ERS Charts of Note
Wednesday, June 13, 2018
U.S. agricultural exports are forecast to reach $142.5 billion in fiscal year 2018, primarily due to expected increases in corn and cotton exports. At the same time, U.S. agricultural imports are expected to reach $121.5 billion, driven by rising imports of animal and horticultural products. In both cases, these May forecasts represent an increase of $3 billion over the previous respective forecasts in February. The resulting U.S. agricultural trade surplus for 2018 is expected to be $21 billion. While the United States has consistently run an agricultural trade surplus, the size of the surplus has declined since 2014. This reflects steadily rising imports amid more variable export patterns. As prices for corn and soybeans, major export commodities, rose sharply in the early 2010s and later fell after 2014, the value of U.S. exports rose and fell as well. Additionally, the U.S. dollar experienced a sustained period of appreciation between late 2014 and early 2017. A stronger dollar can make imports more attractive to U.S. consumers while increasing the relative price of U.S. goods sold to foreign markets. This chart is drawn from data discussed in ERS’s Outlook for U.S. Agricultural Trade Newsletter, released May 31, 2018.
Friday, May 18, 2018
ERS estimates that U.S. agricultural exports, totaling about $135 billion in 2016, supported about 1.1 million full-time, civilian jobs. Using a model of the U.S. economy with a base year of 2013, ERS researchers found that a hypothetical 10-percent increase in foreign demand for U.S. agricultural exports would add about 41,500 jobs, or about a 0.03-percent increase in total U.S. employment. About 42 percent would be in rural areas—where employment in agriculture and food manufacturing would increase by about 18,200 jobs, while employment in other sectors would decrease by nearly 700 jobs as some labor shifts into agriculture. The net effect on employment was positive for 17 of the 20 agri-food sectors in the analysis, with the largest increases in field crops, livestock, and poultry and egg. This reflects the large initial shares of exports and employment in these sectors, relative to other agri-food sectors. Field crops alone accounted for nearly 57 percent of the increase in agri-food rural employment. This chart is based on data that appears in the April 2017 ERS report The Potential Effects of Increased Demand for U.S. Agricultural Exports on Metro and Nonmetro Employment.
Monday, May 7, 2018
Since China officially joined the World Trade Organization in December, 2001, its role within the global economy has expanded. In addition to its rising role as an agricultural exporter, China’s growing economy has created more demand for food than can be satisfied domestically. As a result, the country has taken a more global approach through trade and foreign investment. China’s outward agricultural investment coincided with several related economic trends, including rapid growth in agricultural imports and foreign exchange reserves. The first prominent official endorsements of “going global” in agriculture appeared during 2007-08, as the value of China’s agricultural imports surged during those years. After a brief dip during the global financial crisis, China’s agricultural import growth accelerated from 2009 to 2013. The growing agricultural trade deficit prompted greater concern among Chinese officials about national food security. China’s foreign exchange reserves also grew rapidly during those years, peaking at $4 trillion in 2014. These reserves provided financial resources to support outward investment. However, foreign investment flows continued to accelerate after foreign exchange reserves and agricultural imports declined during 2014-16. This chart appears in the ERS report, China's Foreign Agriculture Investments, released in April 2018.
Tuesday, May 1, 2018
Since the 1990s, productivity growth has driven the growth in global agricultural output of total crop and livestock commodities, helping to make food more abundant and cheaper worldwide. Global output growth initially slowed in the 1970s and 1980s, but then accelerated in the 1990s and 2000s. In the latest period (2001-14), global output of total crop and livestock commodities expanded at an average rate of 2.5 percent per year. In the decades prior to 1990, most output growth came about from intensification of input use, such as using more labor, capital, and material inputs per acre of agricultural land. Bringing new land into agricultural production and extending irrigation to existing agricultural land were also important sources of growth. Over the last two decades, however, the rate of growth in agricultural resources (land, labor, capital, etc.) has significantly slowed. By comparison, improvements in total factor productivity have increased, accounting for about two-thirds of global output growth during 2001-14. TFP growth reflects the use of new technology, efficiency improvement, and changes in management by agricultural producers around the world. This chart appears in the ERS topic page for International Agricultural Productivity, updated October 2017.
