|
Food and
Agricultural Policy Research Institute presents 10-year baseline
projections |
Washington, DC
March 15, 2005
Solid prices,
stable economic growth globally and a weak dollar in
industrialized trading countries will keep U.S. agricultural
exports strong for the next 10 years, according to the
projections the Food
and Agricultural Policy Research Institute (FAPRI)
presented to Congress this week. Sanitary and phytosanitary
concerns, however, will continue to plague meat markets in
the short term and will partially offset the growth in
exports of coarse grains.
FAPRI, an economic research group with centers at
Iowa State University
and the University of
Missouri-Columbia, prepares 10-year baseline projections
intended for use by policymakers and other planners in the
agricultural sector.
Other highlights from FAPRI's 2005 agricultural outlook:
In 2004, with strong grain and livestock prices, total U.S.
agricultural exports recovered from earlier downturns and
increased by nearly 5 percent in volume and nearly 11
percent in value. This year, export volumes increase by 2.5
percent but weaker wheat and oilseed prices and low meat
exports bring the total value down by 4 percent. The value
of U.S. exports increases 20 percent by 2014 with a
long-term shift to high-value exports and a rebound in meat
exports.
The loss of major meat export destinations after a U.S. case
of bovine spongiform encephalopathy (BSE) was confirmed sent
beef exports down by 83 percent and dropped the U.S. share
of total meat trade to a record low. Despite the lost
markets, the closing of Canadian borders to meat trade has
kept U.S. meat prices high.
Because the United States took quick measures to restore
consumer confidence in the safety of U.S. beef, beef markets
are expected to reopen in 2005. FAPRI expects trade to reach
pre-crisis levels after three years. Continuing strong
growth in pork and poultry exports, coupled with the beef
market reopening, enable the United States to regain its
meat trade share at a level near that of the early 2000s.
Benefiting from trade shocks from BSE in beef and from avian
flu in the broiler industry, world pork production and trade
are projected to reach 110 and 4.24 million metric tons,
respectively, by 2014-2015. The European Union loses market
share, going from 45 percent to 33 percent, because of
higher feed costs (due to a meal and bone meal ban),
appreciating currency and strict animal welfare and
environmental regulations. All other major competing
exporters, including Canada, the United States and Brazil,
gain market share.
The depreciation of the U.S. dollar against most other
currencies in industrialized countries tapers off and ends
by 2008. Australia, Canada and the European Union recover
from weather-related stresses and become strong competitors
in crop markets. The United States loses competitiveness
relative to Latin American countries as the U.S. dollar
appreciates against most Latin American currencies. The
effects are especially acute in meat markets, since the
Latin America region has benefited from the BSE crisis in
North America.
Grain prices remain high, given strong import demand on
world markets, especially in China, where wheat imports were
7 million metric tons in 2004. Wheat prices remain above
$145 per metric ton. Corn prices steadily increase, from $95
to $114 per metric ton. The United States, Argentina and
Hungary are among the countries benefiting from strong world
market conditions and increases in grain use. The U.S. corn
market share increases from 64 to 73 percent over the
projection period.
FAPRI foresees greater concentration in soybean production.
Argentina, Brazil and the United States increase their
combined production share from 82 percent to 85 percent of
world production. World soybean production reaches 273
million metric tons by 2014-2015, an 18 percent increase
from 2004-2005.
Brazil overtakes the United States as the largest soybean
producer and exporter in the world, holding a 35 percent
share of world production and a 51 percent share of world
trade by the end of the period. U.S. production and trade
shares drop to 30 and 28 percent, respectively. China, the
world's largest importer of soybeans, expands its imports
from 35 to 47 percent of total world imports by 2014-2015,
whereas imports of the EU-15 remain stable at around 16
million metric tons.
The multi-year FAPRI projections provide a starting point
for evaluating and comparing scenarios involving
macroeconomic, policy, weather and technology variables in
world agricultural trade. More information is available at
the Iowa State (http://www.fapri.iastate.edu)
and University of Missouri (http://www.fapri.missouri.edu)
FAPRI Web sites.
|
|
|
|
