'up from $1.5 billion in fiscal Severe drought struck Mexico this summer, and the corn crop may be the smallest since about 5.5 million tons below the 1981 crop. The soybean crop was devastated by a hurricane. Mexico will need massive imports of corn, sorghum, and soybeans this year to maintain adequate food consumption. However, the foreign exchange crisis will largely control government imports and will tightly constrain commercial imports of agricultural products. The United States has provided Mexico $1.0 billion in CCC credit gurantees. Mexico has requested an additional $600 million under this program, but no final decision has been reached on this amendment. Exports to Other Latin American countries may decline slightly in value. Agricultural output fell in Brazil in 1982 and registered only marginal gains in most other markets. Governments are facing the conflicting pressures of rapid population growth and foreign exchange shortages. Thus, imports by most countries will remain close to 1981/82 levels. Following a 9-percent decline in value last year, U.S. agricultural exports to the developing countries of East and Southeast Asia may increase slightly in fiscal The recovery will result primarily from improved market shares for many U.S. products, especially grains and cotton. The least developed countries continue to face slow economic growth prospects, partly the result of slack demand and low prices for many of their exports. In the more industrialized countries, which take three-quarters of U.S. farm exports to the region, little economic recovery is foreseen in the months ahead because of the worldwide recession and the developed countries' barriers against imports of manufactured products. Livestock industries are expanding again through most of the region, and shipments of U.S. feedstuffs are expected to increase in fiscal Tobacco exports may jump sharply in volume, and shipments of animal products may increase. Rice exports will remain small because of good crops in South Korea and Indonesia. Record U.S. agricultural exports to South Asia are in prospect, as Indian wheat purchases are expected to push the value over $1 billion. The most significant factor affecting South Asian imports is the poor 1982 monsoon, which led to shortfalls in fall harvests of rice, coarse grains, and oilseeds, particularly in India and Bangladesh. Rice and coarse grain deficits will be compensated for by drawing down government-owned stocks and by importing additional wheat. Limited Australian wheat supplies enhance U.S. export prospects in the region. Reduced fall oilseed harvests will 8

9 expand 1982/83 import requirements for vegetable oils, primarily soybean and palm oil. Because of stiff competition from Brazilian soybean oil and Malaysian palm oil, particularly in the Indian market, U.S. soybean oil exports may increase only marginally. Reduced prospects for economic growth in South Asia will limit U.S. exports in fiscal Most countries will face a continued tight balance of payments position. Poor monsoons inevitably constrain economic growth by decreasing output in the region's dominant farm sector and by reducing hydroelectric power to the industrial sector. Large trade deficits continue to restrict the availability of foreign exchange to finance imports. Foreign exchange problems will not prevent necessary food imports but may prevent purchases for stock building or dietary improvement. P.L. 480 exports will remain a major portion of U.S. farm exports to South Asia. U.S. agricultural exports to the Middle East may increase slightly in fiscal Because of the shortfall in Australian wheat production, the U.S. share of this expanding market will likely rise. Exports of feedstuffs are also projected up this year. Continued gains are expected for fruits, nuts, and other processed foods. Poultry meat exports may exceed last year's reduced volume. U.S. credit programs may boost farm exports to North Africa to a record value in fiscal Blended credit, GSM 102, and P.L. 480 programs will create sizable gains in shipments of wheat, wheat flour, and corn to Egypt and Morocco. Vegetable oil, tallow, and pulse exports will increase a tenth or more. On the other hand, U.S. poultry meat shipments to North Africa may drop below $3 million--from a high of $71 million in fiscal U.S. agricultural exports to Sub-Saharan Africa will likely total near the 1982 value. Shipments to Nigeria may rise about 8 percent in fiscal Grain exports will increase because U.S. wheat and rice are considered basic foodstuffs. Nigeria's imports of other foodstuffs may also recover slightly. Exports to South Africa may increase in value, as larger oilseed imports offset the drop in wheat and rice shipments. Several African countries, including Zaire, Zambia, Tanzania, and Kenya, must tightly control all imports because of severe foreign exchange shortages. Prices of their major export commodities--coffee, cocoa, tea, sugar, copper, and diamonds--remain low. The P.L. 480 program will play an important role in exports to these countries and others. The Blended Credit Program On October 20, Secretary Block announced a 3-year $1.5 billion Blended Credit Export Enhancement Program. For fiscal 1983, $500 million will be provided foriegn nations to stimulate immediate export gains as well as long-term market growth. All commodities may be included and all countries are eligible except for those without most favored nation status. The blend will consist of 1) $100 million of interest free direct credits provided by the CCC under its GSM-5 program and 2) $400 million of credit guarantees issued by the CCC under its GSM-102 program. Under the latter, funds are provided by private banks at market rates of interest; the CCC guarantees repayment of 98 percent of principal and up to 8 percentage points of interest. 9

