OUTLOOK FOR U.S. AGRICULTURAL EXPORTS June 12, 1996 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- OUTLOOK FOR U.S. AGRICULTURAL EXPORTS is published four times a year by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. AES-10. Subscriptions to the printed version of this report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #AES, $17/year. ERS-NASS accepts MasterCard and Visa. This report is also available electronically; for details call (202) 219-0515. ----------------------------------------------------------------------------- Contents Summary Fiscal 1996 Agricultural Export Forecast Remains at $60 Billion. . . . . . Commodity Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . Economic Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regional Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . U.S. Agricultural Export Programs. . . . . . . . . . . . . . . . . . . . . Import Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tables Table 1--U.S. agricultural trade, fiscal years 1991-96 Table 2--U.S. agricultural exports: Value by commodity, 1994-96 Table 3--U.S. agricultural exports: Volume by commodity, 1994-96 Table 4--U.S. agricultural exports: Value by region, 1994-96 Table 5--U.S. agricultural imports: Value by commodity, 1994-96 Table 6--U.S. agricultural imports: Volume by commodity, 1994-96 Table 7--U.S. agricultural imports: Value by region, 1994-96 ___________________________________________________________________________ Coordinator (ERS): Joel Greene (202) 219-0816 Commercial Agriculture Division Economic Research Service (ERS) Coordinators (FAS): Michael Dwyer (202) 720-3124 Ernest Carter (202) 720-2922 Trade and Economic Analysis Division Foreign Agricultural Service (FAS) U.S. Department of Agriculture Washington, D.C. 20250 The forecasts in the Outlook for U.S. Agricultural Exports are based on information provided by the following analysts in the Commercial Agriculture Division of the Economic Research Service and in the Commodity Divisions of the Foreign Agricultural Service. All telephone numbers are area code 202. ERS: Karen Ackerman (Export Programs, 501-8511); Jaime Castaneda (Oilseeds, 219-0826); Ronald Gustafson (Beef, 219-0848); Mildred Haley (Pork, 219-0833); David Harvey (Poultry, 219-0839); John Love (Horticultural Products, 219-1268); Stephen MacDonald (Cotton, 219-1179); Stacey Rosen (Food Aid, 501-8445); Mark Simone (Wheat, 219-0487); Carolyn Whitton (Coarse Grains and Rice, 219-0825). FAS: Peter Burr (Tobacco, Cotton, and Seeds, 720-9497); Alan Holz (Oilseeds, 720-0143); Dee Linse (Export Programs, 720-9847); Nancy Morrison (Dairy, Livestock, and Poultry, 720-8252); Debra Pumphrey (Horticultural and Tropical Products, 720-8899); Alan Riffkin (Grains and Feeds, 690-4198); Joe Somers (Horticultural and Tropical Products, 720-2974). Regional information can be provided by the following analysts in the Commercial Agriculture Division, ERS: Chris Bolling (Brazil, 219-0668); Nancy Cochrane (Central and Eastern Europe, 219-0650); Hunter Colby (China, 219-0669); Frederick Crook (Hong Kong, 219-0002); John Dyck (Japan, 219-0698); Ruth Elleson (South Korea, 219-0681); Anwarul Hoque (South Asia, 219-0665); Sophia Wu Huang (Taiwan, 219-0679); Elizabeth Jones (European Union, 219-0619); Daniel Plunkett (Mexico, 219-0670); Sharon Sheffield (Former Soviet Union, 219-0019); Jim Stout (Canada, 219-0678); Tina Valdecanas (Southeast Asia, 501-6133). ________________________________________________ Summary FISCAL 1996 AGRICULTURAL EXPORT FORECAST REMAINS AT $60 BILLION The fiscal 1996 forecast for U.S. agricultural exports is unchanged from February's $60 billion. The value of wheat, corn, cotton, and poultry exports is revised upward, but reductions for oilseeds, animal hides, and horticultural products are offsetting. Wheat prices have been higher than expected because of poor growing conditions for the 1996 U.S. crop. Strong import demand has not only raised corn export volume, but raised expected prices. The value of soybean and product exports is projected lower as soybean prices decline because of