USDA: US agricultural exports may face $3bn drop in 2019
The US Department of Agriculture (USDA) released projections for feed grain and agricultural exports looking at the fiscal year 2019 in a report at the end of last year.
Overall, exports for 2019 were forecast to be $141.5bn – a decline of $1.9bn from fiscal 2018, said report authors Bryce Cooke and Hui Jiang. The projection also was a drop from predictions made in August of 2018.
Reduction in exports of soybeans and cotton account for much of the forecast drop in export trade, they said.
“Soybean export volumes are down because of declining Chinese purchases from the United States as a result of trade tensions, and as a record US crop continues to pressure soybean prices lower,” they added.
However, predictions for exports of feed and grain were more favorable and were anticipated to increase by $700m to about $33.8bn. The growth in exports was attributed to increases in corn and wheat volumes.
The forecast for total imports increased from previous predictions, however, totals continue to fall below imports set in fiscal year 2018, they said.
“Agricultural imports in fiscal year 2019 are forecast to increase to $127bn, $500m above the August forecast but $600m below the total value of imports in fiscal year 2018."
Feed, grain and ag exports
Total exports for feed and grains were predicted to increase during the 2019 fiscal year, said Cooke and Jiang.
Forecasts for corn exports grew $600m to a total of $11.8bn stemming from high export volumes as US corn remains price competitive.
However, predicted sorghum exports dropped to $500m based on losses in the market to China.
“Feeds and fodders are forecast at $7.7bn, unchanged as higher demand for distillers’ dried grains with solubles is offset by a lower projection for alfalfa,” they said.
However, wheat exports were anticipated to reach $7.5m – an increase of almost $2.5bn from fiscal year 2018, they said.
“Unit values are lower because of strong competition in recent months, especially from Russia,” the report authors said. “However, volumes are up based on expectations of improved US competitiveness later in the year, as Russia exports are forecast to slow and as Australia struggles due to drought-reduced supplies.”
Exports for oilseeds and some related products fell to $27.9bn, a decline stemming from the reduction in soybean export volumes along with unit values, they said.
“Record US soybean production continues to pressure soybean prices lower."
“Declining China soybean purchases from the United States have pushed US export volumes lower, and China is expected to source its soybean imports primarily from South America,” they said. “Soybean meal is higher on price competitiveness and tight supplies in Argentina.”
On the livestock side, export predictions dropped to $30.1bn based on a reduction in the demand for dairy and poultry products, they said.
“Beef is up $500m largely on higher unit values, as export volumes are fractionally higher,” said Cooke and Jiang. “Pork is up $100m as strong demand in Latin America and other emerging markets supports slightly higher export volumes.”
However, poultry and poultry products were anticipated to see a reduction in exports to about $5.1bn with weaker prices for turkey and eggs, they said. Similarly, projected dairy exports were reduced to $5.3bn.
Market highlights and trade partners
In Asia, projected trade with China saw a cut of $3bn, bringing overall exports to about $9bn, said Cooke and Jiang.
The total is the lowest since 2007 as China looks to source its imported soybeans from countries other than the US.
Exports to Japan were estimated to see an increase based on the demand for beef, while export trade with South Korea was forecast to be “robust” for corn and beef, they said.
“Taiwan is forecast $100m higher to $3.8bn – the same amount the United States exported in fiscal 2018 – on expectations of steady demand for bulk commodities such as soybeans and corn,” they said.
Looking at geographically closer trading partners, forecasts for Canada and Mexico predict export amounts increase to $21.5bn and $19.7bn, respectively, they said.
“Mexico is expected to remain the largest foreign supplier of agricultural goods to the United States, with Canada remaining the third-largest,” the report authors said. “The forecast value of Canadian agricultural products sold to the United States is boosted $100m to $23.6bn, with upward adjustments to US imports of confections and wheat more than offsetting reductions to vegetable oil.”
Anticipated exports to the EU could increase from levels set in 2018 to about $13.4bn, they said.
Fiscal year 2019 imports from the EU could climb to $23.8bn – and the group is expected to stay the US’s second largest provider of agricultural products.
Looking at Africa and the Middle East, exports were anticipated to climb to $5.4bn and drop slightly to $6bn, respectively, they said.
Additionally, US imports of livestock, poultry and pork products were reduced from earlier expectations, said Cooke and Jiang.
“Imports of grains and feed products are forecast to be $100m higher than the previous forecast and to equal $12.5bn due to projected increases in US demand for bulk items,” they said. “Wheat is expected to be up slightly due to the higher than expected pace of spring and durum wheat imports, largely from Canada.”
Forecasts for imports of oilseeds and oilseed products, however, dropped from previous expectations, they said.