Where's Our Agriculture Going?

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November 24, 2004
Food Imports Close to Matching Level of Exports, Report Says
By ELIZABETH BECKER

ASHINGTON, Nov. 23 - Next year, for the first time in nearly five decades, the United States could import as much food as it exports, the Department of Agriculture said. Until now, the United States exported more food than it imported. One out of every three acres in the United States is planted for export and agriculture has been one of the few economic sectors that produced a predictable trade surplus.

But in a revised quarterly report issued this week, the Agriculture Department predicted that in 2005 the imports of farm products would equal exports, which are estimated at $56 billion. Foreign competition and record crop production in the United States, which pushed down world prices for grains, oilseeds and cottons, were blamed for the drop in export sales from the record of $62.3 billion set in this fiscal year, which ended on Sept. 30.

With the United States trade deficit deepening, reaching 5 percent of the gross domestic product in its fullest expression, this forecast was unwelcome news.

Earlier this year, the Agriculture Department had predicted a $2.5 billion surplus in agriculture for 2005.

This turnaround has occurred in less than a decade. Throughout the 1990's agricultural products were racking up increasingly large trade surpluses; the record, of $27.2 billion, was earned in 1996.

Indeed, political support for the $16 billion in federal farm subsidies every year is based in part on the importance of agriculture exports.

But as the United States concentrated on farm exports, American consumers have been buying more imported goods. This year the rise in imports was especially marked for processed foods, essential oils used in food and beverage processing, snack foods, red meat, wine, beer and fresh vegetables, according to the Agriculture Department.

Canada remains the United States biggest market for agricultural products, buying $9.7 billion. The next four projected big buyers are Mexico, at $8 billion; Japan, at $7.7 billion; the European Union, at $6.5 billion; and China, at $4.6 billion.

Several Congressional aides said this forecast could have an effect on the debate over the financing of farm programs in the next Congress.

New regional and international trade agreements have been held up by agricultural and farm policies.



Copyright 2004 The New York Times Company