increased foreign exports and weaker demand for U.S. soybean products. Total export volume is lowered slightly to 160.4 million tons. Major country changes include a $600 million increase to Mexico, reflecting improved bulk commodity sales. Exports to China and South Korea are reduced to reflect lower than anticipated shipments to date. The fiscal 1996 forecast for U.S. agricultural imports is raised $1 billion to $30.5 billion. Higher cocoa, sugar, and horticultural imports account for the increase. As a result, the U.S. agricultural trade surplus forecast is reduced $1 billion to $29.5 billion in fiscal 1996. The forecast still surpasses the previous record of $26.6 billion set in fiscal 1981. Table 1--U.S. agricultural trade, fiscal years, 1991-1996 ___________________________________________________________________________ -- Year ending September 30 -- : Fiscal : Fiscal : Fiscal : Fiscal : Fiscal : Forecast Item : 1991 : 1992 : 1993 : 1994 : 1995 : Fiscal 1996 : : : : : : Feb. : May ___________________________________________________________________________ : : -- Billion dollars -- : Exports : 37.5 42.3 42.5 43.5 54.1 60.0 60.0 : Imports : 22.6 24.3 24.5 26.4 29.5 29.5 30.5 : ___________________________________________________________________________ : Trade : balance : 14.9 18.0 18.0 17.1 24.6 30.5 29.5 : ___________________________________________________________________________ : : -- Million metric tons -- Export : volume : 129.4 143.6 146.4 126.8 169.2 161.6 160.4 : __________________________________________________________________________ This outlook reflects commodity forecasts in the May 10, 1996, World Agricultural Supply and Demand Estimates. Table 2--U.S. agricultural exports: Value by commodity, 1994-96 ___________________________________________________________________________ : : October-March : Fiscal : Fiscal 1996 Commodity :1994/95 : 1995/96: 1995 : Forecast : : : : Feb. : May ___________________________________________________________________________ : : --Billion dollars-- : Grains and feeds 1/ : 8.524 11.030 17.637 21.0 22.0 Wheat & flour : 2.541 3.446 5.201 6.7 6.9 Rice : .574 .541 1.050 1.0 1. Coarse grains 2/ : 3.371 4.909 7.411 8.7 9.5 Corn : 2.974 4.361 6.619 7.8 8.6 Feeds and fodders : 1.279 1.365 2.511 3.0 2.9 Oilseeds and products : 5.441 5.837 9.119 10.0 9.4 Soybeans : 3.261 3.965 5.274 6.3 6.1 Soybean meal : .601 .668 1.079 1.3 1.1 Soybean oil : .574 .199 .809 .5 .4 Livestock products : 3.816 4.084 7.808 8.8 8.6 Beef, pork & variety meats : 1.844 2.176 4.044 4.7 4.7 Hides & skins, incl. furs : .853 .787 1.719 1.9 1.6 Poultry & products : 1.090 1.356 2.210 2.4 2.7 Dairy products : .365 .360 .812 .9 .8 Tobacco, unmanufactured : .789 .855 1.329 1.4 1.5 Cotton & linters : 2.219 2.313 3.496 2.7 3.0 Seeds : .455 .460 .680 .7 .7 Horticultural products : 4.679 4.643 9.110 10.0 9.4 Fruits & preparations : 1.550 1.590 3.263 3.5 3.4 Vegetables & preparations : 1.295 1.185 2.538 2.6 2.5 Tree nuts & preparations : .666 .738 1.108 1.2 1.2 Sugar, tropical, and other : .989 .951 1.940 2.1 1.9 : Total 3/ : 28.367 31.889 54.141 60.0 60.0 : Table 3--U.S. agricultural exports: Volume by commodity, 1994-96 ___________________________________________________________________________ : October-March :Fiscal : Fiscal 1996 Commodity : 1994/95 : 1995/96 : 1995 : Forecast : : : : Feb .: May ___________________________________________________________________________ : --Million metric tons-- : Wheat : 16.412 16.814 32.094 33.5 32.0 Wheat flour : .585 .218 1.184 1.0 .5 Rice : 2.129 1.524 3.767 3.2 3.0 Coarse grains 2/ : 32.147 33.663 65.670 58.7 61.4 Corn : 28.388 30.069 58.645 53.0 55.5 Feeds & fodders : 6.895 6.661 13.483 13.8 13.5 Oilseeds and products : 20.809 19.342 34.050 30.9 30.1 Soybeans : 14.871 14.563 23.584 22.0 22.0 Soybean meal : 3.382 2.952 6.094 5.3 4.9 Soybean oil : .868 .329 1.216 .8 .7 Beef, pork & variety meats : .583 .685 1.262 1.5 1.5 Poultry meat : .925 1.168 1.901 2.2 2.3 Animal fats : .861 .789 1.725 2.1 1.7 Cotton & linters : 1.363 1.286 2.068 1.7 1.7 Horticultural products 4/ : 3.643 3.569 7.001 7.5 7.2 Other : 2.754 2.943 4.999 5.5 5.5 Total agriculture : 89.106 88.662 169.204 161.6 160.4 Major bulk products 5/ : 66.922 67.850 127.183 119.1 120.1 : ___________________________________________________________________________ 1/ Includes pulses and corn products. 