10 The effect of the blended credit program as presently administered is to reduce the cost of interest when purchasing U.S. commodities on credit, thus increasing the competitiveness of U.S. agriculture in world markets. To date, a total of $375 million has been approved for Morocco (wheat, $140 million), Yugoslavia (cotton $60 million), Egypt (wheat, corn, and vegetable oil, $110 million), the Philippines (wheat, corn and soymeal, $40 million), and Pakistan (vegetable oil and soybean meal, $25 million). Under CCC's commercial export-promotion program, repayment of the principal is typically 3 years. In addition to the $100 million of direct credits, USDA has the authority to use another $75 million, in the blended credit program or in other ways, to promote agricultural exports. The $100 million is being held in reserve for use later in fiscal In addition to the $400 million of credit guarantees being issued under the blended credit program, CCC has the authority to issue $3.4 billion in other types of credit in fiscal Agricultural Imports The value of U.S. agricultural imports is forecast at $15.3 billion last year. Coffee imports may recover to about $3 billion because of higher unit values. The import volume for cocoa is also expected to rebound. The volume of red meat imports is forecast to decline 5 percent to about 850,000 tons, but the unit value may be slightly higher. Sugar imports are expected to decline a fourth in volume because of lower demand and continued import quotas. 10

11 Table 5.--U.S. wheat and flour exports: Quantity and value, fiscal Region 1/ Fiscal 1981 : Fiscal 1982 : :Volume: Value :Volume: Value: : 1,000 Mil. 1,000 Mil. :~ dol. m.t. dol. Fiscal 1983 forecast Total U.S. exports Western Europe EC-10 43,187 7,965 45,493 7,616 World wheat trade in 1982/83 will likely be smaller than last year's record 102 million tons. Because foreign export volume is expected to be about the same, U.S. exports in fiscal 1983 could fall 1 million tons. Stronger competition is expected from Canada, Argentina, and the EC, but a poorer crop in Australia will reduce its exports significantly. With record global production surpassing consumption and foreign stocks unchanged, U.S. stocks will approach record levels. U.S. export prices are beginning the year at the lowest level since the end of fiscal , , Record wheat production in the EC will likely reduce U.S. exports. Other Western Europe: 1, , Portugal will continue to import about half of this region's total imports. Other important buyers this year could be Spain, Finland, and Norway. Large domestic crops limit the opportunities to increase U.S. exports. Eastern Europe The region's wheat crop is well above last year, and with little increase in food use expected, imports are forecast slightly below last year. The largest U.S. market should be Romania, where the milling and baking quality of the crop is poor. USSR 3, ,975 1,107 Soviet wheat production is currently forecast up 6 million tons from 1981, which suggests that USSR wheat imports could fall to 17 million tons. This situation, coupled with the efforts of several Western nations (notably Canada and France) to increase exports to the Soviets, will likely cause U.S. wheat sales to fall below last year's level. Despite low world wheat prices, no increase in Soviet wheat stocks is expected. Middle East South Asia Southeast and East Asia Japan China Africa North 2, , U.S. wheat shipments should rise because of reduced Australian deliveries. While U.S. prices are attractive, political considerations tend to cause some buyers to search for supplies from other sources. On the other hand, Saudi Arabia is buying more wheat, but less flour. 1, , One of the more visible repercussions of the poor 1982 South Asian monsoon is the expected doubling of U.S. wheat shipments to the region. Additional Indian purchases are expected because of below-target government cereal stocks and low 1982/83 cereal production resulting from the poor monsoon. Reduced fall rice harvests have also increased wheat import requirements in Bangladesh, Sri Lanka, and Pakistan. 4, , Wheat exports are expected to increase a half million tons, but because of low prices, value will rise only slightly. Reduced Australian wheat supplies may directly provide for U.S. growth in Thailand, Malaysia, and Indonesia. Taiwan, Korea, and the Philippines, whose wheat needs are supplied almost entirely by the United States, are expected to continue as strong markets. Earlier projections of wheat to the Philippines are expected to be augmented by an additional 100,000 tons as a result of the U.S. blended credit program. 3, , Wheat production rose in 1982, partly a result in of diverting riceland to wheat and increased yields. U.S. exports in fiscal 1983 are expected to remain close to last year's 3.3 million tons. 7,956 1,403 8,221 1,268 Despite a large increase in China's grain production in 1982, demand growth from the import substitution policy will keep its imports of grains high again in fiscal Total wheat imports are projected at a record 14 million tons. The U.S. share of China's wheat market likely will drop from previous years because of increased Canadian competition. 4, , North Africa is expected to import over a million tons of additional U.S. wheat and flour this year. Egypt is likely to take 3 million tons. This will include 1.5 million tons under Title I and 500,000 through blended credit. Shipments to Morocco may reach 1.7 million tons, of which 1.1 million will be under the blended credit program, 400,000 through GSM 102, and 200,000 under Title I. Sub-Saharan 2, , Wheat shipments will continue at around 2.3 million tons. Nigeria is about half of this market. Latin America 8,518 1,616 8,071 1/ For listing of countries, see table 4. 1,378 Wheat is the msin U.S. commodity exported to Latin America, accounting for nearly 25 percent of the total value. Shipments of wheat are expected to remain near last year's level of 8 million tons with the value slipping slightly below $1.3 billion. Brazil accounts for over one-third of the total. The U.S. will remain the principal supplier of wheat to the region.

