—Lancaster Farming, Saturday, December 8, 1973
8
Emerging Patterns . . .
Farm Trade In The 80 s
The future could be bright for
continued expansion of U.S. farm
exports, according to the latest
reading from USDA’s Economic
Research Service (ERS)
analysts.
However, exports cam-be ex
pected to fall from their current
peaks before resuming an up
ward course.
Total U.S. agricultural exports
to 1985 have been projected for
two sets of conditions. Though
both sets assume steady long
term growth in world demand for
livestock feeds, the more con
servative projection assumes
importing countries will pursue
self-sufficiency policies and that
high prices will constrain im
port demand. Under these con
ditions the volume of our
agricultural exports can be ex
pected to rise 46 percent from the
base year of 1970, but only 7
percent from current high levels.
The higher projection for 1985
shows a 25-percent increase in
exports over last fiscal year’s
and 70 percent above 1970’5. It
assumes animal production will
be encouraged in importing
countries and that demand for
feed grains and high-protein
meal will remain strong. The
U.S.S.R. would permit increased
livestock consumption even if it
meant importing significant
amounts of grain. China would
import to improve diets of city
people. The enlarged European
Community, under inducements,
would set lower target prices. In
the developing countries, ac
celerated income growth would
stimulate food consumption and
would strengthen the demand for
feed grains.
Under the analysts’ higher
projection, for example, U.S.
exports of feed grains could in
crease to 56 million tons, or 20
million more than what is ex
pected this year. Soybean exports
could jump to 31 million tons,
twice the level of current sales
and 19 million more than in 1970.
Even under the higher projec
tion, the increase in wheat would
be small.
Growth in volume has ex
plained most of the increase in
the value of U.S. agricultural
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exports during the last 2 decades.
In the low projection, however,
half of the increased the result of
rising prices. This study assumes
3 percent annual inflation for the
U. S. and nearly 4 percent for the
rest of the world. The dollar
devaluations of December 1971
and February 1973 are allowed
for. Inflation beyond these rates,
or further dollar depreciation,
would call for a reassessment.
Import demand for U. S. grains
looks especially promising in
Japan. Even under the lower
projection, Japan is expected to
take 28 million metric tons—
nearly three times the imports in
1970. Taiwan and Korea, both
with rapidly expanding
economies, would also demand
healthy amounts of grain.
Crucial markets. Our actual
exports 12 years from now will
depend in large part on
developments in the enlarged
European Community (EC-9),
Eastern Europe, and the U.S.S.H.
If these markets approach self
sufficiency in meat and grains,
we can expect under the lower
projection to export 31 million
tons of feed grains to all
destinations in 1985.
This would be 10 million more
than in base 1970 but below the 36
million reached in fiscal 1973.
The potential for bigger U.S.
soybean shipments is con
siderable even if Europe and the
U.S.S.R. attain self-sufficiency in
meat and grains. Soybean ex
ports in this case are projected at
nearly 26 million tons in 1985
two and a half times the 1970
level.
World consumption of meat
will continue on its long-term
uptrend, as will meat prices. The
bulk of the supplies will continue
to come from Australia, New
Zealand, and Argentina. U.S.
imports will keep going up, but
the net imports of the EC will
decline as a result of stimulated
production in the new member
countries. Japan’s consumption
and imports are likely to rise
rapidly.
For dairy products, projections
indicate ample supplies.
Reflecting buoyant demand for
livestock products, especially in
the developed and Communist
countries, total coarse grain
exports will rise more steeply,
than wheat exports and will be
larger than wheat exports.
Developed and Communist
countries will produce and
consume most of the wheat and
coarse grains. The developed
countries will continue to supply
the less developed countries
(LDC’s) with grain. However, the
developed importers will buy
more coarse grain whereas the
LDC’s will import more wheat.
This is because the LDC’s need to
use their limited foreign ex
change for importing food grains.
Projected production and trade
of the LDC’s permit an increase
in per capita grain use over 1970,
but any sizable increase would
probably come from larger
domestic production rather than
from larger imports. In some
LDC’r, where wheat production is
relatively unimportant, such as
Korea and Taiwan, there could be
significant expansion of wheat
imports.
Under the lower projection
alternative, all of Europe will
tend toward self-sufficiency in
grain production, and by 1985, the
area should be practically self
sufficient in wheat. Europe’s
coarse grain imports will fall
except in the non-EC countries of
Western Europe where net im
ports may total about 6 million
tons.
Worldwide, Japan will remain
the largest single market for
wheat and coarse grains.
And in the Soviet Union and the
People’s Republic of China,
larger imports are possible.
However, this would run contrary
to policies of trying to minimize
grain imports and to maximize
grain production.
But under the higher projection
alternative, U.S.S.R. and
Eastern Europe would follow a
policy to increase livestock
consumption at a faster rate of
growth than planned under
Alternative I, even if it meant
importing grain. This assumes a
high overall level of trade with
the western world.
The People’s Republic of China
would become more trade
oriented and import more grain
to improve city diets.
The enlarged European
Community wobld find it ad
vantageous to set price targets
somewhat below those specified
under Alternative I, say, because
the high cost of the Common
Agricultural Policy is becoming
politically unacceptable.
The livestock economies,
particularly poultry, in the
developing world would grow
faster than projected either in
countries with large revenues
from petroleum exports or in
countries with faster economic
growth than projected. This
would accelerate the demand for
feed grains.
All the projections would need
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to be adjusted if crop yields and
production around the world
could increase through major
breakthroughs in plant science,
or even continued steady
progress in the work of plant
breeders. The result would be ch
anges in production costs and in
the nutritional value of cereals.
World meat consumption is
expected to grow by 3 percent a
year to 1985, reaching 163 million
metric tons. Beef will account for
59 million tons, pork 54 million,
poultry 26, mutton 10, and other '
types 14. Pork use is seen in
creasing in the same proportion
as total meat, at 3 percent an
nually, while beef increases by
2.8 percent. Poultry will set the
pace with 3.8 percent. Mutton will
lag.
Prime consumer. As the
(Continued On Page 33)
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R.D.4, Manheim