Wednesday, April 25, 2018
China's need for agricultural resources and technology and the country's sustained economic growth are driving rapid growth in Chinese investment in agriculture and food sectors abroad. According to Chinese investment statistics, overseas ventures in agriculture, forestry, and fisheries soared from $300 million in 2009 to $3.3 billion in 2016. But these totals understate the magnitude of Chinese agricultural-focused foreign assets because the statistics exclude the acquisition of food processing and trading companies classified in manufacturing and service sectors. An initial wave of investments during 2004-12 was focused mainly on crop production, fishing ventures, and acquiring raw materials for the Chinese market. More recently, some Chinese companies and officials have shifted the thrust of their strategy from farming overseas to acquiring established agribusiness companies based in Europe, North America, and Oceania such as ChemChina's acquisition of Syngenta and Shuanghui International's purchase of U.S.-based Smithfield Foods. This chart appears in the April 2018 Amber Waves feature, "China's Agricultural Investment Abroad Is Rising."
Friday, March 2, 2018
Sanitary and phytosanitary (SPS) regulations play an important role in ensuring food safety and protecting animal and plant resources. But such regulations are sometimes imposed improperly with countries favoring domestic producers and discriminating against imports from others. If a member country of the World Trade Organization (WTO) believes that a trade policy of another WTO member violates relevant agreements, it can initiate a dispute settlement case with the WTO’s Dispute Settlement Body. In the case of sanitary and phytosanitary (SPS) measures, a member country can inform the WTO’s SPS Committee of its concerns about a particular measure. Many of these concerns—officially called Specific Trade Concerns (STCs)—are resolved before they escalate to the level of a formal dispute. From 1995 to 2015, the most common STCs brought before the WTO SPS Committee were related to trade measures imposed because of animal disease issues. This large share reflects strong growth in meat trade along with occasional animal disease outbreaks such as foot-and-mouth disease and bovine spongiform encephalopathy that gave many countries a rationale to restrict imports. Following animal disease-related concerns, the next most common concern was pesticide tolerances and maximum residue limits. This chart appears in the February 2018 Amber Waves feature, "World Agricultural Trade Experiences Sizable Growth but Still Faces Barriers."
Tuesday, January 30, 2018
The share of U.S. agricultural imports from regions consisting primarily of developed economies remained stable from 1995 to 2015, at just over 60 percent. This contrasts with the destinations for U.S. agricultural exports, which shifted further toward developing regions. There was a compositional shift in import shares, however, from one developed region to another. In particular, a decline in the share of U.S. agricultural imports supplied by Europe was offset almost exactly by an increase in the share supplied by Canada and Mexico. Canada (a high-income economy) and Mexico (an upper-middle-income economy) are partners of the United States in the North American Free Trade Agreement (NAFTA), whose trade-liberalizing provisions were gradually applied to intraregional agricultural trade during the 1994-2007 period. With respect to other parts of the world, the import shares from fast-growing exporters in South America and the former Soviet Union declined, even as those regions increased their participation in the global agricultural market. There were modest increases in import shares from developing East Asia and South Asia, which is consistent with their growing roles in global trade. This chart appears in the ERS report The Global Landscape of Agricultural Trade, 1995-2014, released in November 2017.
Tuesday, January 16, 2018
A marked shift in the destinations for U.S. agricultural exports has accompanied the increased participation of developing economies in global agricultural trade. Elimination of agricultural trade barriers within North America boosted exports to Canada and Mexico—partners with the United States in the North American Free Trade Agreement. Rising household incomes and changing trade policies in developing East Asia (China and Southeast Asia, less Singapore) led to a near tripling in that region’s share of U.S. agricultural exports. China’s share of U.S. agricultural exports swelled from 3 percent on average during 1995-99 to 16 percent during 2011-15. A single product—soybeans—accounts for half of this increase. However, the strong growth in demand for U.S. agricultural exports in East Asia and North America has been offset by a sharp decline in the share going to Europe and high-income economies in East Asia, particularly Japan. In the European Union, a number of barriers—including concerns over genetically modified products—continue to hamper U.S. agricultural trade. This chart appears in the ERS report The Global Landscape of Agricultural Trade, 1995-2014, released in November 2017.
