U.S. Agricultural Trade Prospects Butler/Cunningham Conference Montgomery, AL November 8, 2004 Carol Goodloe, USDA

Shifting Composition of U.S. Exports Bulk Consumer/HVP Intermediate

Shifting Destination of U.S. Exports East Asia NAFTA EU China

What’s Hot? What’s Not?

Crops: U.S. Share of World Exports

Meats: U.S. Share of World Exports PeriodBroilersBeefPork

Export Competition Remains Strong 2003/ /14

Where Does Alabama Fit In? ItemShare of production Share of exports Broilers129 Peanuts11 Cotton34

Imports Take Off

Reactions to Growing Imports Trade Adjustment Assistance for Farmers –2002 Trade Act –Price & income triggers, increased imports –Shrimp, catfish qualified Increase in antidumping actions –Vietnamese catfish, Asian/South American shrimp –Among NAFTA partners: wheat, hogs, cattle, corn, beef, rice, HFCS, tomatoes, apples Country of origin labeling – consumer right to know or protectionism?

Corn Use Is Shifting

U.S. Agricultural Trade Surplus Narrows Exports Imports

Brazil’s Main Claims Against U.S. Cotton Programs U.S. support to cotton exceeded 1992 PFC, DP, MLA, CCP are support to cotton U.S. support “seriously prejudiced” Brazil by suppressing world prices Step 2 is illegal (domestic and export) Export credit guarantees are export subsidies and are illegal for cotton

Subsidies Suppress Prices

U.S. Cotton Exports Gain Unfair Market Share Foreign U.S.

U.S. Rebuttal U.S. support (rate) did not exceed 1992 Effect of marketing loan program depends on expected prices at planting Decoupled payments don’t support cotton Export credit programs were not export subsidies under URAA Step 2 is domestic support program Other factors caused world prices to fall – China’s stocks, exchange rates, U.S. mill use

U.S. Textile Imports Surge Exports Imports

What the Panel Ruled ☻U.S. support exceeded 1992 ☻PFC/DPs aren’t green box (planting restrictions) ☻Price-based support suppressed prices ☻Step 2 is illegal (domestic and export) ☻Export credits are export subsidies ☺PFC/DP’s, crop insurance – no effect ☺No threat, no unfair world market share

U.S. Agricultural Trade At a Crossroads? Feeling the pinch from imports – TAA for Farmers, AD actions, COOL WTO Dispute Settlement Panel -- Brazil challenge to U.S. cotton programs How will Doha Round play out? U.S. subsidies versus market access Next Farm Bill in 2007 – trade agreements, budget constraints