Grainnet

Ag Exports Stand Out As a Top Performer for U.S. Economy

This article is reprinted from the September 4 U.S. Grains Council Global Update

Agricultural exports for fiscal year 2008 were raised $5.5 billion from May’s forecast, reaching a record of $114 billion according to the USDA’s Outlook of U.S. Agricultural Trade.

Bulk commodity export volume is forecast at a record 139 million tons while fiscal year 2008 imports are forecast at $79 billion, resulting in a record high agricultural trade surplus of $35 billion.

“What we have here is testimony that free and open trade is absolutely vital to the U.S. economy and specifically to increasing the profitability of U.S. farmers across the country,” said Ken Hobbie, U.S. Grains Council president and CEO.

“The U.S. Grains Council is the export market development powerhouse for barley, corn and sorghum farmers and co-product producers. All sectors of our membership working together, not alone, is the reason the Council is able to engage in so many successful market development, demand creation and market defense efforts that have contributed to this record.”

The revised 2008 forecast for U.S. agricultural exports reveals an unprecedented increase of $31.8 billion from 2007 with all major product categories expected to reach record export values in 2008, the report stated.

Jim Broten, USGC chairman and North Dakota barley grower, said this substantial increase in agricultural exports is not just good news to farmers but to the entire U.S. population.

He is referring to the U.S. trade deficit shrinking as a result of strong exports of feed grains and other commodities.

The deficit for June fell by 4.1 percent to $56.8 billion representing the lowest level in three months.

“Trade has been the corner-post for the U.S. economy. Without trade the economy would be devastated, in my opinion.

"This trend of increasing exports will likely continue throughout the course of the year,” Broten said.

“We can see this in USDA’s forecasts of major U.S. customers such as Japan and Korea where the Council has been actively working to defend its market share in each country.”

According to USDA statistics, exports to Japan are expected to increase by $1.2 billion over the May forecast and $2.9 billion beyond 2007 numbers.

As for Korea, exports are up $1.2 billion over May and $2.4 billion over 2007. U.S. exports within the Western Hemisphere have also seen growth, up $9.3 billion from 2007, putting it at $42.6 billion.

Canada and Mexico remain the United States’ top two foreign markets as exports volumes of grains to both countries continue to grow.

Exports are expected to reach a combined $31.3 billion in 2008 which is up $800 million from May and $5.7 billion above 2007.

For more information, call 202-789-0789.