Processed food imports up 11 percent in 1996.U.S. trade in processed foods (the sum of imports and exports) in 1996 rose 6.5% from 1995 - somewhat smaller than the 10.7- and 8.6% jumps of the previous 2 years, but strong nonetheless.
Imports led the growth in 1996. Processed food imports averaged a 4% annual growth rate over the previous 5 years, but grew an astounding a·stound
tr.v. a·stound·ed, a·stound·ing, a·stounds
To astonish and bewilder. See Synonyms at surprise.
[From Middle English astoned, past participle of astonen, 11.2% in 1996 to $27.8 billion. Exports, by comparison, grew only 2.5% to $30.1 billion, well below their average growth rate for the past 5 years.
The processed food trade surplus (exports minus imports) amounted to $2.4 billion, down from the record $4.4 billion in 1995, but still the third largest on record (fig.1). The 1996 surplus thus continues a pattern of positive balances begun in 1992. Given reasonable assumptions for U.S. economic activity, imports should have continued their strong growth in 1997. Export growth is expected to have rebounded in 1997 to about 4%, resulting in a trade surplus of under $2 billion.
This article covers exports and imports of processed foods, beverages, and related products that fall under Standard Industrial Classification Code 20 (SIC-20). SIC-20 contains 49 food processing Food processing is the set of methods and techniques used to transform raw ingredients into food for consumption by humans or animals. The food processing industry utilises these processes. industries. The processing may be minor, as in the case of fluid milk, or may be quite extensive, such as for frozen pizza.
Export Growth Positive, But Smaller Than in Recent Years
Processed food exports continued to grow in 1996, but the 2.5% rate was below the average annual growth of 9.3% for the previous 5 years.
Poultry processing registered the largest dollar value increase of the 49 industries - $488 million over the level in 1995 (table 1). Poultry exports have been among the fastest growing in recent years, averaging a 31% growth per year for the past 3 years. With exports valued at $2.6 billion in 1996, poultry surpassed fish and seafoods as the number two U.S. processed food export industry behind meatpacking meatpacking or meat-processing, wholesale business of buying and slaughtering animals and then processing and distributing their carcasses to retailers. The livestock industry is among the largest in the world. , the clear export leader ($6 billion in exports in 1996). Poultry exports to Russia alone rose from $84 million in 1993 to $914 million in 1996, accounting for 35% of U.S. poultry exports. Other major consumers of U.S. poultry include Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Japan, and Mexico.
Six other industries had export gains of more than $100 million in 1996: salted and roasted nuts, miscellaneous food preparations, wet corn milling (oil, starch starch, white, odorless, tasteless, carbohydrate powder. It plays a vital role in the biochemistry of both plants and animals and has important commercial uses. , and high fructose fructose (frŭk`tōs), levulose (lĕv`yəlōs'), or fruit sugar, simple sugar found in honey and in the fruit and other parts of plants. corn syrup corn syrup
Sweet syrup produced by breaking down (hydrolyzing) cornstarch (a product of corn). Corn syrup contains dextrins, maltose, and dextrose and is used in baked goods, jelly and jam, and candy. ), soybean oil Soy´bean oil
n. 1. an oil obtained from the soybean (Glycine max), rich in protein, fats, sterols, and phospholipids, used as a food and in paints and varnishes and in various industrial applications; - , beverage flavorings and concentrates, and pet food. Wines, brandy, and brandy spirits had the largest percentage jump (34.1%) over its 1995 export value, and prepared flour mixes and doughs increased 27.9%. However, both of these industries are relatively small, with a combined value of only 1.5% of total U.S. processed food exports.
The top 3 exporting industries (meatpacking, poultry, and fish) were responsible for 37% of total processed food exports in 1996, while the top 10 industries accounted for two-thirds of U.S. exports.
