U.S. agricultural exports have been sluggish since the Asian financial crisis in 1996, but recent signs point to some improvements. Trade with our NAFTA partners - Canada and Mexico - has grown rapidly over the last few years. The two countries’ proximity to the U.S., combined with a rising standard of living, should continue to boost export demand for agricultural products.

     Kendall McDaniel, an associate economist at the Center for the Study of Rural America, examines the agricultural export market in July’s edition of The Main Street Economist. The Main Street is published by the Center, which is based at the Federal Reserve Bank of Kansas City.

     McDaniel notes two promising developments on the export horizon: a weaker dollar should make U.S. exports more competitive in global markets, and rising incomes in developing countries could spur demand for U.S. high-valued products, creating profitable niches for some producers.

     Although the outlook may be more promising than in recent years, the author writes that sustained improvement in U.S. agricultural exports will require overcoming trade barriers and food safety concerns that have hampered exports to Europe and Asia.

     McDaniel’s article, as well as past issues of the Main Street Economist, is available on the Bank’s web site at  www.kc.frb.org.

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