12 Table 6.--u.s. coarse grain exports: Quantity and value, fiscal Region 1/ Total U.S. exports Western Europe European Community Fiscal 1981 Fiscal 1982 Volume: Value Volume: Value Fiscal 1983 forecast 1,000 Mil. 1, 000 Mil. m.t. dol. m.t. dol. 69,383 10,512 58,179 7,051 Foreign coarse grain production is projected up 2 percent in 1982/83. Larger European harvests will offset the reductions anticipated in Mexico, India, Argentina, and Australia. Foreign use is expected to recover from 1981/82's 2-percent decline. World trade is likely to decline further because of the 25-percent drop in Soviet imports snd smaller imports by Western and Eastern Europe. Exports of our major competitors may fall 15 percent because of reduced exportable supplies and weak demand. Fiscal 1983 U.S. exports are expected to increase over a tenth from last year's low volume. 9,826 1,423 7, Although production is up, little recovery in EC coarse grain use is anticipated in 1982/83. Price relationships will continue to discourage the use of imported grain in livestock feed. EC imports are forecast down 5 percent, and U.S. exports will likely decline. Other Western Europe 8,013 1,105 9,959 1,143 Grain production rebounded strongly in this region in Thus, imports will decline a tenth from record 1981/82 levels. U.S. exports are expected to fall around 1 million tons. Eastern Europe USSR 7,547 1,142 3, Eastern Europe harvested a record coarse grain crop in 1982, mostly due to excellent corn crops in the southern countries. Only negligible growth in the livestock sector is foreseen. With constraints on foreign exchange, wheat imports are favored over coarse grains. Eastern European coarse grain imports may drop 30 percent from 1981/82's 6.9 million tons, and U.S. exports will be down. 5, , With recovery in Soviet production, coarse grain imports are forecast to decline from 25 million tons to 19 million. Sales of U.S. corn totaled 3 million tons as of November 25. Middle East 1, , The region's coarse grain production is estimated down 5 percent in 1982/83. Feed use may increase 5 percent as livestock industries continue to expand. Imports may rise over a tenth to 6.8 million tons. U.S. exports are forecast up. Our market share will increase for all countries except Israel, which may again import some South African corn. Southeast and East Asia 4, , Shipments will continue to expand, aided by reduced Thai supplies and the U.S. blended credit program for the Philippines. Taiwan's feed grain imports are growing with expanding domestic meat consumption and pork exports to Japan. Exports to South Korea will at least match last year's volume. Large shipments to Singapore are expected to continue. Japan China Africa 15,582 2,437 13, ,117 2, ,708 1,578 Feed use of coarse grain may increase slightly in 1982/83. Surplus rice--up to 860,000 tons in 1982/83--is being used as livestock feed. U.S. coarse grain exports may increase marginally as the U.S. market share improves. Imports of South African corn will fall sharply, but renewed imports of Argentine sorghum are likely. 139 China's total feed grain imports are. expected to rise in 1982/83. The increase results from slow gains in domestic output, gradually rising use of coarse grains for feed, and relatively low corn prices. As of November 18, China had purchased 1.7 million tons of U.S. corn. 342 U.S. exports to Africa are expected to increase about a tenth, mainly to North Africa. Feed use of coarse grains is projected up 13 percent in North Africa, mainly because of the expansion in the poultry industry. Canada La tin America Mexico South America 1, ,775 1,662 3,937 6,530 1,011 1,137 3, , U.S. exports are expected to increase. In Eastern Canada, livestock producers are feeding domestic and U.S. corn rather than.barley and wheat from the prairie provinces. The Canadian corn crop dropped 14 percent in Mexican coarse grain production is estimated down 40 percent--6.6 million tons--in 1982/83, and carryin stocks were low. Therefore, 151 massive corn and sorghum imports are required. Major uncertainties are Mexico's foreign exchange and credit problems and the effect of 257 the economic crisis on the livestock sector. ~ For listing of countries, see table 4.