2/ Includes corn, barley, sorghum, oats, and rye. 3/ Totals might not add due to rounding. 4/ Products measured in liters not included. 5/ Includes wheat, rice, coarse grains, soybeans, and cotton. Table 4--U.S. agricultural exports: Value by region, 1994-96 1/ ___________________________________________________________________________ : October-March : Fiscal : Fiscal 1996 Region : 1994/95 : 1995/96 : 1995 : Forecast : : : : Feb. : May ___________________________________________________________________________ : : --Billion dollars-- : Western Europe : 5.199 5.823 8.781 9.4 9.4 European Union 2/ : 5.006 5.621 8.416 9.0 9.0 Other Western Europe : .193 .202 .365 .4 .4 : Central and Eastern Europe : .201 .215 .306 .3 .3 : Former Soviet Union : .576 .913 1.158 1.5 1.6 Russia : .460 .646 .911 1.3 1.3 : Asia : 11.988 13.848 23.980 27.7 27.6 Japan : 5.028 5.988 10.450 11.7 12.0 China : 1.278 1.204 2.412 2.9 2.5 Other East Asia : 3.740 4.155 7.560 9.0 8.3 Taiwan : 1.273 1.437 2.552 2.8 2.8 South Korea : 1.729 1.958 3.575 4.6 4.0 Hong Kong : .734 .759 1.425 1.6 1.5 Southeast Asia : 1.370 2.038 2.582 3.0 3.8 Philippines : .319 .450 .675 .8 .9 South Asia : .572 .463 .976 1.1 1.0 Pakistan : .286 .290 .341 .5 .4 : Middle East : 1.324 1.463 2.426 2.7 2.7 Israel : .239 .330 .462 .5 .6 Saudi Arabia : .263 .330 .486 .5 .6 : Africa : 1.571 1.745 2.988 3.2 3.2 North Africa : 1.161 1.251 2.111 2.2 2.3 Egypt : .740 .822 1.378 1.4 1.4 Algeria : .255 .194 .461 .5 .4 Sub-Saharan Africa : .410 .494 .877 1.0 1.0 : Latin America : 4.280 4.799 8.103 8.5 8.9 Mexico : 1.961 2.326 3.699 3.8 4.4 Other Latin America : 2.319 2.311 4.404 4.7 4.5 Brazil : .466 .271 .638 .6 .4 Venezuela : .238 .216 .496 .5 .4 : Canada : 2.896 2.861 5.836 6.1 5.9 : Oceania : .332 .223 .562 .6 .4 : Total : 28.367 31.889 54.141 60.0 60.0 : Developed countries : 13.695 15.224 26.092 28.3 28.3 Developing countries : 12.617 14.333 24.173 27.0 27.3 Other countries : 2.055 2.332 3.876 4.7 4.4 : 1/ Country totals are adjusted for transshipments through Canada. 2/ Austria, Finland, and Sweden are included in the European Union. Table 5--U.S. agricultural imports: Value by commodity, 1994-96 ___________________________________________________________________________ : October-March : Fiscal : Fiscal 1996 Commodity :1994/95 : 1995/96 : 1995 : Forecast : : : :Feb. :May ___________________________________________________________________________ : : --Billion dollars-- : Animals and products : 2.957 2.890 5.926 5.4 5.4 Live animals : .825 .794 1.655 1.4 1.4 Red meats : 1.198 1.090 2.332 2.1 2.1 Dairy products : .493 .554 1.046 1.0 1.0 : Horticultural products : 5.066 5.476 9.906 10.1 10.5 Fruits, incl. juices : 1.658 1.783 3.366 3.5 3.7 Bananas and plantains : .543 .558 1.130 1.1 1.2 Vegetables and preps. : 1.708 1.738 3.030 3.0 3.0 Nuts and preps. : .259 .250 .496 .5 .5 Wine and malt beverages : 1.051 1.217 2.207 2.3 2.4 Nursery and cut flowers : .390 .488 .807 .8 .9 : Grains and feeds : 1.127 1.242 2.291 2.4 2.4 Grains : .322 .331 .654 .8 .7 Feeds and grain products : .805 .911 1.637 1.6 1.7 : Sugar and related products : .561 .662 1.221 1.3 1.6 Oilseeds and products : .747 1.025 1.760 2.0 2.0 Tobacco, unmanufactured : .265 .345 .572 .7 .7 Coffee, incl. products : 1.850 1.547 3.363 3.0 2.9 Cocoa, incl. products : .566 .738 1.089 1.1 1.4 Rubber and allied gums : .679 .743 1.589 1.6 1.6 Other products : .927 1.026 1.813 1.9 2.0 : Total : 14.856 15.694 29.530 29.5 30.5 : Table 6--U.S. agricultural imports: Volume by commodity, 1994-96 ___________________________________________________________________________ : October-March : Fiscal : Fiscal 1996 Commodity : 1994/95 : 1995/96 : 1995 : Forecast : : : : Feb : May ___________________________________________________________________________ : : --Million metric tons-- : Red meats : .528 .490 1.054 1.0 1.0 Cheese and