Wednesday, December 6, 2017
Among the product categories that make up the largest share of global trade value, movement in average import shares has varied with some products growing in significance and others declining. Over the four 5-year periods measured between 1995 and 2014, oilseed imports (bulk commodities) and their products (intermediate commodities) had the fastest growth in share of total value. In contrast, the share of trade in two bulk product categories—grains and tropical commodities (coffee, sugar, and cocoa)—declined over 1995-2014. For consumer-oriented products, the share of animal products, fruits and nuts, and vegetables in global agricultural trade declined slightly, while the share of processed food increased. Fibers, particularly cotton and others used for clothing, witnessed the steepest loss in share of total agricultural import value. Cotton consumption peaked in 2007 before falling off. China, the largest consumer of cotton fiber, reduced its imports beginning in 2012 to rely more on domestic production and carried over stocks from previous years. The growth in oilseed trade and their products has been one of the most significant developments in the global trade landscape, driven by growing imports from China and India and export growth from Southeast Asia and the Americas. This chart appears in the ERS report, The Global Landscape of Agricultural Trade, 1995-2014, released in November 2017.
Monday, October 16, 2017
During 2001-14, low-income countries accounted for only 5 percent of global agricultural production. But these countries achieved a higher rate of agricultural output growth than middle- or high-income countries, at nearly 4 percent per year during that period. Most of that development came from increasing the use of land and other inputs, rather than from raising the total productivity of those inputs. Middle-income countries, on the other hand, accounted for 40 percent of global agricultural production and achieved growth that was nearly as high (more than 3.5 percent per year), largely because of improving productivity. For high-income countries, which accounted for 25 percent of global production, agricultural growth averaged under 2 percent per year, even as land and other inputs employed in the sector fell. Improvements in productivity account for all the output growth in high-income countries. Overall, most gains in global agricultural productivity have come from middle-income countries. Strengthening the capacity of national agricultural research and extension systems in large middle-income countries (such as Brazil and India) has been a key determinant of their agricultural productivity performance. This chart appears in the ERS topic page for International Agricultural Productivity, updated October 2017.
Thursday, July 27, 2017
Agricultural goods can be broken into distinct categories based on value or level of processing. Bulk goods, like grains and oilseeds, are sold in large quantities at relatively low per unit costs. They also tend to be relatively standardized products. U.S. and foreign products in these categories are more readily substituted for each other, as changes in exchange rates alter relative prices among suppliers. Higher value goods, like meats, fruits and vegetables, and processed goods, are differentiated by factors such as brand, quality, or sanitary and phytosanitary standards. As a result, they may be less likely to be substituted across origins on the basis of price or relative price in the case of exchange rates. The U.S. trade weighted exchange rate index from the Federal Reserve Bank of Saint Louis has shown strong dollar appreciation since 2014, resulting in declining exports for both categories (bulk exports declined by 9 percent and high-value products fell by 10 percent). Typically, bulk goods would decline further than high-value goods during appreciation, but the 2012-13 U.S. drought had a significant impact on the supply of several major crops. As a result, export volume decreased, but value remained high because of higher commodity prices. By 2014, production of key bulk commodities like corn and soybeans recovered and have since continued to grow, drawing down prices. As prices have fallen and stocks have been replenished, export volume has increased, dulling the perceived impact of a rising dollar. This chart appears in the Amber Waves article, "U.S. Agricultural Trade in 2016: Major Commodities and Trends," released in May 2017.
Thursday, June 29, 2017
To meet the increasing demand for agricultural commodities, forestland is frequently converted into crop fields or pasture, especially in developing countries. For example, deforestation in Argentina, Bolivia, Brazil, and Paraguay is linked with the production of soybeans (and beef). However, the majority of soybean production in these countries is consumed elsewhere, especially in China, the rest of Asia, and the European Union. Brazil and Argentina, the largest Latin American producers, exported an average of 67 percent of their soy production outside of South America. By contrast, the United States consumed 50 percent of its production and exported 44 percent of its production outside of North America. The soy product exported varied with the country. For example, Argentina exported about 8 million tons of soybeans and 22 million tons of soybean meal; by comparison, Brazil exported about 43 million tons of soybeans and 13 million tons of soybean meal. This chart appears in the ERS report International Trade and Deforestation: Potential Policy Effects via a Global Economic Model, released April 2017.
