US Farm Exports Surge - and Not Just Grains but Be Wary of Betty Crocker Cakes in Andes Mountains

Article excerpt

Just a few years after the United States won the cold-war contest for the world's hearts and minds, the nation's food industry is making inroads in another vital realm: the world's stomachs.

The value of US agricultural exports this fiscal year will surge to a record $60 billion, a 60 percent jump since 1991.

The robust trade is strengthening US diplomatic leverage over dependent countries. It also promises greater prosperity for the 20 million Americans whose livelihoods are tied to agriculture.

"We expect prices to remain strong and we expect exports to remain strong - the trend-line over time is definitely up," says Paul Drasick, adviser on international trade to the US secretary of agriculture.

Moreover, the US farm economy should offer Americans more and better jobs as goods like fruits, processed meats, and snacks continue to claim a higher proportion of total food exports. Value-added goods as a proportion of food exports should rise from 57 percent to 64 percent by the year 2005, says the US Department of Agriculture (USDA). Such value-added products generate more wealth than corn, wheat, and other bulk foodstuffs.

Food exports are a bright spot in the checkered tapestry of overall US trade. Amid an overall trade deficit, the surplus in farm trade will hit a record $29.5 billion this year, according to the USDA.

Several impediments still hamper US agricultural exports, including tariffs and different dietary tastes abroad. But many roadblocks are eroding. Indeed, analysts say the US should continue to lengthen its lead as the No. 1 agricultural exporter for several reasons:

*The decline of communism and central planning has opened many markets.

*The dollar is historically low compared with many currencies, making US products relatively cheap.

*Multilateral agreements have lowered trade barriers.

*The sluggish growth in the mature domestic market for foods is driving many companies to seek opportunities abroad.

*An expanding middle class worldwide, especially in booming East Asia, demands more protein and processed foods.

*Poor harvests across the globe in recent years have plunged corn and wheat supplies to very low levels, jacking up grain prices and the payoff from exports.

*The US produces, transports, processes, and markets many farm goods more cheaply than other countries.

Banner trade should bolster US diplomatic heft, say analysts. Many countries that rely increasingly on US goods are in strategically vital areas. The value of exports to Asia will hit $27.6 billion this year, for example, for a surge since 1993 of 74 percent, according to the USDA.

Exports to Japan, South Korea, and Southeast Asia have especially ballooned this decade. …