casein : .120 .117 .244 .2 .2 Horticultural products : 5.179 5.651 9.689 10.0 10.7 Fruits and preps. : 3.279 3.253 6.350 6.5 6.5 Bananas and plantains : 1.922 1.933 3.878 4.0 4.0 Vegetables and preps. : 1.800 2.299 3.150 3.3 4.0 Nuts and preps. : .100 .099 .189 .2 .2 Wine and malt beverages 1/ : 7.044 7.806 15.523 16.0 17.0 Fruit juices 1/ : 13.591 10.430 24.192 23.0 21.0 Grains and feeds : 3.796 3.234 7.415 6.7 6.6 Grains : 2.496 1.906 5.750 4.1 4.0 Feed and grain products : 1.300 1.328 2.524 2.6 2.6 Sugar, cane or beet 2/ : .718 .880 1.541 2.0 2.4 Oilseeds and products : 1.638 1.753 3.107 3.3 3.2 Tobacco, unmanufactured : .111 .115 .216 .3 .2 Coffee, incl. products : .494 .598 .935 1.1 1.1 Cocoa, incl. products : .320 .453 .614 .7 .9 Rubber and allied gums : .514 .520 1.043 1.0 1.0 1/ Million hectoliters. Not included in horticultural totals. 2/ Imports for consumption, product weight. Table 7--U.S. agricultural imports: Value by region, 1994-96 ___________________________________________________________________________ : October-March : Fiscal : Fiscal 1996 Region : 1994/95 : 1995/96 : 1995 : Forecast : : : : Feb. : May ___________________________________________________________________________ : : --Billion dollars-- : Western Europe : 2.891 3.148 5.885 5.9 6.2 European Union 1/ : 2.811 3.058 5.713 5.7 6.0 Other Western Europe : .080 .090 .172 .2 .2 : Central and Eastern Europe : .116 .136 .202 .2 .2 : Former Soviet Union : .021 .023 .053 2/ 2 / : Asia : 2.395 2.601 5.068 4.9 5.2 Japan : .154 .147 .305 .3 .3 China : .234 .250 .482 .5 .5 Other East Asia : .143 .152 .305 .3 .3 Southeast Asia : 1.624 1.790 3.491 3.3 3.6 South Asia : .239 .261 .485 .5 .5 : Middle East : .164 .257 .318 .3 .4 : Africa : .325 .431 .698 .7 .9 North Africa : .029 .032 .069 .1 .1 Sub-Saharan Africa : .296 .399 .629 .6 .8 : Latin America : 5.515 5.282 10.197 9.9 10.0 Mexico : 2.103 1.933 3.716 3.7 3.6 Other Latin America : 3.412 3.349 6.481 6.2 6.4 Brazil : .774 .549 1.323 1.4 1.2 Chile : .344 .375 .537 .5 .6 : Canada : 2.604 3.075 5.359 5.9 6.1 : Oceania : .824 .741 1.750 1.7 1.5 : Total : 14.856 15.694 29.530 29.5 30.5 : Developed countries : 6.512 7.160 13.340 13.8 14.1 Developing countries : 8.020 8.141 15.542 15.0 15.7 Other countries : .324 .394 .647 .7 .7 : 1/ Austria, Finland, and Sweden are included in the European Union. 2/ Less than $50 million. Commodity Highlights The forecast for fiscal 1996 exports of U.S. wheat and flour is increased $200 million from USDA's February forecast to $6.9 billion, despite a 2 million-ton downward revision in export volume to 32.5 million tons. The outlook for the 1996 U.S. crop has deteriorated in recent months, sending U.S. export prices higher than previously anticipated. Although the European Union (EU-15) continues to restrict exports in response to high internal prices, imposing an export tax on soft wheat since December, most of the other major exporters are expected to have larger 1996 crops. Also, current prospects point to larger 1996 crops in several major importers such as North Africa and Brazil. High prices for wheat flour has dramatically slowed demand for U.S. flour exports. The forecast for U.S. coarse grain exports in fiscal 1996 is raised 2.7 million tons and $800 million from the February forecast to 61.4 million tons valued at $9.5 billion. The export forecast for corn is raised 2.5 million tons and $800 million to 55.5 million tons valued at $8.6 billion. Despite very high prices, global demand for U.S. corn remains strong, boosting both the quantity and value of U.S. exports. U.S. sales to Mexico are up sharply in response to drought-induced shortages. With China's continued absence from export markets, U.S. corn shipments to Japan and other Asian Pacific Rim markets continue strong. U.S. coarse grain exports to the EU-15 remain strong as European buyers continue to import less expensive alternatives to high-priced domestic feed grains. The forecast for fiscal 1996 exports of U.S. rice is increased $100 million from USDA's February forecast to $1.1 billion, despite a 200,000-ton downward revision in export