Washington - U.S. farmers will make less money from exports in fiscal 1998 than previously estimated, due to overflowing grain and livestock supplies worldwide and to Asia's economic woes, the Agriculture Department said.
The department cut its estimate for fiscal year 1998 U.S. farm exports for the third time to $55 billion, down $1 billion from its last forecast made earlier this year. The USDA originally estimated U.S. agricultural exports would reach $58.5 billion in fiscal 1998, which ends September 30.
Exports play an important role in agriculture, accounting for more than 20 cents out of every $1 earned by farmers. U.S. farm exports peaked in 1996, when they totaled $59.8 billion.
“We had hoped that we were on a path toward more stabilized export markets,” National Corn Growers Association President and farmer Ryland Utlaeut said. “When we see export numbers roll back, it is very disheartening.”
USDA said there were several reasons for the deteriorating outlook for U.S. farm exports, including huge grain crops and livestock supplies in the United States and abroad, a condition that is increasing competition and forcing prices down. It also noted the strong dollar is raising U.S. commodity prices relative to other countries.
Finally, the department said the economic crisis in Asia, typically a strong market for U.S. agricultural exports, is also to blame for the drop in the export outlook. U.S. farm exports to Asia are now estimated at $20.3 billion, down from the previous forecast of $21.5 billion.
“Clearly, Asia has had a significant impact, no doubt about that,” USDA Undersecretary Gus Schumacher said.
Department officials said they do not expect the U.S. agricultural export forecast will drastically change in its last projection for fiscal 1998 in August.
“Any further changes would be very marginal because at this point all the...factors are largely pretty well understood,” Ernest Carter, a USDA commodity specialist, told reporters.
However, industry officials and agriculture analysts said they questioned if the impact of the Asian economic crisis is still yet to unfold.
“U.S. agriculture is collectively holding its breath right now,” said Nick Giordano, assistant vice president for foreign trade at the National Pork Producers Council.
A silver lining, however, did pop up in the USDA report, which estimated an increase in exports to North American Free Trade Agreement partners Canada and Mexico. The projection for U.S. exports to those countries rose $300 million to $13 billion.
“They're (NAFTA countries) buying more across the board,” Schumacher said.
The darkening forecast for U.S. farm exports was expected by industry groups and agriculture analysts. For the first half of the fiscal year, exports totaled $30.5 billion, lagging $766 million behind 1997's pace when sales reached $57.3 billion.
Agriculture Secretary Dan Glickman signaled a week ago the U.S. farm export forecast would be reduced. He also suggested that for fiscal year 1999, “the decline in U.S. agricultural exports could be greater.”
The USDA reported the biggest drop for fiscal 1998 exports in corn, projected to reach $4.3 billion, down $600 million from the previous estimate. The outlook for wheat exports also declined to $4.1 billion, down $300 million.
U.S. soybean exports were forecast at $6.5 billion from $6.7 billion, while beef and pork exports remained unchanged at $4.0 billion.
The estimate for fiscal 1998 soybean meal exports, however, rose to $1.8 billion, up $400 million from the last forecast. Soybean oil exports also increased to $800 million from $700 million, USDA said.
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