Most U.S. ag export gains come from animal sector

KNOXVILLE, Tenn. – Since 1980, the value of agricultural imports has been increasing at a faster rate than the value of agricultural exports.
So it should be no surprise that, sooner or later, the value of agricultural imports would equal or exceed the value of agricultural exports. It was only a question of when.
Pushing trade. Now, the prospect of increasing agricultural exports is one of the arguments used to garner support for the inclusion of agriculture within the current trade negotiation regimen.
What can we expect in the coming years, in terms of the agriculture trade balance?
Lots of variation. For several decades, the annual value of U.S. agricultural exports has shown an upward trend that varies quite a bit from year to year.
The peaks coincide with either a short-term spurt in export volume for bulk commodities like grains and seeds and/or price spikes for the same bulk commodities.
While bulk commodities have created the variation, they have not been responsible for the upward trend.
For the last quarter century, total export tonnage of farm program crops has been flat; that is, there has been no discernible upward or downward trend in total tons exported, just variation.
With flat export volume but prices drifting lower over time, the total value of exports of farm program crops has actually dropped.
The value of agricultural imports shows much less year-to-year variation than the value of agricultural exports. The trendline is smooth and upward.
Implications. What does this mean for the future? Given its high variability, the value of exports will likely exceed imports during some years.
But if historical rates of growth are any indication of what we can expect in the future, agriculture seems destined to become primarily a net contributor to the negative side of the U.S. trade balance sheet.
Clamoring for produce. So what agricultural products have we, in the United States, imported more and more of over time?
Fruits and vegetables top the list. In 1985, fruits, vegetables, and nuts accounted for $3.5 billion or 18 percent of the value of U.S. agricultural imports. By 2003, those figures stood at $11.9 billion and a 25 percent share.
Imports of animal and animal product increased from $4.2 billion in 1985 to $8.9 billion in 2003.
A large “other” category, which does not include coffee and cocoa but does include floriculture and forestry related products, accounts for the rest of growth.
Bulk commodity drop. The composition of agricultural exports has also changed over time.
As mentioned earlier, bulk commodities have not been a growth engine for agricultural exports. Some bulk commodities, such as feed and food grains and tobacco, have experienced substantial drops in their relative standing when compared to other agricultural exports.
In 1985, feed and food grains were responsible for 36 percent of the value of U.S. exports, while in 2003 they were only responsible for 17 percent.
Tobacco’s share of export value also declined, dropping from 5 percent to 2 percent over the 1985 to 2003 period.
What’s hot? On the other hand, the export value of oilseeds and products grew sufficiently between 1985 and 2003 to maintain its 20 percent share of agricultural exports.
Cotton, too, held its own at 6 percent in both years.
The big gainer in the value of agricultural exports has been the category of animals and animal products which has grown from 14 percent to 21 percent in share of exports with the change in value increasing from 1985’s $4.1 billion to $12.4 billion in 2003.
In 1985, other agricultural exports accounted for 19 percent of the value of agricultural exports and by 2003 that share had risen to 34 percent.
In addition to poultry, the other category is dominated by value-added products such as wine, prepared and frozen vegetables, chocolate and preparations, sugar products, frozen non-citrus fruits, essential oils, and other oils and waxes.
Losing ground. When it comes to relative importance as a U.S. exporter and importer, agriculture is losing ground on both counts.
In 1985, agriculture accounted for nearly 15 percent of the value of all U.S. exports. By 2003, that share had declined to 7 percent.
For imports, the decline in share is from 6 percent to 4 percent.
(Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee.)

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