Monday, May 15, 2017
Increasing global population and demand for food have led to rising agricultural production and demand for land for farming purposes. Expanded agricultural land has often come from tropical deforestation in developing countries that have become major exporters of commodities like beef, soybeans, and palm oil. In Brazil, for example, deforestation is linked most closely with the production of beef in the Amazon basin and the Cerrado region. Historically, cattle account for over 80 percent of deforestation in the Amazon and 88 percent in the Cerrado. At its peak in 1995, beef accounted for 3.75 million hectares of deforestation in Brazil, compared to 0.71 million hectares in 2013. Deforestation due to soybean production has generally remained low, particularly in the Amazon. Soybean production has mostly increased by expanding onto previously cleared cropland or pasture, rather than by contributing directly to deforestation. In more recent years, higher yields and policy changes have contributed to a decline in deforestation rates in Brazil. This chart appears in the ERS report International Trade and Deforestation: Potential Policy Effects via a Global Economic Model, released April 2017.
Friday, May 12, 2017
Exports play a significant role for U.S. agricultural producers. For many commodities, exports make up a sizeable share of the market for U.S. production. In the case of cotton and almonds, the United States sends more of its product abroad than is consumed domestically. Roughly 75 percent of all U.S. cotton is exported, with the majority going to countries in North and Central America like Canada, Mexico, and Nicaragua. U.S.-produced almonds, grown almost exclusively in California, represent nearly 79 percent of global supply and are naturally shipped worldwide, with 67 percent of production exported. Rice, soybeans, and wheat also depend heavily on export markets as the destination for about half of domestic supply. The wealth of cropland throughout the Midwest and other parts of America gives domestic suppliers the capacity to scale production beyond the needs of the U.S. market, allowing agriculture’s share of the U.S. economy to grow. This chart appears in the ERS publication Selected charts from Ag and Food Statistics: Charting the Essentials, 2017, released April 28, 2017.
Friday, April 21, 2017
The United States exported $135 billion worth of agricultural goods in 2016. This is down from a record of $150 billion in 2014. While the Nation exports agricultural goods to most countries worldwide, a significant share goes to major trading partners. In 2016, 61 percent of the value of agricultural exports went to Canada, China, Mexico, the European Union (EU-28), and Japan. The dominance of key markets is not a new phenomenon. In fact, these five destinations have accounted for close to 60 percent of agricultural export value since at least 2000. In the case of Canada and Mexico, proximity plays a large role in its trade relationship with the United States. Additionally, regional trade agreements increased trade between the country and its nearest neighbors. The large share of trade going to China, Japan, and the EU-28 is influenced by the sheer size of the economies involved. The EU-28, China, and Japan are the three leading economies after the United States in terms of gross domestic product, and each country accounts for a significant share of global imports of agricultural goods. This chart is drawn from data in the Foreign Agricultural Trade of the United States (FATUS) data product, updated in April 2017.
Wednesday, March 29, 2017
Errata:On April 21, 2017, the axis and text of this Chart of Note were revised so that the production units were correctly listed as million tons.
Errata: On March 29, 2017, the title of this Chart of Note was revised so that it correctly references India as the world’s largest dairy producer.
India is the largest milk-producing country in the world. The country is trailed by the United States, which is the second largest producer, in milk production by a large margin. India is unique among the major milk producers because more than half of its production comes from water buffalo, rather than cattle. Its dairy herd, also the largest in the world, has the biggest herds of both dairy cattle and water buffalo. Since 1980, production has grown consistently at an average of 4.5 percent per year. The rate of growth between water buffalo and cow’s milk has also been quite similar at 4.6 and 4.5 percent, respectively. In 2016, total production reached 154 million tons compared with 96 million produced in the United States. India surpassed the United States as the largest dairy producer in 1997, when both countries produced roughly 70 million tons, each. This chart appears in the March 2017 ERS Report “India’s Dairy Sector: Structure, Performance, and Prospects.”
