The exporters were willing to provide us detailed information on their contract decreases*—a willingness that reflects, we believe, the propriety attached to these practices in the volatile agricultural export business. About 20 percent of the quantities originally contracted for export in 1973/74 were eventually cancelled or deferred-an amount we feel is not surprising in light of the tumultuous market events of 1973/74. Reasons cited for the decreases include contracting for maximum rather than probable needs, overcontracting in anticipation of export controls, hedging to protect a market position, and disadvantageous price changes. More often than not, the exporters ascribe the decreases to the actions of buyers, and not to those of sellers.

Further analysis of the 1973/74 contract information revealed that basis contracts (those with no specifically stipulated price) were much more frequently decreased than fixed price contracts, and unknown destination contracts more often than known destination. About half of the 1973/74 decreases were against contracts made by exporters with their own affiliates. As a reliable indicator of a contract's chance of being fulfilled, however, the exporters lean more toward the exact destination than toward the pricing terms or buyer-seller relationship. In all, the survey demonstrates that exporters prefer the minimal necessary Government involvement in export markets. Were commodity shortages as severe as those in 1973 to recur, exporters would most likely favor a return to Prior Approval rather than stricter controls. If an allocation program were adopted. they might approve of one based on quotas by country or region. In the meantime, they seem to accept the monitoring of their sales for what it is-a way the Government can learn about commodity shortages before they occur and, if not avert them, at least soften the blow.

QUESTIONNAIRE SURVEY OF EXPORTERS' ATTITUDES TOWARD USDA'S EXPORT REPORTING SYSTEM

CHAPTER 1-INTRODUCTION

Under the Agriculture and Consumer Protection Act of 1973, the Department of Agriculture was required to assume the responsibility for monitoring the export sales of agricultural commodities. U.S. agricultural supplies had been severely strained that year, in part by the accelerating rate of exports. The Export Sales Reporting System (ESRS), as the monitoring has come to be known, provides information on future export demand, so that in the event of shortages thoughtful Government planning can replace precipitate market intervention.

All firms exporting U.S. origin wheat, feed grains, cotton, and oil seeds are required to submit weekly reports to USDA on their export activity, including among other things information on actual exports and outstanding (forward) sales. The Office of the General Sales Manager at USDA is responsible for the administration of the Export Sales Reporting System and each week compiles the information submitted by the exporters and publishes it in the "U.S. Export Sales" report.

We surveyed agricultural exporters to determine their attitudes and opinions on the Export Sales Reporting System and on other past, present, and potential short-supply management systems. The survey was conducted through the use of a questionnaire that was mailed in the summer of 1975 to 316 businesses that had filed export sales reports with USDA. Forty-six (46) of these businesses, however, were subsidiaries whose parent corporations answered for them, or were no longer active in the agricultural export business. Of the remaining 270 exporters, 195 (or 72 percent) returned completed questionnaires acceptable for analysis. These 195 respondents were found to represent, in terms of sales and exports, almost all of the agricultural export industry.

CHAPTER 2- DESCRIPTION OF THE EXPORTERS

This chapter describes the 195 exporters that participated in our survey. In so doing, it also describes to a large extent the entire agricultural export industry, since the firms surveyed account for almost all of the agricultural commodities exported by the U.S. in 1973 and 1974. The agricultural export industry is a concentrated one, we found, with relatively few firms doing most of the business. The

*Cancellations, modifications, and delivery deferrals.

firms range in size from a small exporter with export sales of only $35,000 to a large multinational firm with export sales of $3.7 billion.

Organization of Exporters

Although some of the firms in our survey have been in the export business since the late 1800's and early 1900's, about two-thirds of the firms appear to have entered the agricultural exporting industry during the past 25 years. The following table shows how 175 exporters responded to a question on this matter.

Although we have no knowledge of the frequency with which firms go in or out of the export business, about a third of those responding have entered since 1965-possibly drawn to exporting by the increased demand for U.S. agricultural commodities over the past decade.

