An expected decline in the value of U.S. agricultural exports in fiscal 2005, along with an increase in agricultural imports, is projected to result in a U.S. agricultural trade balance of zero.
If that scenario is realized, it would be the first year without a surplus in nearly half a century, according to the February 2005 USDA Agricultural Baseline Projections to 2014 report by the Interagency Agricultural Projections Committee.
The last year with a zero balance was 1959.
The 2005 export value decline projection results from large production in 2004 and lower prices for many grains, oilseeds, and fibers, along with reduced exports of beef due to BSE (mad cow)-related bans on shipments to Japan and South Korea.
“Strong domestic economic growth and consumer demand will boost imports in 2005, particularly horticultural products, continuing to reflect U.S. consumer preferences for a wide variety of foods,” the report said.
Beyond 2005, as export demand rises due to increasing global income and as commodity prices strengthen from recent low levels, U.S. exports are projected to rise more than imports. The agricultural trade surplus is expected to increase moderately, to over $3 billion, before declining in the last few years of the projections as export growth slows and import growth continues.
Strengthening world economic growth, particularly in developing countries, is expected to provide a foundation for gains in trade and U.S. agricultural exports. However, competition in global markets remains strong, the committee noted.
Overall, the value of U.S. exports is projected to increase from $56 billion in fiscal 2005 to $78.6 billion in 2014.
High value product exports will continue to grow, the forecast said, accounting for almost two-thirds of total U.S. exports. Much of the growth in high value exports will be in animal and horticultural products. Most of the growth in the value of bulk commodity exports — grains, oilseeds, cotton, and tobacco — will reflect expected price increases and gains in volume for grains.
The forecast rise in U.S. agricultural exports to more than $76 billion in 2014 will mainly reflect gains in consumer income and demand for an increasing variety of foods, the committee noted. “Strong growth in horticultural imports is assumed to continue, contributing much of the increase in overall agricultural imports. Processed foods are expected to account for a growing share of total agricultural imports.”