Can Agriculture Save America's Balance Sheet?
There has been a lot in the news lately about the currency race to the bottom as each nation wants to have the exporting advantage. Back in January, we heard President Obama say that he wants the U.S. to double its exports by 2015. Also, recently, there has been a great deal of press coverage about the U.S. grain and agricultural product export market strength as something very positive for our overall economy.
To follow, are a few select 2009 import and export numbers. I've categorized them as general trade numbers, followed by the Agriculture sector, and then the oil sector, for the sake of comparison. Keep in mind that because of the recent financial crisis, currency fluctuations, and the weather and economic related commodity demand fluctuations, these statistics have been quite volatile these past few years. To give you two examples of such volatility, the U.S. trade deficit was halved from 2008 to 2009 and the value of wheat exports was also halved from 2008 to 2009.
- The U.S. 2009 nominal GDP was $14.3 trillion (breakdown: agriculture: 1.2%; industry: 21.9%; services: 76.9%)
- U.S. Imports were $1.95 trillion in 2009
- U.S. Exports were $1.57 trillion in 2009
- 2009 trade deficit was $380 billion
- Obama's stated goal to double exports would equal $3.14 trillion in exports by 2015
- 2009 Ag exports were $98.6 billion
- 2009 Ag imports were $71.7 billion
- 2009 Trade surplus in Agriculture was $26.9 billion
- Trade surpluses in the Ag sector for previous years: $5.6 in 2006; $18.1 in 2007; $34.8 in 2008)
- Year-to-date Ag exports stand at $15.6 billion (through August 2010)
- The total agricultural output, including forestry, fishing and hunting, was $136.4 billion in 2009, according to the Bureau of Economic Analysis.
- 0.7% of U.S. employment comes from farming, forestry, and fishing in the U.S.
- Agriculture's share of the economy shrank from 8.6 percent in 1948 to about 1 percent in the past decade.
- USDA expectations are that in 2011 our top three agricultural trading partners will be: Canada $16.8 billion; China $15 billion; and, Mexico $14.6 billion.
Breakdown of Ten U.S. Agricultural Export Categories in Dollar Amounts from 2009:
- Soybeans $16.9 (all in billions)
- Meat and poultry $12.1
- Corn $9.7
- Other foods $8.1
- Fruits and frozen juices $6.9
- Animal feed $6.3
- Wheat $5.5
- Vegetables $4.9
- Nuts $4.1
- Rice $2.2
Energy Sector U.S. Imports/Exports 2009:
- Petroleum imports in 2009 were $254 billion
- Petroleum exports in 2009 were $49 billion
- The 2009 deficit in petroleum products was $204.5 billion
- Crude oil imports were $188.7 vs. exports of $1.0 (in billions)
- "Other petroleum products" imports were $28.8 vs. exports of $21.7 (in billions)
- Natural gas imports were $16.1 vs. exports of $3.3 (in billions)
- Fuel oil imports were $27.1 vs. exports of $23.7 (in billions)
- In 2009, the U.S. agricultural surplus erased 13 percent of our petroleum deficit in trade.
- The 2009 U.S. trade surplus in agricultural goods was equivalent to 7 percent of the year's total trade deficit.
- Agriculture represented 1.2% of U.S. 2009 nominal GDP and employed .7% of workers (directly).
While the recent press releases citing only the export figures in agriculture are feel-good for our ailing economy and reflect higher grain commodity prices for the time being, also helped out by a lower dollar value, rural main street is still hurting, farmland prices are becoming burdensome, and the agricultural trade surplus dollar amounts are not going to save America's balance sheet.
Agriculture will undoubtedly gain in GDP share and in sector employment percentage in the future, however, as our nation enters a time period of less affluence due to our debt burden, demographics, and higher fossil fuel prices.
sources: cia, census.gov
Note that data is taken from this recent USDA report which defines agricultural products as: USDA defines agriculture to include: live animals, meat, and products of livestock, poultry, and dairy; hides and skins (but not leather products); animal fats and greases; food and feed grains and grain products; oilseeds and oilseed products; fruits, nuts, and vegetables and products of these; juices, wine, and malt beverages (not distilled spirits); essential oils; planting seeds; raw cotton, wool, and other fibers (not manufactured products of these); unmanufactured tobacco (not manufactured tobacco products); sugar and sugar products; coffee, cocoa, tea, and products of these; rubber and allied products; and stock for nurseries and greenhouses, spices, and crude or natural drugs. Fish, shellfish, and forestry products are not included in "agriculture."