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Trade liberalization and regulatory cooperation have facilitated growth in United States-Mexico agricultural trade beyond the NAFTA Period

Tuesday, September 13, 2016

As the United States and Mexico liberalized their bilateral trade, they continued to cooperate on sanitary, phytosanitary, and other regulatory issues affecting the agricultural sector. For example, new phytosanitary protocols (measures for the control of plant and animal diseases) enabled the export of Mexican avocados to the United States, while a coordinated campaign by all three NAFTA governments established a harmonized approach to mitigating the risks associated with bovine spongiform encephalopathy (BSE, often referred to as mad cow disease). Together, this trade liberalization and continuing regulatory cooperation provided the policy setting for an increase in U.S.-Mexico agricultural trade. Between 1993 and 2015, U.S. agricultural exports to Mexico grew from $3.6 billion to $17.7 billion, while Mexican agricultural exports to the United States increased from $2.7 billion to $21.0 billion. This chart appears in the ERS report, Opportunities for Making U.S.-Mexico Agricultural Trade More Agile released in August 2016.

Russia forecast to become the world’s top wheat exporter in 2016/17

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.

World cotton consumption expected to exceed production for second consecutive year

Wednesday, June 1, 2016

World cotton consumption is expected to grow modestly during the 2016/17 marketing year (August-July), reaching 110.8 million bales. That is similar to 2014/15 levels after dipping slightly in 2015/16. Modest growth in the global economy and relatively low cotton prices are expected to support mill use in most countries. China, India, and Pakistan are expected to lead world cotton mill use and account for a combined 62 percent of the total, similar to 2015/16. Global cotton production is forecast at 104.4 million bales in 2016/17, a modest increase following the 16-percent reduction in production in 2015/16—the result of inclement weather and pest damage in a number of producing countries. While cotton area is expected to decline, a rebound in yields would support the increase in production. With global cotton consumption forecast to exceed production for a second consecutive season, 2016/17 world ending stocks are projected to decline 6 percent from 2015/16, but at more than 96 million bales, ending stocks remain historically high and will continue to weigh on prices and production. This chart is from the May 2016 Cotton and Wool Outlook report.

Global cotton stockpiles beginning to decline

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.

Food use of grain in Sub-Saharan Africa is down this year

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.

China dominates world apple production

Tuesday, April 5, 2016

Apples are produced commercially in more than 90 countries worldwide, with annual combined global production of about 80 million metric tons. China is the world’s largest producer, accounting for nearly half of the global output and producing nearly 10 times the volume of the United States, which produces the world’s second largest apple crop. China’s large production volume is supported by the country’s vast production area. However, U.S. yields are nearly double the average achieved in China. Area expansion in China has slowed over the past decade but per-hectare yields have improved, aiding the country’s production to continue to climb. This chart is from the Fruit and Tree Nut Outlook, March 2016.

Sweetener consumption in Mexico rebounded in 2014/15

Tuesday, February 23, 2016

Domestic deliveries of sugar and high-fructose corn syrup in Mexico—a useful indicator of human consumption—rebounded in the most recent marketing year (October/September) after declining about 6.5 percent the previous year. In January 2014, Mexico imposed a tax of one peso per liter on soft drinks in an effort to curb obesity by reducing consumption, and this is believed to be at least partially behind the reduction in sweetener deliveries observed during the 2013/14 marketing year. From October 2014 through September 2015, sweetener use by Mexican food processors returned to levels equivalent to just before the tax was imposed. Food consumption patterns change slowly and reflect many factors, so time and additional research is needed to fully understand the effect of Mexico’s soft-drink tax. This chart is based on the February 2016 Sugar and Sweeteners Outlook.

U.S. production and use of high-fructose corn syrup is declining

Monday, February 1, 2016

Domestic use of high-fructose corn syrup (HFCS) declined 0.8 percent in the 2014/15 fiscal year (October 1-September 30) to 7.2 million short tons, continuing a decade-long decline. Since 2004/05, domestic use has fallen by 19.1 percent, and it is down 21.8 percent since its peak in 2001/01. Production is trending lower as well, but by a smaller magnitude: 2014/15 production was 7.1 percent below 2004/05 levels and down 10.6 percent from its peak in 1999/2000. Several factors have contributed to this decline, including high corn prices, price competition with refined sugar and other caloric sweeteners, and changing preferences of consumers and food manufacturers. As domestic deliveries have fallen, HFCS exports have become an increasingly important segment of the market. In particular, exports to Mexico increased substantially beginning in 2009/10, shortly after the integration of U.S. and Mexican sweetener markets under NAFTA. This chart is based on the January 2016 Sugar and Sweeteners Outlook.

