Agriculture Exports to Reach New High
Tuesday September 4, 12:16 pm ET
Government Says U.S. Agriculture Exports Will Reach Record Levels in Fiscal 2007
WASHINGTON (AP) -- The government expects agricultural exports to reach record levels in the next fiscal year, as higher incomes in China and other Asian countries drive up demand for corn, beef and other commodities.
The Department of Agriculture on Friday said exports from U.S. food producers are forecast to reach $79 billion this year, surpassing the record $68.6 billion figure set in fiscal 2006.
For 2008 the agency estimates exports will reach $83.5, with broad international sales of corn, grain and livestock prices.
Food Processors like Archer Daniels Midland Co. and ConAgra should help drive U.S. corn exports to about $600 million in the next fiscal year. The nation's corn production is expected to rise 24 percent from last year to a record 13.1 billion bushels in 2007, driven by massive demand for ethanol.
Demand for soybeans and cotton is also expected to remain strong thanks to the growing purchasing power of China and other Southeast Asian countries.
"You have higher incomes in China and India and the first thing people do when they have more money is buy more food and higher quality food," said Nathan Losey, analyst with AgResource Co.
According to Losey, Asia's demand for higher-calorie foods also accounts for the recent boost in U.S. beef exports, which the government expects to rise to $400 million in 2008.
Smithfield Foods Inc. and Tyson Foods are among the U.S. meat producers who should benefit from higher sales in the international market.
Agriculture imports are also expected to grow next year, though at a slower pace than exports. The Department of Agriculture forecasts imports of $75 billion for fiscal 2008, up 6.4 percent from last year, giving the nation a $8.5 billion trade surplus. That figure would be even with the expected fiscal 2007 trade surplus.
The largest gains are expected to be in fresh fruits, coffee beans and other tropical products.
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