September 22, 2000
News Release 00-121
U.S. GRAIN SECTOR FACED VOLATILE WORLD
MARKETS IN LATE 1990s, REPORTS ITC
U.S. grain farmers were buffeted by volatile domestic and foreign markets during the late
1990s, says the U.S. International Trade Commission (ITC) in its report Industry and Trade
Summary: Grain (Cereals).
The ITC, an independent, nonpartisan, factfinding federal agency, recently released the report
as part of an ongoing series of reports on thousands of products imported into and exported
from the United States. Following are highlights from the report:
The foregoing information is from the ITC report Industry and Trade Summary: Grain
(Cereals) (USITC Publication 3350, September 2000).
- The United States was the world's leading grain exporter and second leading producer
in crop year 1999/00, when it grew 333 million metric tons of grain, 18 percent of
world production. Grains such as corn, wheat, sorghum, rice, barley, and oats, and
specialty grains such as popcorn, are primarily used as human food and secondarily in
animal feed. The rest goes chiefly into industrial products such as ethanol.
- The value of U.S. grain production at the farm level was highly volatile during the
period covered by the report, dropping by $14 billion in four years, from a record
$40 billion in crop year 1996/97 to $26 billion in crop year 1999/00. The volume of
U.S. grain production rose by 21 percent during that period, from 275 million metric
tons (MMT) in 1995/96 to 333 MMT in 1999/00. In 1997 (the latest year for which
official U.S. data were reported), 463,000 U.S. grain farmers harvested 180 million
acres or about 389 acres per farm.
- Foreign markets purchased an average of 35 percent of the value of U.S. grain
production during the period 1995-99. U.S. grain exports fell sharply from a record
$17 billion in 1996 to $10 billion in 1999. In 1999, corn accounted for nearly one-half
of U.S. grain exports, wheat for one-third, and rice for one-tenth, with sorghum
accounting largely for the remainder.
- The U.S. Department of Agriculture (USDA) assistance program for grain farmers
cushioned the effects of the drastic drop in domestic and foreign grain sales, under the
Federal Agriculture Improvement and Reform (FAIR) Act. In 1999, USDA provided
about $11 billion in direct payments to U.S. crop farmers (most of whom raise grain),
as well as additional funds for disaster assistance. USDA provided credit guarantees
and assistance to U.S. grain exports as well.
- The United States ran a significant trade surplus in raw grain with foreign partners in
1999, totaling $9.4 billion. Major export markets included Japan, Mexico, South
Korea, Egypt, Taiwan, and the European Union. U.S. grain imports amounted to
about $730 million in 1999, 98 percent of which consisted of wheat, rice, and oats
from Canada, Thailand, and the European Union (EU). There was a series of bilateral
U.S.-Canadian grain disputes, largely centering on wheat and barley trade, during the
- The introduction of genetically modified (GM) crops with specific input characteristics,
such as so-called "Bt-corn," occurred during the period 1995-99 in the United States.
However, opposition to GM crops in the EU and other countries has affected U.S. corn
exports. Within the United States, the use, trade, and production of GM crops are
currently subject to extensive regulatory review and public attention.
ITC Industry and Trade Summary reports include information on product uses, U.S. and
foreign producers, and customs treatment of the products being studied; they analyze the basic
factors affecting trends in consumption, production, and trade of the commodities, as well as
factors bearing on the competitiveness of the U.S. industry in domestic and foreign markets.
This report will be available on the ITC Internet web site at www.usitc.gov. A printed copy
may be ordered without charge by calling 202-205-1809, or by writing the Office of the
Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436.
Requests may be faxed to 202-205-2104.
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