The Netherlands, United Kingdom, and Germany are all among the top 10 markets for U.S. processed food exports, and U.S. exports have grown substantially to each of these countries during the 1990's (table 2). Germany is new to the top 10 this year, replacing China. The value of U.S. processed food exports to Germany grew 22.7% in 1996, reflecting big increases in nuts, wine, soybean oil, rice milling, and pet foods.
Among the top 10, the largest export growth was to Russia, a 32.4% increase over 1995, followed by Germany (22.7% increase), and then Mexico (21.6% increase). Major exports to Mexico include meat and poultry products, animal and marine fats and oils, wet corn milling products such as high fructose corn syrup, and soybean oil milling products (soybean oil, cake, meal, and concentrate). The large export growth to Mexico comes on the heels of a 31% decline in 1995 due largely to the peso devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. in December 1994, which made U.S. imports more expensive for Mexican consumers. Beginning in 1996, the Mexican economy began recovering, with gross [TABULAR tab·u·lar
1. Having a plane surface; flat.
2. Organized as a table or list.
3. Calculated by means of a table.
resembling a table. DATA FOR TABLE 2 OMITTED] domestic product (GDP GDP (guanosine diphosphate): see guanine. ) growing over 5%, making food imports from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. more affordable.
Eighteen of the 49 processed food industries had lower exports in 1996 than in 1995, and another 12 had growth rates Growth Rates
The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures.
Remember, historically high growth rates don't always mean a high rate of growth looking into the future. below the average annual growth of exports for the previous 5 years. Only two of the industries with yearly exports over $1 billion suffered declines - meatpacking (which includes shipments from both beef and pork packing plants packing plant
a complete meat production unit including facilities for slaughtering animals, processing of meat and offal, boning out, making up of blocks of carcasses, chilling, freezing, storing of the meat, preparation of by-products. ) and fresh/frozen fish and seafoods. However, because meatpacking is the largest U.S. export industry, even its small decline of 1.5% amounted to a $92 million decrease. Nearly all of this decline was due to lower beef exports to Japan, South Korea, and Taiwan due to concerns over the possibility of pathogens in meat and other food safety concerns and the strength of the dollar against the South Korean won Noun 1. South Korean won - the basic unit of money in South Korea
South Korean monetary unit - monetary unit in South Korea
chon - 100 chon equal 1 won in South Korea . The decline in fresh/frozen fish and seafood was even more sizable, $230 million, as fish and seafood exports to Japan declined for the same reasons as for beef.
Although Japan continues to be the largest export market for U.S. processed foods, with 24% of total 1996 processed foods exports, the value of U.S. shipments to Japan fell 4.6% in 1996. U.S. food exports to three other Asian trading partners (South Korea, Taiwan, and China) fell as well between 1995 and 1996. Shipments to China fell 14.9%, due primarily to a decline in purchases of soybean oil.
Among the top 50 destinations, the largest percentage growth by far was to Latvia, a 267% increase over 1995 totals. Much of this increase likely was resold to Russian merchants. Finland was second, with an 86% increase, followed by Israel at 54%. The largest declines among the top 50 were to Algeria, down 61.5%; Brazil, down 41.6%; and Egypt, down 27.6%.
Strong U.S. Economy Boosts Imports
The strong import growth was largely due to rising U.S. per capita incomes Noun 1. per capita income - the total national income divided by the number of people in the nation
income - the financial gain (earned or unearned) accruing over a given period of time and the high value of the dollar against many of the world's major currencies. Inflation-adjusted incomes of Americans rose an average of about 2% in each of the last couple of years, while in 1996 the dollar rose about 16% against the Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation).
“JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. and 5% against the German mark. As the U.S. dollar appreciates, imported goods become relatively less expensive for U.S. consumers.