Thursday, February 2, 2017
Raising productivity, rather than expanding resources, has become the major source of growth in global agriculture. Higher productivity has helped make food cheaper and more abundant, and saved resources such as forests from being converted to cropland. However, large differences remain in productivity performance between countries. For example, between 1971 and 2013, U.S. agricultural productivity growth averaged about 1.5 percent a year. Over the past few decades, China and Brazil have emerged among the world leaders in agricultural productivity growth. In Sub-Saharan Africa, on the other hand, agricultural productivity has been relatively stagnant. According to ERS research, strengthening the capacity of national agricultural research and extension systems has been a key factor in improving productivity growth. Long-term investments in agricultural research were especially important to sustaining higher growth rates in large, rapidly developing countries like Brazil and India. Under-investment in agricultural research remains an important barrier to stimulating productivity. The broader environment—such as institutions, infrastructure, and economic and trade policies—has also played an important role in raising agricultural productivity in many parts of the world. This chart appears in the topic page for International Agricultural Productivity, updated January 2017.
Wednesday, September 7, 2016
In 2016/17 (July-June marketing year), virtually all major wheat–exporting countries in the world (United States, Australia, Canada, Russia, Ukraine, and Kazakhstan) have been enjoying near perfect weather conditions, and most are likely to have record or near-record wheat output this year. Among them, Russia is expected to have by far the largest wheat harvest in its history, despite having a much smaller area devoted to wheat than it did during its historical highs in the 1960s and 70s. One big exception to this upbeat wheat production outlook is the western part of the European continent where poor weather has undermined the quality and quantity of the wheat harvest this year. Record wheat output in Russia combined with its price-competitiveness—Black Sea wheat is currently by far the cheapest in the world—is expected to propel Russia to become the world’s top wheat exporter this year at 30 million tons, unseating the European Union, which became the world leader in 2013/14. While this year’s developments are driven in part by a poor EU wheat harvest, Russia has been gaining wheat export share for several years, alongside the EU, its main competitor and the top exporter over the previous three years. The gains by Russia and the EU in the global wheat market come mainly at the expense of the United States, whose share of world wheat trade is trending lower. This chart is based on the August 2016 Wheat Outlook report, using information from the Production, Supply, and Distribution database of USDA’s Foreign Agricultural Service.
Friday, April 29, 2016
Global ending stocks of cotton are forecast to decline in the 2015/16 marketing year (August-July), down about 9 percent from last year’s record of nearly 112 million bales. Cotton stocks rose dramatically between 2010/11 and 2014/15 as relatively high prices encouraged world production and discouraged consumption. Despite this season’s anticipated decrease, ending stocks remain double the 2010/11 level. The recent global stocks buildup resulted from policies in China that insulated Chinese cotton producers from declining world prices and, at the same time, also encouraged imports. More recent policy shifts in China have discouraged production and imports in that country, beginning the process of reducing the surplus of Government-held stocks. In 2015/16, China’s stocks are expected to decrease for the first time since 2010/11. However, with stock reductions also expected in the rest of the world, China’s share of global stocks remains above 60 percent. This chart is from the April 2016 Cotton and Wool Outlook report.
Monday, April 25, 2016
Across Sub-Saharan Africa, coarse grains, including corn, sorghum and millet, are a prominent part of the diet and are supplied mostly from domestic production. Wheat and rice play a smaller role and a significant portion of those grains are imported. In 2015/16, weather was influenced by a strong El Nino in the Pacific, and rainfall patterns shifted, leaving several major Sub-Saharan production areas in drought. Coarse grain production in the region in 2015/16 is estimated to be down about 14 percent from the previous year’s record output. Production was sharply reduced, especially in the populous countries of South Africa, Ethiopia, and Sudan. Wealthier countries such as South Africa can offset much of the production drop through reduced exports, increased imports, and drawing on stocks held over from the previous harvest. Ethiopia is expected to boost imports, especially wheat. The sharp drop in production in Sudan could be mostly reflected in reduced food consumption. This chart is from the April 2016 Feed Outlook report.