U.S. Ag Exports Rebound From Slump, Tie for Third Largest Ever
U.S. farm exports will total $139.8 billion this fiscal year, the third-highest tally ever and ending a slump in sales that begin in 2014 following the collapse of the commodity boom, the USDA estimated in a quarterly report. In its first forecast for fiscal 2018, the USDA pegged exports at $139 billion.
Ag exports generate roughly one third of cash receipts to U.S. farmers and ranchers. Farm exports are also a bright spot in the U.S. balance of trade, consistently registering a surplus.
The Trump administration is giving priority to elimination of trade deficits in negotiations over NAFTA. Mexico and Canada are the two leading sources of U.S. food and ag imports. Mexico is forecast for a $4.3 billion agricultural trade surplus and Canada a $600 million surplus during fiscal 2018, which begins on October 1. The surpluses are similar to 2017’s levels.
U.S. ag exports hit a record $152.3 billion in fiscal 2014 and declined to $139.8 billion in fiscal 2015 and then to $129.6 billion in fiscal 2016. The 2015 and 2018 totals are the third highest on record, behind $141.1 billion in fiscal 2013 during the closing days of the commodity boom and 2014’s record.
Strong economic growth globally and a 7% decline in the value of the dollar aided this year’s sales recovery, said USDA. The dollar is expected to trend lower in value for the rest of 2017. “The weaker dollar primarily reflects improvements in the economic outlook of key U.S. trading partners, particularly Europe and Japan,” said USDA. China is the largest customer for U.S. farm goods, followed by Canada, Mexico, the EU, and Japan. The top five markets buy 62% of U.S. farm exports; the EU and Japan take 17% of sales.
Throughout fiscal 2017, USDA raised its export estimate, initially $133 billion, as conditions brightened. The current estimate is up by $1.2 billion from May, with corn, wheat, soybean, and cotton sales on the rise.
Soybean exports are forecast for a record 60.6 million tonnes worth $23.9 billion in fiscal 2018. Corn exports are forecast to decline slightly due to large crops in South America. Cotton exports also are expected to drop “as higher stocks outside China will limit U.S. export opportunities,” said the USDA.