The exporters in our survey were found to range from small firms exporting less than 100 metric tons of a single agricultural commodity (or with no exports at all) to multinational companies dealing heavily in a variety of commodities. In answer to a question concerning their organization, most of the 193 respondents identify themselves as private corporations (123 firms), a small group public corporations (31 firms) and the remainder either partnerships (8 firms), sole proprietorships (7 firms) or some other form of business (24 firms). Although we did not determine how many of the firms are U.S.-owned, 37 of the exporters say they are subsidiaries or affiliates of foreign-based companies.

Pursuing the parent-subsidiary relationship, we found that one third (70) of the surveyed exporters are a subsidiary or affiliate of another company. Sixtysix (66) of the firms, furthermore, indicate that they export origin agricultural commodities to parent, subsidiary, or affiliate organizations. The latter were identified mostly as merchants, processors, or traders located in the European Community, Japan, or Canada.

Export Sales1

The exporters were asked to approximate the dollar value of all the U.S. origin agricultural commodities they exported (i.e., export sales) during calendar year 1973 and 1974. Although a number of firms gave no sales information (34 for 1973 and 36 for 1974), the rest estimate sales totaling $18.6 billion and $23.2 billion in 1973 and 1974, respectively. We compared these figures to published ones on the total 1973 and 1974 dollar value of all U.S. agricultural exports, so that we could measure the sales volume of the firms on which we did not obtain data. The published figures are $17.7 billion and $22.0 billion for 1973 and 1974, respectively, suggesting that most major exporters are included in our survey.

The 1974 sales figures indicate further that the agricultural export industry is a concentrated one, with relatively few firms accounting for a substantial share of the business. In addition to the 36 firms who did not identify their 1975 export sales, 11 firms reported zero sales. Of the remaining 148, however, just 7 firms (only 5 percent) account for 62 percent of the total sales for the group as a whole. The 75 smallest, or 51 percent of the 148 firms, on the other hand, have less than 1 percent of the total sales. The following table shows 1974 export

1 The term "sales" refers here and in later sections to the dollar value of agricultural commodities actually exported.

Foreign Agricultural Trade of the United States, September 1975, USDA.

We are unable to explain why the surveyed firms claim export sales in excess of the total U.S. export value beyond ascribing the discrepancy to exporter overestimates, USDA underestimates, or a combination of the two.

sales by sales categories and the number of firms, total sales, and average sales in each category.

In the analysis of the questionnaire we frequently make use of the terms "large", "medium", and "small" exporter. These designations evolved from the above table and refer to firms with 1974 sales of $500 million and more, between $10 and $500 million, and of $10 million and less, respectively. The 11 large exporters captured about 74 percent of the total sales for all surveyed firms and are, for the most part, multinational corporations dealing in a wide variety of agricultural commodities.

Commodities Exported

We asked the exporting firms for their 1973/74 export totals in wheat, corn, rice, soybeans, cottonseed, soybean oil, cake and meal, and cottonseed oil, cake and meal. We found that, as with sales, the exports were frequently concentrated in the hands of a few large companies. The seven commodities are presented in the following table with the number of firms that dealt in them, the total exports claimed, and corresponding USDA figures for the industry as a whole.

As with 1974 export value (sales), some survey export figures exceed comparable USDA figures for the industry as a whole. A Department of Agriculture official has indicated that USDA 1973/74 data on agricultural exports came in part from the newly established Export Sales Reporting System, in whose early months accuracy was questionable. The sizes of the discrepancies, however, lead us to believe that the surveyed exporters may have overestimated their 1973/74 exports to some extent also.

Using the 1973/74 export information provided by the exporters, we assigned each of the 195 firms to a primary export commodity group. For these purposes, cottonseed and cottonseed oil, cake and meal were combined, as were soybeans and soybean oil, cake and meal. We wanted to see whether exporters in different commodities would respond to questions in different ways. Where 1973/74 export information was lacking, we turned to 1974/75 data obtained from USDA for the classification. A primary commodity was assigned to a firm if better than two-thirds of its exports in one of the years were of a single commodity. Otherwise the firm was designated "multi-commodity”. (Nine of the very large exporters are in this category.) Some of the exporters in our survey proved to be

inactive in all five commodity groups and were classified as such. The following table shows the primary commodity exported for the firms in our survey and the total 1974 export sales for each commodity group.