13 Table 7.--u.s. soybean exports: Quantity and value, fiscal Region 1/ Total U.S. exports Fiscal 1981 Fiscal 1982 Fiscal 1983 forecast :Volume: Value :Volume: Value 1,000 Mil. 1,000 Mil. m.t. dol. m.t. dol. 19,972 5,986 25,477 6,479 After a dynamic 28-percent increase in 1982, U.S. soybean exports in 1983 are expected to expand at a more moderate 1 to 2 percent. Ample supplies in the U.S. will keep prices about 10 percent below 1982 levels, and the export value is likely to fall below 1981 levels. European Community 8,757 2,602 11,560 2,977 The EC's Common Agricultural Policy has the effect of maintaining high grain prices relative to competing feed ingredients. During 1983, in many parts of the EC, soymeal prices will be lower than feed grain prices. Strong EC meal demand will maintain soybean imports near last year's level. Other Western Europe Eastern Europe 2, ,166 1,028 The region's soybean imports are projected up slightly in 1982/83, but the U.S. market share will likely decline from last year's unusually high level If the political climate in Poland remains unfavorable, little rebound in U.S. soybean exports can be expected. Financial constraints and inadequate crushing capacity limit soybean imports by other Eastern European countries. USSR The Soviet Union could expand its soybean imports, but it prefers to buy from South America. U.S. exports of soybeans to the USSR depend on Soviet policy decisions. Middle East Israel should remain the major market in the region, importing nearly half a million tons of soybeans. Lebanon should expand imports if the fighting subsides. Southeast and East Asia 1, , Lower prices should stimulate moderate increases in U.S. soybean exports to this region. Taiwan regularly imports over 1 million tons. Japan 3,958 1,211 4,290 1,065 U.S. exports to Japan may increase marginally, but lower prices are likely to reduce the value of these exports. China Canada Recent rapid expansion of China's vegetable oil and animal fat production will cause soybean imports to continue to decline. 80 Expanding Canadian production of soybeans may limit imports. Latin America 1, A poor crop and attractive U.S. credit should boost the Mexican soybean import volume up to the 1981 level, but lower prices may keep the value from increasing dramatically.

