U.S. FARM EXPORTS FORECAST AT 8% ABOVE 2014’S RECORD
According to the USDA forecast, exports during this fiscal year would be $11.7 billion, or nearly 8%, larger than the record set in 2014 at the crest of a multiyear commodity boom.
Thanks to high demand for American-grown corn, soybeans, and meat, U.S. farm exports will soar to a record $164 billion this year, far above the current mark of $152.3 billion, set in 2014, said the Agriculture Department on Wednesday. China, reclaiming its spot as the No. 1 customer, would account for $1 of every $5 in overseas sales.
Global recovery from the pandemic, with China’s economy expected to grow by a torrid 8.2% this year, is driving up both commodity prices and export tonnage — a double benefit for U.S. producers, said USDA analysts. They forecast U.S. economic growth at 5.8% this year, the highest rate in nearly four decades and much stronger than their previous estimate of 4% growth.
Agriculture Secretary Tom Vilsack said U.S. agricultural trade was “extraordinarily resilient in the face of a global pandemic and economic contraction.” It also showed U.S. trading partners “are responding to a return to certainty and reliability” in U.S. policy, he said.
“Demand for U.S. agricultural products has led to record levels of corn and soybean exports to China,” said the USDA in a quarterly export forecast. There are signs the boom in commodity prices that began last fall is due in part to supplies that are tight in the near term but expected to ease in the future, said the analysts. They said the U.S. dollar was expected to weaken this year, “which is likely to continue to support higher commodity demand and prices into next year.”
The USDA raised its estimate of corn, soybean, and meat exports by a combined $6.3 billion from its previous forecast, made in February. Corn and soybean export tonnages would be the largest ever. The estimate for pork exports was raised to $7.2 billion, up by $400 million. Exports of dairy products were forecast to be $500 million higher, and beef and poultry exports were raised by $200 million each.
“The export forecast for China is raised $3.5 billion to a new record high of $35 billion,” said the quarterly forecast. “Six months into the fiscal year, U.S. shipments of soybeans, corn, tree nuts, beef, wheat, and chicken paws have remained at record levels, while total U.S. agricultural exports to China reached $22.2 billion, 179% higher than the same period last year.” Unprecedented amounts of U.S. corn await shipment to China.
According to the USDA forecast, exports during this fiscal year would be $11.7 billion, or nearly 8%, larger than the record set in 2014 at the crest of a multiyear commodity boom. Sales shrank to $129.6 billion in 2016 amid a global glut. A nascent recovery in 2018 was squelched by the Sino-U.S. trade war, which led to a 5% decline in exports. The two nations agreed in January 2020 to de-escalate the dispute, though it has not yet been resolved.
Ag exports to China fell to $10.1 billion during the worst of the trade war, roughly half its usual level beforehand. If the projections are realized, Chinese purchases of U.S. farm goods this year would be twice as large as last year. Still, they would not hit the target set in the “phase one” agreement of 2020 for China to import $43.6 billion worth of U.S. food, agriculture, and seafood products.
Soybeans are the most lucrative U.S. farm export. The USDA pegged sales at $28.9 billion this year, compared with $17.9 billion in fiscal 2020. “Soybean export volumes are forecast at record levels due to surging demand from China,” said the USDA. “Tight U.S. stocks are driving prices higher.”