Purdue News

June 1, 2004

Economist: Ag exports race toward record, with Indiana setting pace

WEST LAFAYETTE, Ind. - Agricultural exports are racing toward a record high this year, with Indiana helping fuel the economic engine.

The U.S. Department of Agriculture on Wednesday (5/26) forecast national farm export sales of $61.5 billion in fiscal year 2004. The estimated total is $5.3 billion more than in 2003 and $1.7 billion above the previous high set in 1996.

Indiana is expected to contribute its share to the 2004 record, said Chris Hurt, a Purdue University agricultural economist. Hoosier farm export sales could jump $300 million this year, he said.

"Agricultural exports from Indiana are going to be around $2 billion for the 2004 fiscal year," Hurt said. "That's up from $1.7 billion in 2002, the last year for which there are USDA state estimates."

Growing export markets portend a stronger jobs outlook for the agricultural industry, Hurt said.

"USDA analysts suggest that each additional $1 billion in agricultural exports creates 15,000 jobs," he said.

Corn and wheat exports likely will account for half of the annual increase in U.S. agricultural exports, the USDA announced. Export gains in Indiana also will be tied to grains, Hurt said.

"Indiana's three major grains are corn, which is the most important in terms of export sales, soybeans and wheat," he said. "About 60 percent of state ag grain exports will come from corn, 30 percent from soybeans and 10 percent from wheat."

Exports of livestock and livestock products are projected to drop both nationally and in Indiana. Pork exports could be the exception, Hurt said.

"Indiana is a relatively major meat-producing state, particularly in hogs and some cattle," he said. "But exports are going to be down this year as a result of the restriction on beef exports from the United States due to the BSE (bovine spongiform encephalopathy) incident and with avian influenza reducing some poultry exports. Overall, I think animal exports for Indiana are going to be a wash - we'll see greater pork exports but less beef exported, as well as somewhat less poultry exported."

In announcing the 2004 U.S. farm export numbers, Agriculture Secretary Ann Veneman credited recently reopened markets and high commodity prices for the export sales surge. Hurt added that tight world grain stocks, strong world income growth and the lower value of the U.S. dollar are major contributors as well.

"Exports to China continue to be a real bright spot for U.S. agriculture," Veneman said. "U.S. agricultural exports to China will have more than tripled since their accession to the World Trade Organization, rising from $1.8 billion in 2001 to $3.5 billion in 2003, and they are forecast to reach a record $5.9 billion in fiscal year 2004. China was our fifth largest agricultural customer last year and our No. 1 market for soybeans, cotton and hides/skins."

U.S. agricultural imports are projected at $51.4 billion for 2004, up $5.8 billion from 2003, Veneman said.

Writer: Steve Leer, (765) 494-8415, sleer@purdue.edu

Source: Chris Hurt, (765) 494-4273, hurtc@purdue.edu

Ag Communications: (765) 494-2722; Beth Forbes, forbes@purdue.edu
Agriculture News Page

U.S. Department of Agriculture Outlook for U.S. Agricultural Trade - 2004

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