Bright Outlook for Ag Exports
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Ocean transport rates make the Pacific Rim the market of choice for U.S. ag exports. The USDA uses PIERS data to report on ocean transport trends.
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At year-end 2003, the U.S. Department of Agriculture was forecasting 6% growth in U.S. agricultural exports to a near-record high of $59.5 billion in 2004. Most of those exports will be heading west. PIERS data indicates that approximately 60% of containerized agricultural exports from the U.S. go to Asia, with the biggest share going to Japan.
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The dollar's depreciation is helping drive U.S. exports overall. A key factor favoring exports to Asia is the break on rates offered by shipping lines eager to fill empty containers returning from the U.S. That's good news for ag exporters: transport costs account for a big share of the import price of their products - as much as 50% for lower-value commodities.
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USDA economist April Taylor is a member of the team that prepares the agency's reports on containerized transport: Ocean Rate Bulletin and Agricultural Container Indicators, both quarterlies, and the semi-annual Agricultural Ocean Transportation Trends.
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All three draw on PIERS data. "For example," she explains, "USDA uses PIERS to select the leading lines, representative agricultural exports, and high-volume trade lanes for the Ocean Rate Bulletin's side-by-side comparisons of rates."
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The Container Indicators track rates, capacity utilization, and volumes for agriculture shipments to Asia. Transportation Trends analyzes issues impacting containerized transport costs.
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"The USDA reports extend access to selected PIERS intelligence to new exporters and the smaller producers," says Taylor, noting that most big exporters have in-house market intelligence facilities. [Most are PIERS subscribers too. - Editor]
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"This is information exporters can use to get their products to the market in the best condition, in the quickest time, and at the lowest cost possible," Taylor adds.
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The USDA reports are a good place to start building an export strategy. PIERS can fill in the details — including buyers and sellers of specific products — to develop your business model.
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