Washington - U.S. agricultural exports are forecast to grow 3.9% annually to $84.3 billion in fiscal 2007, the U.S. Agriculture Department said Monday in its annual long-term forecast.
Exports of bulk commodities such as wheat, cotton, rice and corn are forecast to grow 2.9% annually, while meat and other high-value agricultural exports are forecast to increase 4.6% each year, USDA said in the report released at its annual Agricultural Outlook Forum.
USDA cautioned that much of its long-term forecast was made last fall before the full extent of the Asian financial crisis was known. As such, the projection assumes slower economic growth and lower real exchange rates for Thailand, Indonesia, Malaysia and the Philippines, but not for South Korea or other countries either in Asia or out, USDA said.
For the four Southeast Asian countries, USDA assumed a significant slowdown in economic growth and continued exchange rate instability will curb import demand during 1998-2000.
But by 2001, "economic growth rates are assumed to return to previously projected growth paths and exchange rates to either stop depreciating or show a significantly slower loss of purchasing power," USDA said.
A deeper or longer-term disruption of Southeast Asian economies "would have much more significant effects" than the long-term forecast now projects, "as would a spread to the major East Asian markets, to China, or to economies outside of Asia," USDA said.
In December, USDA forecasts U.S. agricultural exports in fiscal 1998 at $58.5 billion, up from $57.3 billion in fiscal 1997. However, USDA is expected to lower its fiscal 1998 export forecast at the outlook conference on Monday to reflect the Asian situation.
USDA's long-term forecast projects U.S. bulk commodity exports to rise to $31.0 billion in fiscal 2007, from $23.3 billion in fiscal 1997. Over the same period, U.S. high-value farm exports are forecast to rise to $53.3 billion from $34.0 billion.
USDA forecast U.S. agricultural imports to grow 3.5% annually to $50.4 billion in fiscal 2007, from $35.8 billion in fiscal 1997. With the expected faster growth in exports, the U.S. agricultural trade surplus is projected to rise to $33.9 billion in fiscal 2007, from $21.5 billion in fiscal 1997.
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