Editor's Pick 2015, #2:<br>China's meat imports surge, driven by rising domestic demand and prices

Wednesday, December 30, 2015

As China enters a new phase of its economic development, its demand for higher-valued products like meat and dairy products is growing rapidly. China’s imports of meats during 2013-14 were more than double the volume imported during the early 2000s. Growing demand and higher prices of domestic meat products have driven the growth in China’s meat imports over the past few years. China’s meat imports have shifted from items like chicken feet and animal offal to muscle meat, as living standards rose and China opened its market to more beef and mutton imports. The U.S. is currently the top supplier of China’s poultry and pork imports. U.S. exports of meat, dairy products, and other consumer-oriented products, such as fruits, nuts, and wine to China rose from $234 million in 2000 to $3 billion in 2013, comprising nearly 12 percent of the value of total U.S. agricultural exports to China that year. The growth in China’s meat imports could mean new opportunities for U.S. exporters. This chart is based on the ERS report, China’s Growing Demand for Agricultural Imports.

U.S. soybean exports have decreased

Friday, November 20, 2015

Despite abundant supplies, U.S. soybean exports for the current marketing year (September/August) are forecast down from last year, due largely to greater competition from Brazil. Soybean production in Brazil is forecast to reach a record 100 million metric tons this year. Historically, U.S. soybean exports peak between September and December, while Brazil’s export season peaks between March and June. Brazil’s record production in 2015 is extending exports later into the calendar year, putting them into direct competition with U.S. exports. The result has been a decline in U.S. soybean export sales commitments for the current marketing year, which were down nearly 20 percent through October 2015, compared to the previous year. U.S. export sales commitments to China, the world’s largest soybean importer, were down 33 percent over the same period, while sales commitments to the rest of the world are nearly unchanged from last year. Export sales commitments are sales transactions reported by U.S. exporters, including transactions for future shipments, whereas export data only reports shipments that have already occurred. Hence, sales commitments are useful for forecasting U.S. export volumes. With a large domestic crop and decreased export sales, U.S. ending stocks are expected to grow. This chart is based on the November 2015 Oil Crops Outlook.

For berries, the price and quantity purchased is highly seasonal

Monday, November 9, 2015

The U.S. retail supply of fresh produce differs from that of manufactured foods, which are available year-round with stable prices. For many produce items, the seasonality of domestic production limits the quantity available in winter to a small fraction of that available during spring or summer, leading to higher retail prices in the off-season. For example, retail strawberry prices in late December can often be more than twice as high as prices in May. Until the early 2000s, berries were not available to most consumers outside the short domestic production seasons. Advances in trade and technology have changed that, and imports—particularly during the fall and winter months, when the supply of domestic berries is at its lowest—are leading to more consistent year-round availability and lower off-season prices. Consumers benefit through the potential for lower food expenditures and greater variety in their diets. This chart is from the ERS report, Measuring the Impacts of Off-Season Berry Imports.

U.S. fruit and vegetable trade has grown during NAFTA

Friday, February 20, 2015

U.S. fruit and vegetable trade with Canada and Mexico has increased more than 380 percent since the implementation of the North American Free Trade Agreement (NAFTA). Canada and Mexico now account for over half of all U.S. trade in fruits and vegetables, up from 37 percent in 1994. Over the same period, the share of U.S. fruit and vegetable trade with South America and Central America has remained relatively steady, while the share accounted for by Asia and the EU declined considerably. Mexico’s annual exports of fruit and vegetables to the United States (including juice) have more than tripled during the NAFTA period, approaching $9.4 billion in 2013. These exports have their roots in the development and growth over the past half century of a Mexican fruit and vegetable sector that is oriented toward the U.S. market. Annual U.S. fruit and vegetable exports to Mexico have more than tripled under NAFTA, reaching about $1.4 billion in 2013 and benefitting from the rapid expansion of Mexico’s supermarket sector, including several U.S. supermarket chains that operate there. At the same time, trade liberalization and broader use of greenhouse technology in Canada has allowed U.S. imports of fruit and vegetables from Canada to grow from $213 million in 1988 to $3.1 billion in 2013. Canada has long been a large market for the U.S. fruit and vegetable industry. During the NAFTA period, U.S. fruit and vegetable exports to Canada have grown from less than $2 billion in 1993 to $5.8 billion in 2013. The chart is from the report, NAFTA at 20: North America’s Free Trade Area and its Impact on Agriculture.