14 Table 8.--u.s. milled rice exports: Quantity and value, fiscal Region 1/ Fiscal 1981 Fiscal 1982 Fiscal 1983 forecast :Volume: Value :Volume: Value: ;1,000 Mil. 1,000 Mil. : m.t. dol. ~ dol. Total U.S. exports :3,172 1,538 2,911 1,149 Foreign crops are projected to be large but below the 1981/82 record. Foreign rice production, excluding India, will increase in 1982/83. Ample stocks in most consuming countries will probably keep trade volumes and prices down. Export prices are expected to fall further this year. U.S. export volume may reach only 2.7 million tons. Western Europe U.S. export volume may fall substantially from fiscal 1982's high level, but it should remain above levels of of the previous 2 years. Italy will remain the major EC market, taking mainly rough rice for milling and re-export under the EC inward-processing scheme. Shipments to other Western European countries may decline slightly, with Switzerland the most significant market outside the EC. Middle East Iraq and Saudi Arabia are again expected to be among our leading rice markets this year, with each expected to take over 200,000 tons. Total U.S. rice exports to the Middle East may not rise much; there is great uncertainty over the level of shipments to Iran, which rebounded from 35,000 tons in fiscal 1981 to over 100,000 tons in fiscal Southeast and East Asia :1, Sub-Saharan Africa u.s. export volume will likely decline further. The weather in South Korea has improved, and that country's harvest exceeded the 1980 and 1981 crops. With high stocks, Korean imports of U.S. rice may be limited to fulfilling the remainder of their earlier purchase commitment to the U.S. Because of its large rice harvest, Indonesia is not expected to import from the United States this year. 356 Financial and economic conditions and P.L. 480 allocations will continue to affect the level of u.s. rice exports. About 180,000 tons have been allocated under P.L. 480 to 11 African countries for fiscal Despite serious foreign exchange constraints due to falling petroleum exports in Nigeria, U.S. rice exports are likely to remain high; and that country may be the largest U.S. market this year. South Africa will remain an important commercial market, taking over 100,000 tons. The other African countries will take only small amounts, except for Liberia, where rice shipments may remain at 90,000 tons. Latin America U.S. exports may rise a third in fiscal The largest increase may be in sales to Peru, where P.L. 480 rice has been allocated. Exports to Mexico may pick up slightly from last year's level of 1,500 tons. Shipments to the Caribbean will be large again this year. 1/ For listing of countries, see table 4.

15 Table 9.--u.s. cotton exports, excluding linters& Quantity and value, fiscal Region 1/ ' ' Fiscal 1981 ' Fiscal Volume1 Value &Volume& Value 1 1,000 Mil. 1,000 Mil. m.t. dol. m.t. ~ Fiscal 1983 forecast Total u.s. exp~rts 1,210 2,230 1,487 2,141 Foreign mill consumption is expected to rise only marginally in 1982/83, although raw cotton production in major importing countries continues to increase. The U.S. share of world trade may remain about 33 percent, for exports by our competitors will likely fall below levels of the past 2 years. u.s. export volume is forecast to fall about 15 percent because of depressed foreign import demand and a good crop in China. Western Europe U.S. exports are expected to decline slightly from the high level of fiscal A continued strong dollar and weakness in the European textile economy are factors that may restrain U.S. export volume next year. A drop in cotton exports to the EC is expected to more than offset a small increase in exports to other Western European countries. Southeast and East Asia ' Japan U.S. exports to South Korea and Taiwan are expected to stabilize. Reduced Thai cotton production will likely cause their imports to rise sharply. Exports to Hong Kong will likely remain strong because of favorable cotton prices, abundant U.S. supplies, and modest gains in textile sales to the United States. The U.S. cotton export volume is likely to fall marginally, because stocks are at an estimated 3 months of production. Japanese cotton imports are forecast down 6 percent in 1982/83. The U.s. market share may rise because of lower supplies in other exporting countries, especially Mexico. China Canada Record 1982 Chinese production, forecast at 3.27 million tons, will lower import needs. China has bought little cotton in recent months and will reduce its total imports substantially in 1982/83. In addition to production gains, high stocks of synthetic fibers, slow expansion of textile exports, and the possibility of textile import restrictions in the developed countries continue to restrain Chinese imports. U.S. exports will drop dramatically. u.s. exports may remain at the low level of fiscal The Canadian textile industry remains depressed, and the U.S. dollar continues strong. 1/ For listing of countries, see table 4.

