September 3, 2010

US agri exports going strong

Despite difficult economic times, the US agriculture sector is going strong, supported in part by a rise in exports, according to federal estimates of farm trade and income.

According to economists, agriculture, which has not been affected as badly by the recession compared to other segments of the economy, remains a small bright spot going forward.

"We're just having a robust rebound in the agricultural sector and promises of more growth," Jason R. Henderson, vice president and economist at the Omaha branch of the Federal Reserve Bank of Kansas City said.

The estimates show that American farmers will ship US$107.5 billion in agricultural products abroad in the fiscal year that ends September 30. That is the second-highest amount ever, behind the record US$115.3 billion in exports logged in 2008, when commodity prices soared as the global demand for agricultural products was helped by fast-growing economies in the developing world.

Next year, exports are expected to total US$113 billion. In releasing the data, Tom Vilsack, the secretary of agriculture, said exports of grains and meats were leading the rebound. He called the new estimates "very encouraging."

The export growth is propelled by higher prices for many products, including wheat, whose prices have skyrocketed as drought affected crops in Russia, Ukraine and Kazakhstan. Exports to Asia have been particularly strong, and China is forecast to surpass Mexico next year to become the second-largest foreign buyer of American farm products. Canada is the No. 1 export market.