China's meat imports surge, driven by rising domestic demand and prices

Thursday, February 19, 2015

As China enters a new phase of its economic development, its demand for higher-valued products like meat and dairy products is growing rapidly. China’s imports of meats during 2013-14 were more than double the volume imported during the early 2000s. Growing demand and higher prices of domestic meat products have driven the growth in China’s meat imports over the past few years. China’s meat imports have shifted from items like chicken feet and animal offal to muscle meat, as living standards rose and China opened its market to more beef and mutton imports. The U.S. is currently the top supplier of China’s poultry and pork imports. U.S. exports of meat, dairy products, and other consumer-oriented products, such as fruits, nuts, and wine to China rose from $234 million in 2000 to $3 billion in 2013, comprising nearly 12 percent of the value of total U.S. agricultural exports to China that year. The growth in China’s meat imports could mean new opportunities for U.S. exporters. This chart is based on the ERS report, China’s Growing Demand for Agricultural Imports.

Fruit and vegetable prices respond differently to oil price increases based on shipping route and carrier

Tuesday, February 4, 2014

Fresh fruit and vegetable prices are among the most volatile U.S. retail food prices. One potential source of this volatility is the price of oil, as fresh fruits and vegetables often travel long distances from field to consumer. ERS researchers found that the impact of oil price increases on wholesale produce prices depends on both the commodity shipped and the route traveled. A hypothetical doubling of oil prices would be expected to increase wholesale prices of the 6 commodities studied—asparagus, cantaloupes, bell peppers, grapes, oranges, and tomatoes—by 3 to 27 percent depending on the origin of the commodity. Generally, wholesale prices of produce grown in the United States, Canada, and Mexico are more sensitive to changes in oil prices since produce grown in North America is shipped primarily by truck, which has relatively high fuel costs per pound of produce. Fresh fruit and vegetables from South and Central America are more likely to be shipped by plane or boat, which are less fuel-intensive modes of transportation. This chart appears in “Impact of Oil Prices on Produce Prices Depends on Route and Mode of Transportation” in ERS’s Amber Waves magazine, released February 3, 2014.

China has emerged as the world's dominant importer of soybeans, bolstering demand for U.S. exports

Tuesday, May 21, 2013

Rising incomes in China have led to a major shift in Chinese diets to include more livestock products. This dietary change, along with policy measures to spur growth in the industrialized feed industry and modern livestock production, has supported remarkable growth of soybean imports used to feed Chinese livestock while Chinese soybean production has been declining in favor of corn and rice production. The elimination of raw soybean import quotas and a surge in foreign investment in the Chinese soybean processing sector following China’s accession to the World Trade Organization (WTO) in 2001 facilitated soybean imports from the United States and other world suppliers. The bulk of soybeans produced in China are for human consumption, while soybeans from the United States and South America, China’s two primary import sources, are crushed for feed and commercial oil uses. China has more than a 60-percent share of global soybean imports. This chart is found in the June Amber Waves article, “Crop Outlook Reflects Near-Term Prices and Longer Term Market Trends.”

Corn exports by major U.S. competitors continue to surge

Thursday, January 31, 2013

Although the United States remains the world’s largest corn exporter, exports by major U.S. competitors have gained increasing shares of the world market since the mid-2000s. The decline in U.S. corn market share has corresponded with the increased use of corn to produce ethanol in the United States, while sustained, relatively strong corn prices have sparked more production in competitor countries. In 2012/13, U.S. exports are forecast to slip to 26.0 million tons, the lowest since 1971/72, because of drought damage to the U.S. corn harvest. In 2012/13, production prospects have improved in Brazil and Argentina, the largest U.S. competitors. Brazil has been exporting corn at a record pace because tight soybean supplies have allowed a shift of port capacity to corn. Argentina’s corn exports are expected to increase following the March 2013 corn harvest, and are now forecast at a record 19.5 million tons. Ukraine’s corn export prospects remain strong for 2012/13, following the sharp increase in exports in 2011/12. India’s exports, fueled largely by increased adoption of hybrid corn, are also forecast to remain strong in the current price environment. This chart is adapted from the Feed Grain Chart Gallery published with Feed Outlook: January 2013, FDS-13a.

