Processed high-value products (HVPs) accounted for most of the
growth in U.S. agricultural exports between 1976 and 2002, with
$11 billion of the $30-billion total gain in U.S. agricultural
exports during that period. In 2000 and 2001, exports of processed
HVPs alone (meats; canned, dried, and frozen fruits and vegetables;
processed grain products; dairy products; essential oils; juice;
and wine) surpassed bulk agricultural exports to become the largest
category of U.S. agricultural exports. Most of the growth in processed
HVP export value occurred in the 1990s, the result of the depreciation
of the dollar (between 1986 and 1996) and trade agreements, such
as the North American Free Trade Agreement (NAFTA).
Exports of raw HVPs—fresh fruits and vegetables, live animals, nuts,
and nursery products—also expanded over the 26-year period and have
shown strong growth since 1989. These benefited greatly from NAFTA because
of the
high cost of special handling needed to preserve freshness. Shipping by truck
to neighboring countries is far less costly than air freight to more distant
destinations. Exports of raw HVPs rose 5.1 percent annually between 1989
and 2002. In 2002, as a result of growth in exports of U.S. raw HVPs to Canada
and Mexico, U.S. agricultural exports to the Americas exceeded those to Asia
for the first time in history. Canada surpassed Japan as the largest single
market for U.S. agricultural exports, with Mexico ranked third.
The third subgroup of HVPs, semiprocessed HVPs, includes feeds, hides, fats,
fibers, and oilseed products. Semiprocessed HVPs showed much less growth in
exports, averaging only 2 percent yearly from 1989 to 2002.
U.S. exports of bulk commodities—wheat, rice, coarse grains, oilseeds,
cotton, and tobacco—formerly the largest category of U.S. agricultural
exports, were overtaken by HVPs in 1991. Bulk exports were $3 billion lower
in 2002 than in 1989, and between 1976 and 2002, their share of total U.S.
agricultural exports plummeted from 70 to 30 percent. Bulk exports are more
variable than HVPs, depending on global supplies, global income growth and
consumer demand, prices, and relative exchange rates. Gains in bulk exports
were dampened, particularly in the 1990s, by the protectionist policies of
the European Union, reduced demand from the former Soviet bloc countries
as they became more market oriented, and increased export competition from
these
countries, as well as Argentina, Brazil, and China.
Although corn, soybeans, and wheat—all bulk commodities—are
still the largest U.S. agricultural exports in value, fresh beef has been
the fastest
growing export. In 2002, beef ranked fourth among individual product exports.