Agriculture Reference
In-Depth Information
U.S. agribusiness trade and investment grows abroad
The U.S. food industry is growing—and it is growing abroad. Two key factors responsible
for that growth are trade and investment. International trade, both imports and exports of
food and food products, is increasing faster than domestic sales. The United States Department
of Agriculture reported that U.S. agricultural exports in fi scal year 2009 were $98.6 billion
(USDA ERS). In contrast, agricultural imports into the United States in 2009 were $76.2
billion, leaving a surplus in U.S. agricultural trade of $22.4 billion (
www.ers.usda.gov/Data/
The U.S. agricultural industry is dependent on the export market. Today, roughly 30 cents
of every $1 earned on agricultural products comes from exports. Strong export competition
continues to infl uence the projected trends in the export market. Strengthening global eco-
nomic growth may provide a foundation for gains in trade and U.S. agricultural exports.
These factors point to the possibility of rising market prices, increases in farm income, and
stability in the fi nancial condition of the U.S. agricultural sector.
Finally, growth prospects for U.S. agricultural exports, particularly in the consumer
food products area, are shifting. As growth in the markets of developed countries such as
Canada, Japan, and the European Union slows over time, developing countries and their
strong growth economies have become targets for increased food exports. Interestingly,
the competitive market and characteristics of consumer food products between developed
countries and developing countries differ (
Table 5.1)
. The successful international marketer
must address such differences.
Bulk commodities, high-value products
Agricultural exports are composed of two categories: value-added products and bulk com-
modities (
Table 5.2)
. Value-added or
high-value products (HVPs
) are agricultural products
that have received additional processing or require special handling or shipping. HVPs
include unprocessed foods such as fresh fruit or eggs, as well as processed and semi-
processed grains, oilseeds, animals and animal products, horticultural products, sugar and
tropical products. HVPs have been further categorized into intermediate commodities and
consumer products (beverages, meats, and frozen dinners). Intermediate commodities are
those that have received some processing (soybean meal), are used as inputs on the farm
(animal feeds, seed), or are used by food manufacturers (fl our). Bulk commodities, such
as wheat, corn, soybeans, rice, and tobacco have historically comprised much of U.S.
agricultural exports. However, exports of value-added products increasingly comprise a
larger portion of total agricultural exports.
Table 5.1
Characteristics of developed and developing markets for food
Developed Countries
Developing Countries
Saturation
Increasing Demand
Food safety
Food security
Buyer's market
Seller's market
Concentration
Fragmentation
