By Robert Pore
robert.pore@theindependent.com

USDA Agriculture Secretary Ed Schafer said last week that the forecast builds off of "unprecedented consecutive year to year record exports since 2004."

He said higher wheat, coarse grain and soybean prices account for just over half of the revision since November.

"Based on current market conditions, bulk grains, oilseeds and cotton exports should rise $13.2 billion and account for 70 percent of the overall increase in export value for 2008," Schafer said.

Higher prices account for most of this increase, but export volumes are also generally higher, Schafer said.

He said coarse grains are forecast to rise 10.9 million tons to 70 million tons and wheat should rise 2.3 million tons.

"We also see further increases in high-value product exports such as fresh and processed fruits and vegetables, tree nuts, pork, beef, poultry meat, and many grocery products," Schafer said.

He said exports of animal and horticultural products are forecast to rise a combined $3.5 billion in 2008 to record levels. With U.S. agricultural imports forecast at $76.5 billion, Schafer expects a $24.5 billion trade surplus.

Foreign economic growth continues to support gains in consumer incomes and growth in the size of the middle class, particularly in the emerging markets, according to the USDA.

But according to Schafer, the weaker dollar makes U.S. products very price competitive compared to other suppliers. At the same time, tighter competitor stocks further raise demand for U.S. wheat and corn.

"Trade agreements have a significant impact on our ability to compete and sell our agricultural commodities in world markets," said Schafer. "If Congress ratifies the pending free trade agreements with Colombia, Panama, and Korea, the increased access will boost our producers' exports even higher."

Ken Hobbie, U.S. Grains Council president and CEO, said the consecutive year-to-year record export levels since 2004 is attributable to many factors including natural calamities and a weaker dollar.

But Hobbie said that continuing market development and market defense also contributed significantly.

"Some are under the impression that exports just happen and in all honesty, sometimes they do, but without strategic market development programs and defense efforts, exports would be in a very volatile position," said Hobbie.

While competitor exportable supplies of corn and other feed grains are limited because of severe drought conditions in many parts of the world, U.S. supplies have remained ample due to American farmers responding to demand and harvesting a record corn crop, Hobbie said.

Record prices have not yet had any significant dampening effect on foreign importers, he said. The broadening access for U.S. feed grains and all agricultural products is key to the increasing export levels.

"We have seen Congress successfully ratify many trade agreements this past year, and the council is looking forward to the approval of trade agreements with Colombia, Panama and Korea," he said.