volume to 3 million tons. The downward revision in export volume is due to improved prospects for Asian rice production, and the reduction of rice shipments to Brazil. The average export price is revised upward as the mix in U.S. rice exports shifts further to the higher valued japonica variety produced in California. The forecast for fiscal 1996 exports of U.S. oilseeds and products is lowered 800,000 tons and $600 million from the February forecast to 30.1 million tons valued at $9.4 billion. Soybeans and soybean products account for most of the decline in both volume and value. Although soybean export volume is expected to remain unchanged at 22 million tons, the export value is reduced $200 million to $6.1 billion due to a downward revision in average prices. Prices are lowered because of reduced global demand for U.S. soybean meal, and lower meal demand in the United States. The forecast for U.S. soybean meal exports is reduced 400,000 tons and $200 million from February's forecast due to stronger than anticipatedforeign competition. South American suppliers are crushing larger volumes on a seasonal basis than was previously expected. The forecast for U.S. soybean oil exports is reduced 100,000 tons and $100 million from the February forecast. Exports to China are down sharply from last year largely because of higher Chinese oilseed production, larger carry-in stocks following last year's record imports, and increased purchases of soybean oil from Brazil. The volume forecast for fiscal 1996 cotton exports remains unchanged at 1.7 million tons, however export value is raised $300 million from the February forecast to $3 billion. This upward revision in export value reflects higher than previously expected prices following the continued tightening of domestic supplies. Foreign demand remains strong, particularly from China and to a lesser extent the EU-15 and Mexico. The fiscal 1996 forecast for U.S. exports of unmanufactured tobacco is increased $100 million from the February estimate to $1.5 billion. This upward revision is largely due to stronger than previously anticipated demand from the EU-15, one of the traditional export markets for U.S. leaf tobacco. The fiscal 1996 forecast for U.S. exports of planting seeds remains unchanged at $700 million. The forecast for fiscal 1996 exports of U.S. livestock, dairy, and poultry products remains unchanged from the February forecast at a record $12.1 billion. Downward revisions in the hides and skins and dairy product exports are generally offset by an upward revision in U.S. poultry and product exports. Export prices for hides and skins are forecast to fall further than previously expected, bringing down the value of exports. Despite little change in export volume, U.S. exports of hides and skins are expected to drop $300 million to $1.6 billion. The dairy export forecast is lowered $100 million to $800 million in view of the slower than expected pace of sales. The fiscal 1996 forecast for poultry and product exports, however, is raised $300 million to a record $2.7 billion. Record sales of poultry meat, now forecast at 2.3 million tons, are expected this year given that the outlook for sales to Russia remains strong. The forecast for fiscal 1996 exports of U.S. horticultural products is lowered $600 million from the February forecast but remains a record $9.4 billion. The forecasts for both fruit and vegetable exports are lowered $100 million to $3.4 billion and $2.5 billion, respectively. The forecast for tree nut exports remains unchanged at $1.2 billion. The slower than previously expected pace of sales to Canada, Japan, and Mexico accounts for much of the downward revision in total U.S. horticultural exports. Much of the downward revision in sales to Canada is due lower prices that have reduced the value of fresh vegetable exports. Sales prices for broccoli and celery are down from last year's level, and lettuce exports have also fallen. In the case of Japan, U.S. exports of many fruits, vegetables, and other horticultural products have not kept pace with earlier expectations. The value of