Increases in livestock, grain/feed and cotton exports resulted in a $1.0 billion increase in the latest agriculture exports forecast, according to the latest U.S. Department of Agriculture’s (USDA) “Outlook for U.S. Agricultural Trade.” Fiscal year 2017 agricultural exports are now projected at $137.0 billion.
USDA left the U.S. agricultural imports forecast unchanged from the February forecast at $114.5 billion, which is above their total value in fiscal year 2016. U.S. agricultural trade surplus is expected to increase $1 billion to $22.5 billion.
U.S. grain and feed exports in fiscal 2017 are now forecast at $29.0 billion, up $400 million from the February forecast, driven by a larger volume for wheat and higher unit values for rice. USDA lowered the forecast for exports of coarse grains by $100 million from the previous projection to $10.3 billion, as corn is forecast down $100 million to $9.4 billion based on lower volume. “Record exportable supplies of corn in South America are expected to erode U.S. competitiveness this summer,” USDA said.
DDGS exports to Mexico, Turkey, South Korea, and Thailand have strengthened, which USDA said has more than offset the decrease in exports to China following that country’s imposition of punitive duties on DDGS from the U.S.
The oilseed and oilseed product exports forecast was raised to $31.7 billion in fiscal 2017, up $100 million from the February forecast, mainly due to increased soybean products trade. The soybean export value is expected to be unchanged at $22.6 billion, while soybean meal and soybean oil are expected to see gains in export value.
“The generally stronger Brazilian real and Argentine peso so far this year has supported U.S. competitiveness in the soybean and products markets,” USDA said. However, Brazilian soybean exports are ahead of last year’s pace due to increased sales to China.
USDA also increased its forecast for U.S. wheat exports to $6.2 billion on larger volumes despite lower unit values.
“Volume is up based on strong exports in recent months, particularly to Mexico. Unit value is down slightly on weaker new-crop prices. The size of the upcoming U.S. wheat crop is still forecast to be smaller than last year’s, but abundant carryin supplies in the United States and other exporting countries are expected to restrain prices.”
USDA increased the livestock, poultry, and dairy exports forecast by $600 million to $28.7 billion, almost entirely due to higher anticipated shipments of red meat and products.
Beef exports were raised $200 million to $6.0 billion and pork exports were raised $400 million to $5.4 billion, which USDA said was due to growth in export volumes to several countries in Asia and Mexico.
Variety meat exports were forecast $100 million higher to $1.9 billion due to a surge in shipments to Hong Kong and China, USDA said.
“Lard, tallow, and grease shipments continue to benefit from robust global demand, driving volumes higher.”
USDA added that greater volumes of live animal shipments are expected.
U.S. exports of poultry and poultry products were forecast $100 million lower to $4.7 billion, which USDA said resulted from lower unit values for broiler meat.
On the dairy side, USDA said that while dairy exports have been growing in volume, the dairy export forecast was lowered slightly by $100 million this month to $5.4 billion as forecasted prices for such key commodities as nonfat dry milk and cheese have been reduced.
Global picture
World per capita GDP growth is expected to reach 1.6% in 2017, compared with 1.2% in 2016. USDA said this increase reflects a broad-based upswing in the world economy across both developed and developing countries. Growth in global trade volume, which was 1.8% in 2016, is expected to rebound to 5% in 2017. Year-to-year trade growth of 5% in February was the fastest since 2011, USDA noted.
The dollar has begun to weaken, after a 4% increase between October 2016 and January 2017. USDA said it is expected to trend weaker by almost 2% in 2017, but will remain strong relative to the period before the dollar’s dramatic strengthening at the end of 2015.
“The weaker dollar reflects improvements in the economic outlook of key U.S. trading partners and reduced expectations for fiscal stimulus in the United States,” USDA added.
In addition to the GDP growth and the weakening dollar, USDA said oil prices are also expected to remain stable in 2017.