associate administrator...united states department of agriculture foreign agricultural service u.s....

United States Department of Agriculture

Foreign Agricultural Service

U.S. Agricultural Trade SituationFebruary 2019 Forecast

1

The Importance of Trade for U.S. Agriculture

Nuffield International Contemporary Scholars ConferenceMarch 13, 2019

Clay M. Hamilton

Associate Administrator

United States Department of AgricultureForeign Agricultural Service


What is the Foreign Agricultural Service (FAS)?

FAS Coverage in 171 Countries


American In Country

FAS Regional coverage

No Coverage Or Staff




What is Foreign Agricultural Service (FAS)?

Supports U.S. Farmers & Ranchers to Export their Products

• Trade Policy

• Export Promotion

• Trade Capacity Building

• Market Intelligence


FAS Market Intelligence

Assists U.S. Farmers to Export their Products

➢ GAIN Reports

➢ PSD Online

➢ GATS Trade Database

➢ Export Sales

➢ Trade Reports


Korea, Colombia,

Panama FTAs


Source: USDA FAS Global Agricultural Trade System, FATUS

0

20

40

60

80

100

120

140

160

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

'17

'18

19

(f)

Bill

ion

Do

llars

152.3

141.5

128.0

Records

Exports

Imports

Trade Surplus13.5

43.1

NAFTA

China in WTO

CAFTA-DR

Fiscal Year


More than 20% of U.S. Ag Production is Exported

6

Exports are a critical source of income for a wide range of ag products

81%76%

66%

58% 57%54% 52%

49% 48% 46%

36%

23% 22% 22% 21%17% 15%

11%6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Source: USDA/FAS/PSD database, 2017/18 marketing year dataU.S. Dairy Export Council(1) All Dairy Products: Calendar Year 2017

(2) Pistachios: Marketing Year 2016/2017(3) Corn & corn embedded in ethanol, DDGS, and HFCS exports 6




China and India Drive Potential Growth:“Middle Class” Households, in Middle Income Countries,Up 71% From 2016 Levels

Source: Global Insight’s Global Consumer Markets data as analyzed by OGA

142176

25766

728

150

151

0 50 100 150 200 250 300 350 400

Colombia

Vietnam

Malaysia

Taiwan

Philippines

Thailand

South Korea

Turkey

Egypt

Brazil

Mexico

Russia

Indonesia

India

China

Households w/ Real PPP incomes greater than $20,000 (millions)

2016 Proj. gains by 2026

Million Households


Global Meat Demand Fueling Grain & Feed Production

Source: USDA Production, Supply & Distribution Database

30

40

50

60

70

80

90

100

110

120M

MT

(in

CW

E fo

r b

eef

an

d p

ork

)Global Meat Production

Beef Pork Chicken Meat

0

5

10

15

20

25

30

35

40

45

50

China East Asia(minusChina)

SoutheastAsia

South Asia

Changes in Beef, Pork & Poultry Consumption (2008-2018)

17.4%

28.8%

44.1%48.3%

Percent Increase


As WTO Stalls, Countries Turn to FTAs for Market Access, U.S. Falling Behind

Source: WTO

0

50

100

150

200

250

300W

TO N

oti

fie

d A

gre

em

en

tsGlobal Preferential Trade Agreements

U.S.

EU-28

ROW



U.S. Competitors Have More Market Access to the WorldCanada and Mexico make up most of population access for the United States

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Thailand Indonesia Australia NewZealand

Canada Mexico India China EU U.S. Brazil

Bill

ion

s o

f P

eo

ple

Population Access Through Free Trade Agreements (FTAs)

North America

Oceania

South America

Central America & Caribbean

Africa

Europe

Asia + Middle East

Note: includes only FTAs that were notified to the WTO, as of September 2018, and CPTPPSource: World Trade Organization, World Bank (2017)

Through ASEAN FTAs, Thailand and Indonesia have access to China and India (2.7 billion people combined).

Orange: Mexico and Canada

465 million

2.8 billion



U.S. Trade Agenda

Trade Agreements• USMCA – Improves dairy and poultry access, fair treatment for

wheat and other agricultural products, updated SPS rules

• Korea – Updated KORUS

• Future potential trade agreements – Japan, UK, EU, Kenya

Enforcing Commitments• China – Ongoing negotiations working toward fair trade

• India – WTO Counter Notification concerning India’s trade-distorting domestic support prices for pulses (02/12/19)


Over 28% of Total U.S. Agricultural Exports are Shipped to Canada and Mexico

Source: USDA FAS/Global Agricultural Trade System (GATS) – BICO-HS10

Canada15%

Mexico14%

Japan9%

EU9%China

7%

S. Korea6%

Rest of World40%

FY 2018 U.S. Ag Exports to World (Total: $140 B)

$39.7 Billion to NAFTA


13

84% 99% 73% 82% 100% 93%0%

20%

40%

60%

80%

100%

120%

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

Val

ue

in B

illio

nD

olla

rs

United States Rest of World

Mexican Agricultural Imports & U.S. Market Share 2018

Source: IHS Markit, Global Trade Atlas (GTA), BICO-HS6

U.S. Market Share for Total Ag: 65%


U.S. Agricultural Trade with China (1999 – 2018)

$0

$5

$10

$15

$20

$25V

alu

e B

illio

nU

S$

U.S. Trade Balance U.S. exports to China U.S. Imports from China

Source: USDA FAS Global Agricultural Trade System BICO-HS10

U.S. Ag Exports to China - 53%China has retaliatory tariffs

on 99% of U.S. agricultural imports in response to U.S.

232 tariffs on steel & aluminum and 301 tariffs

$25.9B



Top U.S. Agricultural Exports to JapanTotal U.S. Agricultural Exports to Japan in 2018 = $12.9 billion

Source: USDA FAS Global Agricultural Trade System (GATS) – BICO-HS10

0.0

0.5

1.0

1.5

2.0

2.5

Corn Beef & BeefProducts

Pork & PorkProducts

Soybeans Wheat ProcessedVegetables

Hay Tree Nuts Fresh Fruit

Val

ue

in B

illio

nU

S$2016-2018 Average



FAS Here to Help: Partnerships Support Continued Export Growth

• Market Access Program (MAP): Marketing and Promotion Program ($200 million)

• Foreign Market Development Program (FMD): Create, expand and maintain long-term export markets ($27 million)

• Emerging Markets Program (EMP): Market development in emerging economies

• Agricultural Trade Promotion Program (ATP): Mitigation for retaliatory tariffs: $200M to develop new markets

• Additional programs: GSM-102, Quality Samples Program, Technical/Scientific support programs


U.S. Agricultural Trade SituationFebruary 2019 ForecastSummary

• Opportunities for U.S. agricultural exports globally, FAS programs can help U.S. producers find and expand those markets

• Retaliatory tariffs hurting U.S. ag exports, which also reduces U.S. ag trade surplus.

• U.S. competitiveness jeopardized by third party agreements that put U.S. products at disadvantage

• U.S. needs FTAs to maintain, if not gain, market share in new trade environment

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