The recent announcement from USDA that agricultural imports in fiscal year (FY) 2006, the year that ended on September 30, were $64 billion has again caused comments about imports threatening the food security and food safety of the country. National borders are no longer barriers that significantly limit choices for consumers in developed countries. A look at the details behind the $64 billion headline shows U.S. consumers have access to a wide array of imported products that meet their specific needs.
USDA breaks agricultural imports into three broad categories: bulk products, intermediate processed products and consumer-oriented products. In FY 2006, the U.S. imported $8.9 billion of bulk commodities, 13.9 percent of total agricultural imports. Of these imports, $2.7 billion was unroasted coffee. Bulk tea imports totaled another $420 million and cocoa beans $738 million. Rubber and allied product imports, not thought of as agricultural products, were $2.0 billion. Bulk tobacco imports were $754 million. These five commodities totaled $6.6 billion, 74 percent of bulk imports. The U.S. imported $853 million of wheat, course grains and rice in FY 2006, while exporting $12.4 billion of those commodities. Imports of raw sugar were $910 million; over one-third came from Central America and the Caribbean.
Intermediate processed product imports totaled $12.9 billion in FY 2006, 20.2 percent of total agricultural imports. Live animal imports were $2.5 billion, with 90 percent from Canada and Mexico. Cocoa paste and cocoa butter imports were $668 million. Sugar, sweeteners and beverage base imports were $997 million, but were mostly offset by $746 million of exports of the same group of products. Imports of feeds and fodders for livestock totaled $332 million, but exports were $2.0 billion. Hides and skins imports were $148 million; hides and skins exports were $2.0 billion. Planting seed imports were $584 million, and planting seed exports were $886 million.
Intermediate products include three vegetable oil groups: tropical oils like coconut and palm at $715 million, essential oils like fruit oils and a host of obscure oleoresins at $2.5 billion, and other vegetable oils like canola oil and olive oil at $1.9 billion, totaling $5.1 billion. Some of them cannot be replaced by domestic vegetable oils and others have nonfood uses. The U.S. exported $1.3 billion of vegetable oils and $6.4 billion of bulk soybeans.
Consumer-oriented product imports in FY 2006 were $42.2 billion, 65.9 percent of total agricultural imports. Wine and beer imports totaled $7.4 billion, 17.5 percent of total consumer-oriented imports. Roasted and instant coffee imports were $500 million, and spice imports were $617 million. Plant nursery products and cut flowers imports were $1.4 billion. Banana and plantain imports were $1.2 billion. Dairy products and cheese imports were $2.3 billion, and exports were $1.8 billion. Tree nut imports were $1.1 billion, but tree nut exports were $2.9 billion. Snack food imports (including chocolate), were $4.6 billion, while snack food exports were $2.0 billion. Imports of fresh and processed fruits (other than bananas) and vegetables and juices totaled $12.7 billion, 30.1 percent of consumer oriented product imports and 19.8 percent of all agricultural imports. Exports of that group were $8.1 billion. Meat imports were $5.1 billion, and meat exports were $7.3 billion.
These food imports do not raise food security issues, but the larger question is what is going on with all of this two-way trade across our nation’s borders? Why are U.S. tree nut imports $1.1 billion while exports are $2.9 billion? Why is the U.S. importing $747 million of wine from Australia and $911 million of beer from the Netherlands, while exporting $993 million of beer and wine? Should we give up eating chocolate since cocoa is not grown in the U.S.?
Trade, across town or half way around the world, is all about the economic efficiencies of responding to the demands of consumers in the marketplace. U.S. consumers prefer chicken white meat, but chickens also produce dark meat that is exported at lower prices to consumers in other parts of the world. Consumers want fresh fruits and vegetables year round, and Chile supplied $1.2 billion of fresh and frozen fruit in FY 2006. Some European chocolate is considered superior to U.S. products even though it all starts from the same cocoa from Africa. U.S. agricultural imports and exports simply reflect an increasingly diverse group of consumers worldwide.
Some trade occurs because of regional movements within North America. Transportation costs can be lower for vegetables moving from eastern Canada into the northeast U.S. than from the western U.S., while western Canadians can buy cheaper from the western U.S. Live animals move from Mexico and Canada to the U.S. because of the availability of feed supplies and meat processing capacity. Our NAFTA partners account for 35 percent of U.S. agricultural imports. The open trading system promotes market efficiencies that expand markets for producers and reduce consumer costs.
The current USDA forecast for agricultural imports for FY 2007 is $69 billion, up $5 billion from FY 2006. That increase is slightly less than the $5.75 billion average yearly increase over the past four years.
Rather than finding non existent economic or national security threats in agricultural imports, the focus should be on increasing the quality and reducing the costs of U.S. agricultural products that can be sold into other markets. There is no reason to deny U.S. consumers the pleasures of consumption of coffee and bananas because they are not grown in substantial quantities in this country or access to fresh fruits and vegetables when it gets cold in the U.S. in the winter.