1-4 September, 2006 Pragati Maidan, New Delhi, India
    Uncle Sam to buy his groceries abroad.
US takes a liking to foreign food.


Uncle Sam is shopping for delicious foods overseas, fierce competition is now pushing his own products off the shelf. Americans are predicted to spend more on buying wine, beer, fruits, vegetables and beef from the rest of the world this year, than they earn from selling soya, corn and wheat. This is happening after a gap of forty years and the real reason being better economic conditions, resulting in increased purchasing power.

The Americans are now enjoying processed foods like wine, cheese, beer, exotic veggies, olive oil and nuts. Also on their favorites list is foreign biscuits, wafers, chocolates and noodles. This change in menu has resulted in US agricultural import of $56 billion match its exports for the first time since 1950.

The demand for premium products like wine and beer is increasing by the day. Especially, this increase contributes to the rising share of processed food product in the import market. Population and higher income clubbed with weaker dollar and higher transportation cost are the reasons this change is taking place.

The US now hopes that the lower purchasing power of the dollar will result in decreased consumption of expensive foods, but their higher prices will keep pushing the US agri bill up.
On the other hand, lowered prices for grains, oil seed and cotton seeds and large US and foreign crops together with increased foreign competition, have combined to reduce forecast fiscal ’05 agricultural exports to $56 billion.

In the recent years the country has seen increasing competition from Brazil, Argentina, Australia, Ukraine and Kazakhstan. Globalization has increased the opportunity for the multi national agri business to lend their expertise to the producers in these countries bringing about increase in production an often lowering transaction costs.

The collective result is this that the lofty 80% share of US in the soybean world market has decreased to a mere 35%. The corn exports for the ’05 fiscal are expected to be 86% of its ‘79 peak. The wheat exports have already decreased by 46% since the last 22 years.

After years of declaring that can beat anyone when it comes to growing cheap, the Americans are discovering that foreign farmers might still give them a run for their money.

Date: 24-Dec-2004

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