U.S. Agricultural Trade Prospects

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U.S. Agricultural Trade Prospects

• Butler/Cunningham Conference
• Montgomery, AL
• November 8, 2004
• Carol Goodloe, USDA

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(No Transcript)
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Shifting Composition of U.S. Exports
Bulk
Consumer/HVP
Intermediate
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Shifting Destination of U.S. Exports
East Asia
NAFTA
China
EU
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Whats Hot? Whats Not?
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Crops U.S. Share of World Exports
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Meats U.S. Share of World Exports
Period Broilers Beef Pork
1961-69 16.4 1.3 7.2
1970-79 12.4 1.6 9.6
1980-89 16.5 5.3 4.4
1990-99 40.0 11.6 12.5
2000-03 31.4 15.2 12.7
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Export Competition Remains Strong
2003/04
2013/14
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Where Does Alabama Fit In?
Item Share of production Share of exports
Broilers 12 9
Peanuts 11 11
Cotton 3 4
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Imports Take Off
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Reactions to Growing Imports

• Trade Adjustment Assistance for Farmers
• 2002 Trade Act
• Price income triggers, increased imports
• Shrimp, catfish qualified
• Increase in antidumping actions
• Vietnamese catfish, Asian/South American shrimp
• Among NAFTA partners wheat, hogs, cattle, corn,
  beef, rice, HFCS, tomatoes, apples
• Country of origin labeling consumer right to
  know or protectionism?

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Corn Use Is Shifting
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U.S. Agricultural TradeSurplus Narrows
Exports
Imports
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Brazils Main Claims Against U.S. Cotton Programs

• U.S. support to cotton exceeded 1992
• PFC, DP, MLA, CCP are support to cotton
• U.S. support seriously prejudiced Brazil by
  suppressing world prices
• Step 2 is illegal (domestic and export)
• Export credit guarantees are export subsidies and
  are illegal for cotton

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Subsidies Suppress Prices
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U.S. Cotton Exports GainUnfair Market Share
Foreign
U.S.
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U.S. Rebuttal

• U.S. support (rate) did not exceed 1992
• Effect of marketing loan program depends on
  expected prices at planting
• Decoupled payments dont support cotton
• Export credit programs were not export subsidies
  under URAA
• Step 2 is domestic support program
• Other factors caused world prices to fall
  Chinas stocks, exchange rates, U.S. mill use

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U.S. Textile Imports Surge
Imports
Exports
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What the Panel Ruled

• U.S. support exceeded 1992
• PFC/DPs arent green box (planting restrictions)
• Price-based support suppressed prices
• Step 2 is illegal (domestic and export)
• Export credits are export subsidies
• PFC/DPs, crop insurance no effect
• No threat, no unfair world market share

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U.S. Agricultural Trade At a Crossroads?

• Feeling the pinch from imports TAA for Farmers,
  AD actions, COOL
• WTO Dispute Settlement Panel -- Brazil challenge
  to U.S. cotton programs
• How will Doha Round play out? U.S. subsidies
  versus market access
• Next Farm Bill in 2007 trade agreements, budget
  constraints