This is the outline of a recent report from the Transportation Research Board (TRB):
“Important changes occurring in the world grain trade will affect the spatial distribution of grain flows and affect large-scale transportation projects. Most important among these are developments in ethanol and in Brazil and China. This paper develops a spatial optimization model based on a long-term competitive equilibrium to make projections in the world grain trade and shipments from individual ports to 2025. Results indicate that world trade should increase by about 47%, with the fastest growth occurring in imports to China and Pakistan and the slowest growth in Japan and the European Union, traditionally large markets. Most increases in terms of volume are expected in soybeans (49%), followed by corn (26%). Most of the U.S. export growth is expected through the barge system to U.S. ports on the Gulf of Mexico, with negligible growth through the Pacific Northwest and lakes. Although a multitude of reasons explain this expected trend, one is the growth in ethanol concentrated in the western states, which will require shifting production to meet demand. As a result, the exportable surplus from these regions will decline, and much of the growth in exports will be through the U.S. Gulf and from Argentina and Brazil, particularly northern Brazil, through spatial competition. Reflecting the impacts of growth in demand as well as international and intermodal competition, these results provide insight for transport project planners about the long-term growth in exports from particular origins and routes.”
Note this report projects out to 2025, but many factors in the interim can change these projections. But to give you an idea how the import-export applies to the U.S. one needs to only look at these numbers:
Foreign Agricultural Trade of the United States (FATUS): Monthly Summary
Latest U.S. Agricultural Trade Data
USDA has summarized the latest U.S. agricultural trade statistics in the following table, using the most recent data released by the U.S. Department of Commerce.
U.S. agricultural trade 1/, fiscal years, calendar years, year-to-date, and current month
Fiscal years 2/ Fiscal year-to-date July
2002 2003 2004 2005 2005 2006 2006
Billion dollars
Agricultural exports 3/ 53.319 56.014 62.408 62.516 (53.052-2005 to 2006 YTD) 57.995 (July #'s)5.662
Agricultural imports 4/ 40.954 45.686 52.656 57.736 (48.237-2005 to 2006 YTD) 53.556 (July #'s)5.139
Trade balance 5/ 12.365 10.328 9.752 4.780 4.815 4.439 0.523
Calendar years Calendar year-to-date July
2002 2003 2004 2005 2005 2006 2006
Billion dollars
Agricultural exports 3/ 53.143 59.392 61.426 63.182 35.691 39.966 (July #'s)5.662
Agricultural imports 4/ 41.909 47.376 53.977 59.317 34.258 37.995 5.139
Trade balance 5/ 11.234 12.016 7.449 3.865 1.433 1.971 (July #'s) 0.523
1/ USDA defines agriculture to include: live animals, meat, and products of livestock, poultry, and dairy; hides and skins (but not leather products); animal fats and greases; food and feed grains and grain products; oilseeds and oilseed products; fruits, nuts, and vegetables and products of these; juices, wine, and malt beverages (not distilled spirits); essential oils; planting seeds; raw cotton, wool, and other fibers (not manufactured products of these); unmanufactured tobacco (not manufactured tobacco products); sugar and sugar products; coffee, cocoa, tea, and products of these; rubber and allied products; and stock for nurseries and greenhouses, spices, and crude or natural drugs. Fish, shellfish, and forestry products are not included in "agriculture."
As one can see, agricultural markets are important to our economy as, basically, we have few manufactured product to sell overseas.
So how should one play this market…..SHIPPING/CARGO companies!!! The one danger here is that all major companies are foreign, so caution should always apply…even Jackie K. could identify a rich man that happened to be in the shipping business. I would avoid any of the oil tanker companies….one only has to think Exxon Valdez to appreciate the liability exposure. My favorite company is (QMAR)…they are growing their fleet by huge numbers and they have long term contracts with Bunge Corporation, one of the nation’s largest food products companies in grain, etc. Plus, as one waits for the stock to appreciate they will be getting a near 9% dividend… |
