The U.S. Department of Agriculture (USDA) has updated its quarterly forecast for agricultural exports, projecting a record $108.5 billion for fiscal year 2008.

The projection is a $7.5-billion increase from February’s previous record forecast and $26.5 billion above the final 2007 exports.

“America’s increased export volume in bulk commodities like corn, other animal feeds and soybeans make agriculture the bright spot in the overall balance of trade,” says Agriculture Secretary Ed Schafer. “U.S. producers are on track to export a record 63 million tons of corn, and set new export volume and value records for pork.”

USDA also raised the pork export forecast to 4.3 billion pounds, more than 37% above export volumes last year. That estimate is based on three factors: a low-valued dollar, plentiful U.S. pork supplies and strong Chinese demand due to reported disease losses of 40 million head and a reported 69% hike in pork prices.

The pork export forecast for 2009, at just below 4 billion pounds, is 7.5% below export expectations for 2008. That reflects the belief that China’s ability to improve its animal health will reduce the need for imported pork.

On the import side, USDA says U.S. packers and feeder pig finishers are expected to set another record by importing 10.4 million head of hogs this year, 5.4% above the previous record number of 10 million head, which was set in 2007.

Next year, live swine imports are projected to drop almost 9% to 9.6 million head.

That reduction in live swine imports from the second half of 2008 through 2009 will be due largely to the contraction of the Canadian hog industry. Agriculture Canada reported 4.58% fewer sows and bred gilts on April 1, 2008, continuing the country’s slow contraction, which began in April 2005. Last month, the major pork-producing province of Ontario showed a decline in its breeding herd of almost 8%, according to USDA.