16 Table 10.--U.S. exports of selected agricultural products: Quantity and value, fiscal Item Fiscal 1981 Fiscal 1982 :Volume: Value :Volume: Value: 1,000 Mil. 1,000 Mil. m.t. dol. m.t. dol. Fiscal 1983 forecast Livestock and products Variety meats Beef and pork Animal fats Hides and skins, excl. furskins ~ Furskins 1/ , , , , U.S. livestock product exports may increase 8 to 9 percent in value, as prices and export volumes are projected up. The beef export volume may rise a tenth. Animal fat exports are expected to return to fiscal 1981 levels. No volume gain is anticipated for hide and skin shipments; the unit value will recover from last year's 5-percent drop. Poultry and products Poultry meat U.S. exports of poultry and poultry products may continue to decline in fiscal Following a 20-percent drop in fiscal 1982, the poultry meat export volume is forecast down around a tenth, with prices increasing slightly. Limited recovery is expected in shipments to the Middle East, but shipments to North Africa will probably decline. Subsidized exports by Brazil and the EC will undercut U.S. poultry meat. Dairy products Nonfat dry milk Butter Dairy product exports may drop a fourth in value as butter exports return to more normal levels. Protein meal 6,590 1,679 6,555 1,498 The volume of u.s. protein meal exports may increase by more than 10 percent, but sharply lower prices are likely to cause the value of these exports to stagnate. Western Europe could continue to take about two-thirds of U.S. exports of protein meal. Vegetable oils 1,577 1,039 1, Expanding supplies of sunflowerseed oil in the U.S. should help increase exports. Stagnant soybean oil exports caused by competition from Malaysia, Brazil, and Western Europe and prevailing low prices should result in smaller values. South Asia and Latin America remain the major markets. Sunflower seed 1, , Continued strong demand from Mexico should help maintain volume and value at the fiscal 1982 levels. Tobacco 252 1, ,486 Export volume may show little change. The high value of the U.S. dollar and the poor quality of the U.S. fluecured tobacco crop will limit gains. Shipments to our largest markets, the EC and Japan, are not expected to inincrease, but shipments to the developing countries may expand. Fruits, nuts, and vegetables Fresh Fruit Nuts and preparations Fresh vegetables 1, , , , U.S. exports are expected to recover slightly in Tree nut exports are expected to recover some, but prices for some fruit and vegetable items could weaken. No increase is foreseen for shipments of horticultural products to Canada, and the Far East may take more. Sugar and tropical products 1, The export value may fall below $800 million because of further declines anticipated for sugar exports. 1/ Million pieces.

17 Table 11--U.S. agricultural imports: Value by commodity, Fiscal years Commodity Competitive :Forecast 1980 : Billion dollars- Animals and products: Dairy and poultry products Meat and meat products Live animals Other animal products Vegetable products: Fruits, nuts, and vegetables Oilseeds and products Sugar and related products Tobacco, unmanufactured Wines and malt beverages Other vegetable products Total competitive Noncompetitive Bananas and plantains Coffee, green and processed Cocoa beans and products Rubber and allied gums Spices Tea Other noncompetitive products : Total noncompetitive products Total

18 Table 12.--u.s. agricultural impo_rts: Volume of selected commodities, fiscal Years Commodity Competitive Thousand metric tons- Forecast 1983 Cheese Meat and meat products Sugar, cane and beet Tobacco, unmanufactured Tomatoes, fresh Vegetable oils and waxes Wine 1/ , , , , Noncompetitive Bananas and plantains Cocoa beans Cocoa products Coffee, green Coffee, processed Rubber and allied gums Spices Tea 2, , , , , , , Total 10,733 10,790 10,459 9,845 1/ Million liters. Not included in total. 1:r U.S. GOVERNMENT PRINTING OFFICE: :ERS-1255

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