USDA Raises FY 2005 Agricultural Export Forecast

USDA RAISES FY 2005 AGRICULTURAL EXPORT FORECAST BY $3 BILLION TO $59 BILLION

WASHINGTON, Feb. 24, 2005 - The U.S. Department of Agriculture today raised the fiscal year 2005 forecast of agricultural exports from $56 billion to $59 billion. This would make FY 2005 the 3rd highest export sales year ever following FY 2004 at $62.3 billion and FY 1996 at $59.8 billion.

"This new export forecast clearly demonstrates the strength of the U.S. agricultural sector," said Agriculture Secretary Mike Johanns. "We will continue to work vigorously to expand and maintain economic opportunities for our farmers and ranchers through the World Trade Organization negotiations and through other agreements, such as the Central American- Dominican Republic Free Trade Agreement."

This year, the United States is experiencing increased competition and lower prices for bulk commodities such as grains, oilseeds and cotton. Conversely, there is increased demand for some U.S. high-value products, which are bolstered by the weaker dollar. Horticultural sales are forecast at a record $14.5 billion. Broad-based gains for many fruits and vegetables as well as wines and essential oils are expected, largely due to higher prices. Pork exports are also expected to reach a record volume and value with strong demand from Japan, Mexico and Canada. Very strong gains also are expected in dairy exports, largely supported by non-fat dry milk powder.

Canada will remain the No. 1 market for U.S. agricultural products at a projected $10.2 billion, while Mexico at $8.5 billion is expected to surpass Japan ($7.7 billion) for the first time. Export sales to the European Union (EU) are projected at $7 billion and China at $4.6 billion, to account for the top five markets. U.S. agricultural exports to the Western Hemisphere should exceed those to Asia by $2.9 billion.

Agricultural imports are forecast at a record $58 billion, continuing a 35-year upward trend that has advanced at a faster pace since 2003. With exports lower in 2005, the trade surplus is expected to be about $1 billion. Demand for imports continues to rise, but most of the current increase in import value is due to higher prices. Consistent with long-term trends, rising imports of fresh and processed fruits and vegetables, wines and beer and essential oils account for more than half of the gain, but large beef and snack food purchases have also been significant in recent years.

USDA's Economic Research Service, Foreign Agricultural Service and World Agricultural Outlook Board release agricultural trade forecasts quarterly. The summary and full report of USDA's "Outlook for U.S. Agricultural Trade" may be accessed from the ERS Web site at ers.usda.gov/ or the FAS Web site at fas.usda.gov/. The next quarterly report will be issued in May 2005.

Release No. 0064.05 Contact: Ed Loyd (202) 720-4623, Harold Kanarek (202) 720-0328