Imports for 33 of the 49 food industries increased by 10% or more in 1996 (table 3). Many of these industries, however, started from a fairly small base. For example, imports of prepared flour and flour mixes increased 50% from $40 million to $60 million, while ice cream imports also increased 50% from $2 million to $4 million. Of the larger industries, cane sugar cane sugar: see sucrose. became a billion-dollar import in 1996, as a result of a 57.7% increase over 1995 import levels. The United States increased sugar import quotas Import quotas are a form of protectionism. An import quota fixes the quantity of a particular good that foreign producers may bring into a country over a specific period, usually a year. The U.S. government imposes quotas to protect domestic industries from foreign competition. in 1996 due to poor sugar beet sugar beet, variety of beet used commercially as a source of sugar.
Variety of beet (Beta vulgaris) that accounts for about two-fifths of global sugar production, making it second only to sugarcane as a source of the world's sugar. crops in 1994 and 1995. Cane sugar imports came primarily from the Dominican Republic Dominican Republic (dəmĭn`ĭkən), republic (2005 est. pop. 8,950,000), 18,700 sq mi (48,442 sq km), West Indies, on the eastern two thirds of the island of Hispaniola. The capital and largest city is Santo Domingo. , Brazil, Australia, Guatemala, and the Philippines. Cane sugar also registered the largest dollar value increase in imports of all 49 industries, going from $760 million in 1995 to $1.2 billion in 1996.
Chocolate and cocoa products ($1.4 billion in imports) and wines, brandy, and brandy spirits ($1.7 billion) also had large percentage increases, 26.6% and 23.0%, respectively. Major sources of chocolate and cocoa imports were Ivory Coast Ivory Coast: see Côte d'Ivoire. , Canada, and Indonesia.
Other billion-dollar import industries with double-digit import growth included vegetable oil ($1.5 billion, up 18.7%), canned fruits and vegetables ($1.7 billion, up 15.1%), malt beverages Malt beverage is an American term for both alcoholic and non-alcoholic fermented beverages, in which the primary ingredient is barley, which has been allowed to sprout ("malt") slightly before it is processed. ($1.3 billion, up 12.5%), miscellaneous food preparations ($1.1 billion, up 11.7%), and distilled and blended liquors ($1.7 billion, up 10.6%).
Imports fell in 1996 for only two processed foods industries - fresh/frozen fish and seafood, and sausage and other prepared meats. As with exports, imports are highly concentrated, with the top 3 industries - fish, meatpacking, and canned fruits and vegetables - accounting for [TABULAR DATA FOR TABLE 4 OMITTED] 35% of U.S. processed food imports (while the top 10 account for 71%). Three of the top 10 industries were meat and fish products industries, accounting for 33% of total U.S. processed food imports, and three were alcoholic beverages
Canada dominates as a source for U.S. processed food imports (table 4). The United States imported $5.7 billion in foods and beverages from Canada in 1996, more than one-fifth of total U.S. processed food imports. This was more than three times as much as the United States imported from Mexico, the second leading source country. Leading imports from Canada are red meat products, fresh/frozen fish, vegetable oils <onlyinclude> This list of vegetable oils includes all vegetable oils that are extracted from plants by placing the relevant part of the plant under pressure to extract the oil. , distilled liquors distilled liquor
Alcoholic beverage obtained by distillation from wine or other fermented fruit juice or from various cereal grains that have first been brewed. The essential ingredient is usually a natural sugar or a starchy substance that may be easily converted into a , and chocolate products. Primary imports from Mexico include fresh/frozen fish, malt beverages, frozen fruits and vegetables, and distilled liquors. Thailand, France, and Italy are also billion-dollar import sources. The United Kingdom, The Netherlands, Brazil, New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , and Australia round out the top 10 source countries. These 10 countries supplied 57% of U.S. imports of processed foods. Only two countries in the top 10 - Thailand and Australia - reduced their shipments to the United States.
Among the top 10 countries, Brazil and Italy were the fastest growing import sources, with 23.4% and 21.9% increases over 1995 import totals, respectively. The largest imports from Brazil were frozen fruits and vegetables, cane sugar, salted and roasted nuts, and chocolate and cocoa products. Italy was a major source of wine, vegetable (mostly olive) oil, cheese, and pasta. Among the top 50 import sources, the leading growth countries were Ivory Coast, Bangladesh, and Guatemala, at 97%, 67%, and 63%, respectively.