U.S. horticultural shipments to Mexico from January through March 1996 has risen compared with the same period in 1995, indicating a rebound in U.S. sales after the peso devaluation sharply reduced U.S. exports in 1995. Economic Outlook World real gross domestic product (GDP) is projected at 2.5 percent compared with 2.7 percent in February because of reduced growth expectations in the United States and the European Union, but growth remains stronger than the revised 1995 estimate of 2.4 percent. GDP in Asia, excluding Japan, is revised upward to 7 percent, and remains at 2.7 percent for Latin America. Growth prospects in the former Soviet Union have weakened to less than 1 percent. During the first quarter of 1996, the dollar appreciated about 3 percent vis-a-vis the yen and mark. The dollar is expected to continue to slowly appreciate in 1996 as the U.S. trade balance improves and interest rate differentials favor the dollar. Regional Highlights U.S. agricultural exports to Mexico are forecast at a record $4.4 billion, $600 million higher than in February 1996. Fiscal 1996 exports are expected to surpass the 1994 record of $4.1 billion. Exports during October 1995-March 1996 totaled $2.3 billion, 19 percent higher than a year earlier. Exports to Mexico are rising faster than earlier anticipated because of strong corn, wheat, soybean, and cotton shipments. Severe drought conditions and higher prices are boosting exports to Mexico. Supported by GSM-102 credit guarantees, corn exports have risen 47 percent to 2.7 million tons through March 1996, wheat rose 56 percent to 726,000 tons, and soybeans rose 69 percent to 1.1 million tons. High-value product (HVP) exports remain weak compared with record-setting 1994, however, data during January-March 1996 indicates that U.S. meat, dairy, and horticultural product exports will surpass 1995 levels. Exports to Southeast Asia are projected to rise to a record $3.8 billion because of strong sales of wheat, corn, soybeans, and cotton. Higher bulk prices have boosted the year-to-date value to more than $2 billion, 49 percent higher than a year earlier. Sales are particularly strong to Malaysia, Indonesia, and the Philippines. The forecast for Japan is increased $300 million to a record $12 billion because of higher bulk prices and increased demand for corn. U.S. exports through March rose 19 percent to $6 billion. Red meat exports remain well ahead of 1995, but fruit and vegetable shipments have slowed and could fall below 1995 levels. Export gains are offset by lower projected sales to South Korea, China, and Canada. The forecast for South Korea is reduced $600 million to $4 billion. Exports to South Korea rose 13 percent during the first 6 months of fiscal 1996, but the pace of sale has been slower than earlier anticipated. Although beef exports are ahead of last year, total animal product exports through March 1996 fell because of an 18-percent decline in hide exports, and smaller decreases in fats and oils, poultry products, and other meats. The outlook for cotton shipments is also lowered. The forecast for China is reduced to $2.5 billion. Lower than expected corn and soybean oil shipments account for the downward revision. Year-to-date exports declined 5 percent to $1.2 billion. Exports to Canada are expected lower at $5.9 billion. The export forecast is decreased mainly because lower prices for selected vegetables compared with the high levels of 1995 will reduce export value. Year-to-date shipments of fresh vegetables were unchanged compared with fiscal 1995, but value was reduced 18 percent to $311 million because of lower prices. Also, exports of live animals, animal hides, and sugar products are expected lower. U.S. Agricultural Export Programs The Export Enhancement Program and the Dairy Export Incentive Program On April 1, 1996, USDA announced a 3-month continuation of the interim Export Enhancement Program (EEP) and Dairy Export Incentive Program (DEIP) allocations. EEP bonuses are available to 71 countries for 6.16 million metric tons of wheat; 49 countries for 399,525 metric tons of wheat flour; 24 countries for 650,000 metric tons of barley and malting barley; 33 countries for 112,675 metric tons of barley malt; 27 countries for 120,100 metric tons of rice; 22 countries for 170,000 metric tons of vegetable oils; 27 countries for 11,946 metric tons of frozen poultry; and 7 countries for 6,184,500 dozen eggs. No EEP sales have been announced under the April 1 allocations. DEIP program allocations are available to 97 countries for 48,000 metric tons of nonfat dry milk; 84 countries for 4,000 metric tons of whole milk powder; 99 countries for 15,345 metric tons of butterfat; and 37 countries for 1,000 metric tons of cheddar, Feta, Gouda, cream, mozzarella, and processed American cheese. Fiscal 1996 DEIP bonuses for sales of nonfat dry milk, whole milk powder, and cheese totaled $19.7 million as of May 28. The 1996 farm bill capped the fiscal 1996 EEP spending level at $350 million, but no cap was established for DEIP spending subject to GATT limits. CCC Export Credit Guarantee Programs As of May 10, fiscal 1996 export credit guarantee program (GSM-102 and GSM-103) allocations of $3.8 billion are about 10 percent higher than fiscal 1995 allocations for the same period. However, fiscal 1996 sales of $2.4 billion as of May 10 are more than 40 percent higher than sales for the same period in fiscal 1995. Importers in Mexico, the chief purchasers under the credit guarantee programs, account for almost half of program sales, and have exhausted their allocation of $1.1 billion. Market Access Program (MAP) On May 3, USDA announced $90 million in allocations under the newly-renamed Market Access Program (MAP) to 66 nonprofit commodity groups to promote a wide range of agricultural products. The fiscal 1996 funding level for the MAP, authorized in the 1996 farm bill, is $20 million less than in fiscal 1995 and less than half the fiscal 1992 level of $200 million. The MAP uses Commodity Credit Corporation (CCC) funds to help U.S. producers, exporters, and trade organizations finance cost-share promotional activities for U.S. agricultural products. Activities financed include consumer promotions, market research, technical assistance, and trade servicing. The bulk of the MAP goes to promotions of high-value and processed products such as meats, fruits and vegetables, seafood, and dairy products. Generic promotion activities predominate with about two-thirds of program expenditures, while branded product promotions account for the other third. Fifty-six percent of the funds for branded promotion--about $23 million--will go to small companies and producers in 1996, up from 42 percent in 1994. Another 20 percent of 1996 MAP funding for branded promotion will go to agricultural cooperatives. The 1996 farm bill prohibits direct MAP assistance for promotions of branded products to foreign companies for foreign-produced products, or to companies that are not recognized as small business concerns under the Small Business Act, except for cooperatives and nonprofit trade associations. MAP may not be used to promote U.S. tobacco products or mink. U.S. Food Aid Programs Public Law 480 (P.L. 480), also known as the Food for Peace program, uses appropriated funds to provide U.S. agricultural assistance to countries at different levels of economic development. The P.L. 480 program is comprised of three titles. Title I of the P.L. 480 program is administered by USDA, while Titles II and III are administered by the U.S. Agency for International Development (AID). Title I of P.L. 480 provides government-to-government sales of agricultural commodities to developing countries under long-term credit arrangements. Repayments for commodities sold under this title may be made either in U.S. dollars or in local currencies on credit terms up to 30 years. The Federal Agricultural Improvement and Reform Act of 1996 (FAIR) amended the Title I credit sales program by authorizing agreements with private entities in addition to foreign governments. It also modified repayment terms for Title I credit, including elimination of the minimum repayment period of 10 years and the reduction