USDA raises FY08 farm exports to record $108.5 bln

WASHINGTON: U.S. farm exports during fiscal year 2008 are forecast to surge to a record $108.5 billion, up $7.5 billion from a February estimate, with nearly two-thirds of the increase coming from grains and animal products, the Agriculture Department said on Thursday.

"The increase in the 2008 (export) forecast is being driven by both higher unit values and volumes, and USDA has raised its forecast for virtually every regional market," the department said.

The previous export record is $81.9 billion set in fiscal 2007, which ended on Sept. 30. Four months remain in fiscal 2008.

Prices for wheat, corn, soybeans and rice have set record highs in recent months, driven by disappointing global harvests due to drought, growing demand for biofuels and rising appetites for better diets. Around the world, rising food prices have lead to hoarding, bread lines and food riots.

In a quarterly forecast, USDA raised its estimate for grain and feed exports by $2.6 billion to a record $35.3 billion. The hot commodity market lead USDA to raise its forecast for shipment of all commodities, including rice, corn, soybeans, livestock, poultry and dairy products, except cotton, which was decreased.

Exports of corn were revised higher by a million tonnes to a record 63 million tonnes, valued at $12.9 billion.

"Competition from China and Argentina remains largely absent. Strong demand and premiums for Brazilian corn in the European Union have made U.S. corn more attractive in many markets," said USDA.

The fiscal 2008 export forecast for oilseeds and products is $20.7 billion, up $1.8 billion from the February forecast, due to a 2.3 million tonne upward revision in soybean exports.

Shipments of livestock, poultry, and dairy products are forecast to rise to $20.5 billion, an increase of $2.5 billion from the February forecast. About half of the increase would be larger sales of dairy products.

USDA's trade report also projected record imports of agricultural items at $78.5 billion, up from its prior estimate of $76.5 billion.