Payne, William F.

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South Dakota State UniversityOpen PRAIRIE: Open Public Research Access InstitutionalRepository and Information ExchangeEconomics Commentator Economics11-14-1974Outlook for U.S. Farm Exports Down After Record$21.3 Billion in Fiscal Year 1974William F. PayneSouth Dakota State UniversityFollow this and additional works at: http://openprairie.sdstate.edu/econ_commPart of the Agricultural and Resource Economics Commons, and the Regional EconomicsCommonsThis Newsletter is brought to you for free and open access by the Economics at Open PRAIRIE: Open Public Research Access Institutional Repositoryand Information Exchange. It has been accepted for inclusion in Economics Commentator by an authorized administrator of Open PRAIRIE: OpenPublic Research Access Institutional Repository and Information Exchange. For more information, please contact michael.biondo@sdstate.edu.Recommended CitationPayne, William F., "Outlook for U.S. Farm Exports Down After Record $21.3 Billion in Fiscal Year 1974" (1974). EconomicsCommentator. Paper 55.http://openprairie.sdstate.edu/econ_comm/55COOPERATIVE EXTENSION SERVICE >United States Department of Agriculture Cooperatingjajieits.•. ' I I^ Editor:" Robert J. Antonides •'Extension EconomistEconomics Department South Dakota State University Brookings 57006 (605) 688-4141No. 56 November 14, 1974OUTLOOK FOR U.S. FARM EXPORTS DOWN AFTER RECORD $21.3 BILLION IN FISCAL YEAR 1974U.S. sales of agricultural products to foreign countries reached arecord of $21.3 billion during fiscal1974 (July 1, 1973 - June 30, 1974).Wheat, feedgrains and soybeans, threecrops important to South Dakota's economy, led the parade to record agricultural exports. Wheat export volume totaled 31.2 million tons, about 1 million tons below the fiscal 1973 level.But the price per bushel doubled to over$4.00, pushing the value of wheat exports to a record $4.7 billion. Feedgrain shipments rose by about 8.5 mil-ion tons to total nearly 44 milliontons, worth $4.6 billion. Soybean exports of 519 million bushels, $3.2 billion, were about 15 million bushelsabove fiscal 1973. Significant increasesalso occurred for soybean products, cotton, tobacco, fruits and vegetables andanimals and animal products.Some of the developments that generated increased demand for our farmexports in fiscal 1973 were still beingfelt in fiscal 1974. These included:(1) unfavorable weather conditions thatsharply curtailed 1972 grain harvestsin the Soviet Union, Australia, partsof Latin America, and Africa causingthe severe drawdown in world grainstocks, (2) the sharp decline in 1972production of protein meal due to thefailure of the Peruvian anchovy catch,reduced peanut production in Asia andAfrica, and (3) a small sunflower cropin the Soviet Union.In addition, incomes in severalmajor markets continued to increase,boosting the demand for U.S. farm products. Incomes in Japan have gainedover 10 percent annually in the pastfive years and those in Western Europeby around 5 percent. The realignmentof currencies that began in 1971 stillcontributed to the competitive positionof U.S. farm products in major markets.In early fiscal 1974, the dollar depreciated an average of 18 percent whencompared with the currencies of our major export markets. But the devaluationcurrently amounts to only 13 percent because of the adverse impact of theenergy crisis on our primary markets.The four major markets for U.S.agricultural exports include Japan, WestGermany, the Netherlands, and Canada.Exports to the USSR fell from $1 billionin fiscal 1973 to $509 million in fiscal1974. Exports to the Peoples' Republicof China increased by five times to arecord $852 million. Japan surpassedthe $3 billion mark with a 49 percentincrease over the previous fiscal year.Exports to Latin America were a record$2.4 billion. Exports to developingcountries in Africa and Asia also expanded sharply.The Peoples' Republic of China wasthe top market for U.S. wheat, takingabout 3 million tons, compared witharound 600,000 tons in fiscal 1973. Arecord 1973 wheat crop, and the prospects of a favorable crop this yearcaused a decline in wheat sales to theUSSR. U.S. wheat exports to the USSRfell from 9.5 million tons in fiscal1973 to 2.7 million tons in fiscal 1974.Other important foreign markets forU.S. wheat irvcluded Italy, India,Brazil, Argentina, Colombia, Poland,Venezuela, Peru, Chile, Indonesia,Bangladesh, North Africa, Middle Eastcountries, Japan, the Republic of China(Taiwan), and Mexico. Over 90 percentof the wheat exports were commercialsales for dollars.The rise in U.S. farm exports infiscal 1974 resulted in a record $11.8billion agricultural trade balance.This occurred despite an all-time highof $9.5 billion worth of agriculturalcommodity purchases from foreign countries. The agricultural trade balancemore than offset our non-agriculturaltrade deficit of $9 billion, giving theU.S. an overall trade surplus of $2.8billion for fiscal 1974.In fiscal year 1975 (July 1, 1974- June 30, 1975) the volume of our agricultural trade is expected to declineby about one-fourth because of limitedsupplies available for export. However,higher prices for what we do exportwill likely keep the value close tolast year's level. Our wheat exportsduring fiscal year 1975 may drop tobetween 2.45 and 2.70 million tons.Most of the decline will probably occurin sales to the USSR, Peoples' Republicof China and Western Europe.Feed grain exports in fiscal year1975 will be off sharply because of thesubstantial reduction in U.S. corn output. Feed grain exports may decline toaround 21 to 27 million tons. Reducedsales to the developed nations, USSR,and the Peoples' Republic of China willaccount for most of the decline. Withhigher feed grain prices, Europe mayfeed considerably more wheat. Thegreatest uncertainty about the intensityof demand for feed grains concerns theimpact of steep price rises upon feedutilization in Europe.U.S. exports of soybeans duringfiscal year 1975 are expected to beslightly above a year earlier. Soybeanmeal exports will probably be slightlyhigher, while soybean oil shipments willdecline slightly.Our purchases of agricultural products from other countries during fiscalyear 1975 are expected to be about $10billion, resulting in an agriculturaltrade surplus of over $10 billion. However, because of the substantial worsening of the industrial trade balance,the U.S. is expected to suffer an overall trade deficit during fiscal year1975.William F. Payne, Assistant ProfessorCOOPERATIVE EXTENSION SERVICEU. S. DEPARTMENT OF AORICULTURESOUTH DAKOTA STATE UNIVERSITYBrookinRs, S. D. 57006OFFICIAL BUSINESSEconomics NewsletterPOSTAGE AND FEES PAIDU.S. DEPARTMENT OFAGRICULTUREAGR 101

Outlook for U.S. Farm Exports Down After Record $21.3 Billion in Fiscal Year 1974

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Outlook for U.S. Farm Exports Down After Record $21.3 Billion in Fiscal Year 1974

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