Developing Countries
BY ERIC VAN CHANTFORT
USDA Information Spec.
The destinations and distribution
of U.S. agricultural exports are
changing, with the less developed
countries of the world assuming an
increasingly prominent role in U.S.
trade fortunes.
For each of the last 3 years,
more U.S. grains and feed were
purchased by the less developed
countries (LDC’s) than by the
traditionally larger markets of
Western Europe, Japan, Canada,
and the other “developed” nations.
For U.S. oilseeds, it’s still the
developed nations that take the
lion’s share (roughly two-thirds) of
our exports, but their purchases
have dropped sharply. Meanwhile,
U.S. shipments to the LDC’s are
holding near record levels.
“The composition of U.S. export
markets has shifted, perhaps
- . <v.> --^
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permanently,” notes USDA
economist Steve MacDonald in a
recent issue of the department’s
FARMLINE magazine. He says
this shift toward a bigger role for
the LDC’s has been one of the more
important trends in U.S.
agricultural trade over the past
decade.
Data from MacDonald and other
trade analysts of USDA’s
Economic Research Service'
reveal the extent of this shift in the
U.S. customer base.
In fiscal 1975, just over half of
total U.S. grain and feed exports
went to a relative handfull of
buyers that economists classify as
the developed nations. The
remaining portion was sold,
mainly in smaller quantities, to
more than 100 LDC’s and several
centrally planned countries.
By last year (fiscal 1985), the
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distribution had changed
significantly. Less than two-fifths
of U.S. grain and feed exports went
to the developed nations, while
slightly more than two-fifths went
to the LDC’s. Centrally planned
markets (the USSR, Eastern
Europe, and China) took about
one-fifth of the total.
Although purchase volume has
dropped sharply in the last few
years for all three categories of
buyers, the largest and most
sustained declines have come in
our developed country markets.
From a fiscal 1980 peak of nearly
51 million metric tons of U.S.
grains and feeds, our exports to the
developed nations dropped by
more than 30 percent to less than 35
million tons last year. That was the
lowest volume in more than 10
years.
Oilseeds and products rank
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second only to grains in generating
export revenues for U.S.
agriculture. In oilseeds, the
developed nations remain the
largest U.S. customers by a wide
margin yet the LDC’s have been
closing the gap as imports by the
European Community and Japan
have declined.
In fiscal 1975, more than 80
percent of U.S. oilseed export
volume went to the developed
nations, and only about 12 percent
to the LDC’s. By 1985, the share of
U.S. oilseeds going to the LDC’s
had more than doubled to 30
percent.
Trade analysts recognize that
Western Europe, Japan, Canada,
and several other developed
markets will remain among the top
customers for U.S. agricultural
exports. The analysts suggest,
however, that the potential for
IT MANAGER
iTRK
future export growth is probably
greater among the LDC’s, as a
group, than among the developed
nations.
The reasons include faster
population growth in the LDC’s,
faster growing economies in many
cases (Taiwan and South Korea
being prime examples), the
prospective need for more feed
grains and oilseeds to support
emerging meat animal sectors,
and resource limitations that may
preclude agricultural self
sufficiency. In addition, the
populations of the IDC’s are not as
well fed as people in developed
nations, so they tend to spend a
fairly large portion of any ad
ditional income on food.
“Our traditional customers
remain very important,” con
cludes MacDonald. “But we also
have to recognize the increased
role of our important Third World
customers and the large potential
role of the rest of the less
developed world. Self-interest
alone dictates that we pay close
attention to their various needs
and concerns in such areas as open
markets for their products, debt
relief, and economic develop
ment.”
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