Published on 04/01/96

U.S. Farm Exports Basking in Big Win

The rest of the economy may fuss about export deficits or celebrate small successes. Farm exports, though, are basking in the big win: the 36th year of surpluses and a 10 percent increase in international sales.

A U.S. Department of Agriculture estimate puts the ag export dollar value at $60 billion in 1996, more than double since 1985.

"We are the world's largest exporter of farm products," said Bill Mizelle, an economist with the University of Georgia Extension Service. "We account for 23 percent of all agricultural trade in the world."

Agriculture depends on those export dollars for 23 percent of its gross cash receipts.

"For the overall economy, exports account for 11 percent of sales," Mizelle said. "So agriculture is twice as dependent on exports as the rest of the economy."

The No. 1 buyer is Japan, which spent $10 billion on U.S. farm products last year. Sales broke records in other Asian markets, including Korea, Hong Kong, Taiwan and China.

In fact, China became agriculture's biggest growth market, Mizelle said. Sales leaped 175 percent to $2.4 billion.

"We are the most competitive nation in the world in agricultural products," Mizelle said. "We export things we're good at (like cotton, peanuts and grains). And we bring in coffee, bananas and other items.

"Many of our farm imports are either products we don't grow or they're grown when we're not in season," he said. "Trade helps improve the standard of living of the overall population. As incomes increase, people can buy even more."

The overall picture is positive. But markets for some crops fluctuate. The Economic Research Service figures Florida's fresh winter vegetable market dropped from 57 percent in 1991-92 to 36 percent a year ago.

">Imports of horticultural products from Mexico are certainly up," Mizelle said. "But it's not directly related to any increased production for exports (on Mexico's part).

"When the peso was devalued, the Mexican domestic economy collapsed, so consumer demand was reduced," he said. "So our products, which normally would have gone to them, didn't get sold. And their products, which would have been sold there, were shipped to us.

"We've had problems with spring freezes, too," he said. "So Mexico has taken advantage of our market, which added insult to injury for Florida."

Georgia agriculture depends on the export market, too. Although they don't have exact figures, Extension economists said many Georgia farm products are streaming out of the ports of Savannah and Mobile.

Extension economist Don Shurley said Georgia's giant cotton crop goes worldwide. Last year Georgia grew 2 million bales, 10 percent of the U.S. crop.

"Nationally we exported 9.4 million bales of the '94 crop,"Shurley said. "That was 48 percent of the crop. This year, USDA's latest projections are that our exports will be 7.4 million bales. That's down 2 million bales from last year. But it's still 41 percent of our total crop."

The dip in sales is attributed to a rise in world production, including in China, which lowered imports of U.S. cotton.

"Many people expect export figures for cotton to be higher than the USDA's estimate," Shurley said. "China has been a buyer in recent weeks. We've got commitments for almost 8 million bales, so it's possible we'll do better than that estimate."

George Shumaker, an Extension economist in grains, said wheat exports for the '95 crop are strong. He predicts they'll stay strong for the '96 crop. Soybean exports are strong, too, with estimates slightly up from last year.

"What's surprising is currently soybeans are worth about $1.75 a bushel more than they were the previous year," Shumaker said. "So even at higher prices, we're still competitive.

Corn exports were up "just a little bit from '94," Shumaker said."Again, we're selling more bushels at much higher prices, which is extremely positive."