The exporters were also asked to provide a percentage breakdown of the mode of shipment for their export sales. The following table shows the volumes of seven major commodities exported in the 1973/74 marketing year and the percent exported by mode of shipment for the firms who completed this question.

More than half of the 1973/74 exports of wheat, corn, cottonseed, soybean oil, cake and meal, and cottonseed oil, cake and meal were F.O.B. Almost half of the soybeans also went F.O.B., while rice was most frequently sold F.A.S. On the whole, about two-thirds of the exports for all seven commodities went F.O.B.

CHAPTER 3-EXPORTER ATTITUDES AND OPINIONS ON THE EXPORT SALES REPORTING SYSTEM

A majority of the exporting firms believe that the U.S. Government needs an export sales reporting system. Most of the exporters feel that the present Export Sales Reporting System has met the provisions of the Act that established it and has, to at least a moderate degree, achieved its objective of providing accurate, timely, and reliable export statistics. The firms have had few problems in complying with the reporting regulations and requirements, and most of them receive and use the weekly U.S. Export Sales reports. Despite their belief that the Export Sales Reporting System has not affected their own sales, the exporters generally feel that the publication of the export reports has to some extent influenced agricultural commodity prices and has given at least a minor advantage to foreign buyers in export contract negotiations. Most exporters believe the U.S. Export Sales reports would be more useful if additional information on contract destinations, decreases, and shipment dates were included.

General Comments On Export Sales Reporting System

The Export Sales Reporting System (ESRS) is intended to monitor the amount of agricultural commodities being exported so that, in the event of

shortages, the U.S. Government will have on a timely basis the information required to formulate necessary decisions. The exporting firms were asked how they feel about the U.S. Government's need for an export sales reporting system. Almost 70 percent of the firms believe a reporting system is needed, while 15 percent say it is not. None of the large exporters (those with 1974 export sales above a half billion dollars) is among the 15 percent. The firms' responses follow:

USDA's Export Sales Reporting System was established under Section 812 of the Agriculture and Consumer Protection Act of 1973. The exporters claim a good understanding of the Act's provisions and generally feel that ESRS has met those provisions. The exporters' responses to a related question are presented in the following table.

The exporters were asked to what degree they believe the Export Sales Reporting System has achieved its stated objective of providing accurate, timely, and reliable export statistics. Most of the exporters who answered (74 percent) believe the System has achieved that objective at least to a moderate degree. The other 26 percent claim the achievement has been minimal at best.

Because the Export Sales Reporting System represents an entry of the Federal Government into the private sector, the exporting firms were also asked for their primary perception of the System as it is presently operated. About 41 percent of the firms responding view the System primarily as a means to provide the U.S. more information on foreign demand and export commitments. In a similar vein, 17 percent perceive it mainly as an improvement of the Government's system for forecasting exports. Twenty-two (22) percent see ESRS as a first step toward a comprehensive Government short-supply management system, while 14 percent term it a Government activity of marginal utility. These perceptions were found to be unrelated to the firms' sizes or commodities exported. Administration of the Export Sales Reporting System

A certain amount of work is required of exporting firms in providing information to USDA on their weekly export sales activity. In addition to the basic "Report of Export Sales and Exports" form, which they must submit each week that they have some activity in exports, there are three other report forms that are filled out at varying times. To guide the exporters in completing the report forms, USDA issued regulations and instructions for the reporting system. We asked the exporting firms to evaluate these regulations, and instructions in terms of clarity, format, indexing, and comprehensiveness. The majority of the exporters indicate that they have little or no problem in any area.

Similarly, we asked the exporters to rate the export report forms themselves, in terms of the language, format, response space, measurement conversions, the