U.S. Agricultural Trade And Its Impact On Transportation 

International Summit on Agriculture and Food Transportation

Wednesday, December 3, 2008Floyd D. GaiblerDeputy Under Secretary Farm and Foreign Agricultural ServicesU.S. Department of Agriculture

U.S. Agricultural Trade and Its Impact on Transportation

Roles of Agriculture, Transportation, and TradeAgricultural Trade OverviewU.S. Trade Policy Doha RoundFree Trade AgreementsMaintaining; Building Markets

Conclusion

Truck Transportation

U.S. Agriculture is largest user of freight transportation Trucking handles: 90 percent of all U.S. food shipmentsNearly half of all grain movements in    United States

Trucking employs 17 percent of nation’s workforce

0%

10%

20%

30%

40%

50%

60%

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06Year

Rail Barge Truck

U.S. Grain Modal Shares, 1978‐2006 

Source:  USDA/AMS/Transportation Services Division

Transporting U.S. Grains

Transporting U.S. GrainsTonnages Of All U.S. Grains Transported By Mode

1978‐2006 

Source:  USDA/AMS/Transportation Services Division

0

50

100

150

200

250

300

350

400

450

500

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Year

Mill

ion

Tons

Truck Rail Barge

Source:  USDA/AMS/Transportation Services Division

6

Agriculture’s Value to U.S. Transportation

Net cash farm income on track for $90.7 billion, an all‐time recordStrong agricultural economy means more business for transportationBiofuels means opportunities, but poses challenges

7

U.S. Agricultural Trade

Trade Value ($Billion)

27.3

49.1

59.8

$0

$10$20

$30$40

$50$60

$70

$80$90

$100$110

$120

'87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09f

ExportsImports

Trade Surplus

Record79.3

82.2

70.1

115.5

36.1

81.0

98.5

17.5

Source: Compiled by USDA using data from Census Bureau, U.S. Department of Commerce

8

Higher Prices Drive $33‐Billion Increase, But Widespread Volume Gains 

Also Important

$0 $1 $2 $3 $4 $5 $6

Fresh F&VTree nuts

BeefBroilers

PorkSoymeal

SoyoilCotton

SoybeansRice

WheatCorn

$0

$10

$20

$30

$40

$50

2001 '02 '03 '04 '05 '06 '07 '08

volume

price

Bulk Export Value ($Bils) FY 2001‐08

vol price

high-value products

Export Value Gains by Product, FY 2007/08 Value Chgs Due to Volume vs. Price ($Bils)

$19.2 bil.

Source: Compiled by USDA using data from Census Bureau, U.S. Department of Commerce

9

Top U.S. Agricultural Export Markets

$0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20

EU

China

Japan

Mexico

Canada

200820072006

Billion $Source: Compiled by USDA using data from Census Bureau, U.S. Department of Commerce

10

Major Rail Entry Points for U.S. Grain and Soybean Exports To Mexico

11

Trucks are likely to compete with railroads for access to Canadian markets

Demand for trucking services for live animal shipments averaged almost 30 million head between 2000‐2005

Excluding livestock, 60 percent of total volume of agricultural products exported to Canada fall into seven categories

Canada Exports and Transportation

12

0 25 50 75 100 125 150 175 200 225 250

ChinaIndiaRussiaMexicoBrazil

ThailandIndonesiaNigeria

PhilippinesTurkey

Households (in millions)

2004 levels Projected gains by 2020

Top 10 Developing Countries With Fastest Growing Middle Class

Factors Driving U.S. Agricultural Export Gains

Data Source: IHS Global Insight, World-Real GDP Growth Annual, October Release

13

Strong GDP Growth in the Developing Countries

Real GDP Growth for Developing Economies and the Former Soviet Union

Data Source: IHS Global Insight, World-Real GDP Growth Annual, October Release

-15.0

-10.0

-5.0

0.0

5.0

10.0

1990 1995 2000 2005 2010 2015 2020

Former Soviet Union

Latin America

Developing Asia

Africa

Middle EastPercent

Projected growth

Data Source: IHS Global Insight, World-Real GDP Growth Annual, November Release

14

Trade Policy

Multilateral – Doha Development Agenda

Regional/Bilateral FTAs

Minimize Trade Barriers

“Competition for liberalization”

15

The Trade Agenda: WTO

75 7154 49 48

39 39 34 301225

86104

113

0

20

40

60

80

100

120

South Asia

Non-E

U West

Europe

Caribbean

Islan

ds

Sub-Sahara

n Africa

North A

frica

Centra

l Ameri

ca

Eastern

Europe

Middle East

South Ameri

ca

Southern

Africa

Asia-Paci

fic

European

Union

North A

merica U.S.A

vera

ge B

ound

Tar

iff R

ates

(%)Average bound agricultural tariff in

all WTO countries 62%

Source: USDA calculations based on WTO data

A World Without Doha?No Doha Means No Economic ReformNo tariff cuts AMS unchanged ($19.1); unbound Blue Box; no  change in Green Box;  no cotton reductions Export subsidies continue; export credits and food aid unchanged; state trading untouched

Farm Bill ImplementationNo Change in U.S. Position Increases Criticism and Challenges of U.S. programs “Circuit Breaker” 

Bilateral and Regional Free Trade Agreements Even More Critical

17

U.S. Free Trade AgreementsAustraliaBahrainChileColombia*CAFTA‐DRCosta Rica▲Dominican RepublicEl SalvadorGuatemalaHondurasNicaragua

IsraelJordanNAFTACanadaMexico

MoroccoOman▲Panama*Peru▲SingaporeSouth Korea*

*Awaiting Congressional ratification ▲Ratified, but pending entry into force

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Examples of International Engagement

Overcoming SPS BarriersOIE – BSE; A.I.

Monitoring and EnforcementTurkey‐RiceEU‐BiotechEU‐HormonesIndia‐Wine

Trade Capacity BuildingCAFTA‐Poultry

Maintaining Market Access

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Conclusion

Agriculture, Transportation, and Trade Share ValueExports Remain Vital to U.S. Agriculture

Highest Growth is in Emerging MarketsConclusion of Doha Round is Essential

No Doha = More Challenges to U.S. PolicyNeed for Continued Engagement

Adoption of Pending FTAsMonitoring and EnforcementAcceptance of Science‐Based Standards

Thank You

International Summit on Agriculture and Food Transportation

Wednesday, December 3, 2008Floyd D. GaiblerDeputy Under Secretary Farm and Foreign Agricultural ServicesU.S. Department of Agriculture