Imports Provide Enhanced Variety
In 1996, U.S. consumers spent $27.8 billion on processed food imports - approximately $1 on imports for every $24 spent on domestic foods. There were 11 food processing industries where U.S. consumers spent at least $1 billion on imported products.
Many groups, including the news media, trade associations, and public officials, extol ex·tol also ex·toll
tr.v. ex·tolled also ex·tolled, ex·tol·ling also ex·toll·ing, ex·tols also ex·tolls
To praise highly; exalt. See Synonyms at praise. the employment and income benefits of exports, while downplaying or even attacking imports. Exports provide additional employment opportunities for U.S. workers and allow some firms to lower costs by achieving greater economies of scale. However, imports also serve a useful function in any economy, and provide numerous benefits to consumers. Trade is a two-way street. Importing food from other countries, especially developing countries, strengthens their businesses and economies and also provides needed cash to use in buying foreign products.
Food imports increase the domestic supply of that product, thereby lowering the domestic product price and increasing domestic consumption. Domestic consumers benefit from the lower prices. They also enjoy a more stable supply of the product, since imports can fill gaps created by shortfalls or seasonal lulls in domestic production.
Some food imports are used as ingredients in the production of other foods in the United States. For example, cocoa is not produced in the United States, but is imported in large quantities to make chocolate and chocolate products.
Some domestic producers (and their employees) are hurt by import competition. Naturally, domestic producers facing foreign competition will want to maintain their market share and may search for ways to lower their production costs, typically through cost-cutting measures, increased productivity, or by importing inputs and ingredients at lower costs than on the domestic market.
Imports provide consumers with a greater variety and range of choice. Many consumers are willing to pay a higher price for an imported product that is a near-perfect substitute for a domestically produced good, simply because they want a change. Americans consume Danish hams, French wines, and Swiss chocolates Swiss chocolates, together with their timepieces and machinery, have earned a reputation for high quality abroad.
Chocalate came to Europe in the 16th century. By the 17th century it was produced in Switzerland. , even though Smithfield, Gallo, and Hersheys are major domestic producers and exporters of similar products. And, many U.S. consumers purchase imported beers, even though the U.S. brewing industry is large and comparable beers are available. U.S. beer imports amounted to $1.34 billion in 1996. However, with $435 million in exports, beer also ranked as one of the stronger processed food export industries (ranking 18th out of 49 industries).
Having both exports and imports within similar industries is a common phenomenon for processed foods and beverages. Meatpacking, prepared fresh/frozen fish and seafood, and canned fruits and vegetables are on the top 10 list for both exports and imports. Several other industries had record exports and imports simultaneously in 1996, including: natural processed cheese; cookies and crackers; frozen bakery products; wet corn milling; pet food; candy and confections; chocolate and cocoa; salted and roasted nuts; wines, brandy, and brandy spirits; beverage flavorings and concentrates; roasted coffee; and pasta.
Import and export flows within the same industry show how the processed food sector is truly a global market, with consumers in many countries enjoying each others' bounty bounty, payment made by a government
bounty, amount paid by a government for the achievement of certain economic or other goals. It often takes the form of a premium paid for the increased production or export of certain goods. . Consumers benefit not only from a wider array of products, but also from greater rivalry among sellers. This enhanced rivalry in turn encourages product, production, and distribution innovations and efficiency, improved quality, and competitive prices.
Harris, J. Michael, and Margaret Malanoski. "U.S. Processed Foods Trade Surplus Over $4.5 Billion in 1995," Food Review, USDA's Economic Research Service, Vol. 19, Issue 3, Sept.-Dec. 1996, pp. 34-38.
Ruppel, Fred J., and J. Michael Harris Mike Harris or Michael Harris may refer to: