Ag trade prospects dim

Here is the link to the USDA Agricultural Trade Outlook report of Dec. 1. It is not good news for U.S. exporters or, for that matter, U.S. importers. From the summary page:

Fiscal 2009 agricultural exports are forecast at $98.5 billion, down $14.5 billion from August and $17.0 billion below record 2008 sales. The outlook for U.S. exports has changed dramatically with the expectation of global recession in 2009. The combination of weaker global demand, falling prices, and an appreciating dollar create a very unfavorable outlook for U.S. exports.

On imports....

Fiscal 2009 agricultural imports are lowered $2 billion from August but remain a record $81 billion. This reflects the slowest growth rate in many years. Despite the stronger dollar, and some relief from high oil prices, a slumping economy with rising unemployment and falling consumer spending is slowing import growth.


On horticultural products....

Fiscal 2009 horticultural product exports are lowered $1.2 billion from the August forecast, but remain a record $21.5 billion. This downward revision is mainly due to weaker demand and a stronger dollar. If realized, the $700-million increase will represent the slowest growth rate (3 percent) in the past six years by a large margin. Sales to Canada are expected to see little, if any, decline. Sales of most products to most countries should noticeably weaken. Like other high-value products and processed foods, weaker demand should have greater impact on volume than prices. Fresh fruits and vegetable are unchanged from the August forecast of $6 billion. Approximately two-thirds of these products are shipped to Canada and Mexico and enjoy significant market presence over the competition. The processed fruit and vegetable export forecast is lowered $300 million from August to $5.6 billion. Demand for U.S. fruit juice, dried fruit, and highly processed products is expected
to decrease, particularly in Europe, Japan, and Mexico as these consumers look for better values or curtail consumption. Tree nut exports are lowered $200 million from the August forecast to $3.6 billion, primarily due to a leveling off of EU demand for almonds.


On hort imports...

The growth of imported horticulture crops and products slows in 2009 as import volume is expected to remain flat. Prices, especially for processed fruit and vegetables, nuts, wine, and essential oils, are significantly higher. As a result, consumer demand for these and other horticulture products will weaken, but not enough to overcome higher prices which will raise the import bill by at least $1 billion in 2009. The expectation for sugar and tropical products is similar. Although import prices of coffee and cocoa beans have already started to decline, they are nonetheless projected to boost overall import value by $1 billion in 2009. The demand for rubber will be adversely affected by the depressed U.S. automobile market. Import volumes of coffee and cocoa beans and confections were down by double digits in 2008 as a result of escalating prices, but are not expected to face similar declines in 2009 as their prices ease. Overall, the long-run upward trend in import values for horticultural and tropical products will continue in 2009, albeit at a slower pace.