Brazil is now the world's leading exporter of soybeans and soybean products

Wednesday, December 19, 2012

In recent years, Brazil’s production of soybeans and soybean products have risen sharply as most areas of Brazil have seen rapid increases in area planted to soybeans and rising yields. Relatively high profits for soybean producers are expected to lead to an average increase in planted area of about 2 percent per year over the next decade, with increasing soybean plantings in the Cerrado region and expansion extending into the Legal Amazon region of Brazil. Brazil’s soybeans and soybean product exports have also increased significantly and are projected to continue doing so during the next ten years, making the country the world’s leading exporter of soybeans and soybean products, ahead of the United States and Argentina. In 2011, Brazil accounted for slightly more than 32 percent of world trade in soybeans and soybean products, as income and population growth in China, other Southeast Asia, Latin America, North Africa, and Middle Eastern countries contributed to rising demand for soybean and soybean product imports. This chart is an update of one found in the Brazil topic on the ERS website.

Growing palm oil supplies temper global vegetable oil prices

Thursday, December 6, 2012

The expansion of palm oil supplies has been a key factor in meeting the rising global demand for vegetable oils, particularly by developing countries like China and India. World prices for other vegetable oils have declined in 2012 along with palm oil, but not as fast. Indonesia and Malaysia are the world’s dominant palm oil producers and exporters, with Indonesia emerging as the largest producer since about 2005, and as the largest exporter in 2011. Growth in Indonesian supplies has been fueled by the expansion of both oil palm growing area and yields. In Malaysia, production growth is constrained by an inability to further expand oil palm growing area and shortages of labor to harvest the crop. Surpluses of palm oil in both Indonesia and Malaysia have placed downward pressure on palm oil prices and generally making it the lowest cost vegetable oil on the world market. This chart appears in ERS’s November 2012 Oil Crops Outlook report.

Global rice trade forecast to be the highest on record in 2012

Monday, December 3, 2012

Global rice trade has expanded strongly since 2009 and is estimated at a record 38.2 million tons in 2012, up 6 percent from 2011 and 30 percent from 2009. On the 2012 demand side, growth in rice trade has been broad-based, with higher imports by China and the Philippines, Sub-Saharan Africa (Cote d'Ivoire, Nigeria, Senegal) and South America (Brazil, Colombia). On the 2012 supply side, increased exports by India and Vietnam have more than offset a major drop in shipments from Thailand, typically the largest exporter. India's exports surged to a record 10.0 million tons and Vietnam's exports rose to a record 7.2 million tons in 2012. Higher support prices and a record 2011/12 crop contributed to large government stocks in India that have been sold in the global market at competitive prices, a factor behind the record buying. For 2013, global trade is forecast to slip back to 36.1 million tons as India's stocks decline to a more normal level and the major 2012 importers rely more on accumulated supplies of rice. This chart appears in ERS's November 2012 Rice Outlook report.

U.S. beef imports from Mexico doubled in each of the last 2 years

Friday, November 9, 2012

Mexico has historically been a top export market for U.S. beef, but in 2003, it emerged as an important source of beef imports for the United States. In 2011, Mexico exported 59,000 metric tons of beef to the U.S., making it the fourth largest source of U.S. beef imports. The volume of boneless, fresh, or frozen meat cuts exported from Mexico to the U.S. increased by nearly 68 percent from 2010 to 2011, while the volume of exports of Mexican bone-in beef cuts increased by nearly 59 percent. The increase in exports of Mexican beef to the U.S. is partly due to an increase in the number of TIF (Tipo Inspeccion Federal) plants inspected by Mexico's Federal Government. Such plants must meet standards similar to those in the U.S. and must inspect meat that is moved across State borders in Mexico or exported to the U.S. In the last 60 years, the number of operational TIF establishments increased from 15 to 365 across 27 States in Mexico and has grown rapidly in the last few years. This chart appears in "Mexico Emerges as an Exporter of Beef to the United States" in the September 2012 issue of ERS's Amber Waves magazine.

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