of the grace period from 7 to 5 years. The new provisions will be incorporated into the fiscal 1997 program. Title I appropriations may also be used to fund the Food for Progress programs in countries that have made progress toward introducing free-market principals into their economies. Title II provides for the donation of U.S. agricultural commodities by the U.S. government to meet humanitarian food needs in developing countries. Commodities may be provided to meet emergency needs under government-to-government agreements, through public and private agencies, and other multilateral organizations. Title III provides for government-to-government grants to support long-term economic development in the least developed countries. P.L. 480 appropriations (program level) for fiscal 1996 are estimated at $316.3 million for Title I, $821.1 million for Title II, and $50 million for Title III. While this represents only a 5-percent decline in value from fiscal 1995, total commodity shipments for 1996 are expected to fall to approximately 3.3 million tons, compared with 3.9 million tons in 1995. This decline reflects the steep rise in commodity prices during the last year. As of April 1, 19 countries have signed P.L. 480 Title I and Food for Progress agreements, with allocations totaling $210 million. This will provide about 856,000 tons of commodity assistance. The Food for Progress programs, signed with Albania, Georgia, Kyrgyzstan, and Tajikistan, accounted for $46 million of this total. Title I allocations totaling $25 million have been announced, but not signed, with Angola, Moldova, and Poland. Approximately 40 percent of the Title II appropriations are for Sub-Saharan Africa, with Liberia and Rwanda expected to receive large emergency shipments. None of the Title III funds have been allocated yet. Import Highlights U.S. agricultural imports are forecast at $30.5 billion, $1 billion higher than in February. Imports of cocoa, sugar, and horticultural products account for the increase. Cocoa imports are projected at $1.4 billion, $300 million higher than in February, and cocoa volume is raised 200,000 tons to 900,000 tons. Record cocoa bean production has reduced import prices, and strong demand for confectionery products has boosted import demand. The forecast for sugar and related products is increased $300 million to $1.6 billion because of strong gains in sugar imports. The tariff-rate quota for sugar imports in fiscal 1996 has been raised to nearly 2.2 million short tons, raw value, and imports for re-export (711,000 short tons, raw value) are expected to be more than twice 1995 levels. The volume of sugar, product weight, is expected to reach 2.4 million metric tons in fiscal 1996. Demand for confectionery products remains strong in fiscal 1996. Horticultural imports are forecast at $10.5 billion, $400 million higher than February. The projection for fruit imports, including bananas and juice, is raised $200 million to $3.7 billion, mainly as prices are stronger than earlier expected and volume is expected to remain about the same as in 1995. Wine and malt beverages are raised $100 million to $2.4 billion on strong gains from the EU-15. Nursery and cut flower imports are expected to be $900 million. Note on horticultural volume The horticultural import volume was adjusted to include processed fruit and vegetable products. Previously, horticultural volume only included fresh or frozen fruit and vegetables. The change will lend some comparability to the export horticultural volume. In fiscal 1995, fresh and frozen fruit volume was 1.889 million tons, and the forecast in February was 2.1 million tons. Fresh and frozen vegetables were 2.484 million tons in fiscal 1995, and the previous forecast was 2.6 million tons.Approved by the World Agricultural Outlook Board and released May 30, 1996. The Outlook for U.S. Agricultural Exports is published in February, May, August, and November. The next quarterly summary is scheduled for release on August 29, 1996. The report summary may be accessed electronically. For details, call (202) 219-0515. END-END-END