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Agricultural trade: Do we have a surplus or a deficit? (Monday, March 10, 2003 -- CropChoice guest commentary) --
by Daryll E. Ray
A recent press release that declared "Trade deficit sets back ag products"
caught my eye. The article said that the U.S. imported more agricultural
products than it exported. That was a surprise to me. One of the pitches
that has long been made for promoting agricultural exports is the fact that
agriculture contributes to reducing the U.S. balance of trade because the
value of agricultural exports have exceeded the value of agricultural imports.
The last time I remember looking at the numbers the agricultural trade
surplus was in excess of $10 billion, even with the low commodity prices of
the last several year. With my curiosity piqued, I began to investigate.
What I found was that the headline was an accurate reflection of a part of
a Department of Commerce report on the 2002 balance of trade. Indeed, the
Commerce Department's numbers for "foods, feeds, and beverages" shows that
imports of these items exceeded exports by $176 million. A Commerce
Department staff member told me that this was only the second time since
1980 that this measure had gone negative.
Looking at some of the items that make up this measure reveals the
following increases in imports: wine and related products rose by $663
million; bakery products by $468 million; fruits and frozen juices by $434
million; and fish and shellfish by $279 million. On the export side corn
increased by $449 million; oilseeds and food oils increased by $291
million; and wheat increased by $283 million; while bakery products
declined by $169 million; animal feeds declined by $294 million; and meat
and poultry declined by $986 million.
These numbers come from one table in the Commerce Department report that
classifies imports and exports of goods by the end-use category. In another
table imports and exports are classified by production categories. The
second table also includes non-food, but agriculturally important, items
like cotton, tobacco, hides and skins, and logs and lumber.
It was in that section of the report that I found the numbers that I am the
most familiar with. The U.S. exported $11 billion more agricultural
commodities than it imported in 2002. In 2001 the agricultural trade
surplus was $14.2 billion.
What does all this mean? These numbers are a reminder that trade is a two
way street. With the removal of trade barriers there will be winners and
losers. While the value of 2002 exports of major crops is down
substantially from the mid-90s, price increases late in the year made corn,
wheat and oilseeds export value winners in 2002 when compared to the
previous year. Vintners, bakers and fruit growers were among the
export-value losers. Next year? We will have to wait and see.
Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural
Policy, Institute of Agriculture, University of Tennessee, and is the
Director of the UT's Agricultural Policy Analysis Center. (865) 974-7407;
Fax: (865) 974-7298; dray@utk.edu; http://www.agpolicy.org.
Reproduction Permission Granted with:
1) Full attribution to Daryll E. Ray and the Agricultural Policy Analysis
Center, University of Tennessee, Knoxville, TN;
2) An email sent to hdschaffer@utk.edu indicating how often you intend on
running Dr. Ray's column and your total circulation. Also, please send one
copy of the first issue with Dr. Ray's column in it to Harwood Schaffer,
Agricultural Policy Analysis Center, 310 Morgan Hall, Knoxville, TN 37996-4500. | |
