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USDA raises export forecast for China by $4 billion
WASHINGTON, D.C. -- China will buy $14 billion of U.S. ag products this year, $3 billion more than forecast before the Phase One agreement was signed, said USDA Chief Economist Rob Johansson on Thursday.
Johansson provided few details of the forecast, the first by USDA about the effects of the agreement, which obliges China to buy $40 billion a year of U.S. food, agricultural, and seafood products this year and in 2021.
The USDA updates its estimate of ag exports this fiscal year to $139.5 billion, a $500 million increase from its November assessment and up by $4 billion from fiscal 2019.
“Nearly all of that projected increase (is) due to higher projected exports to China,” said Johansson in a speech that opened USDA’s annual Ag Outlook Forum. “With the Phase One deal in place, we would expect a larger share” of pork imports by China, which lost a quarter of its pork production in 2019 to an epidemic of African swine fever, “to be filled by U.S. exporters,” said Johansson.
Johansson said USDA projects plantings this year of 94 million acres of corn, 85 million acres of soybeans, 45 million acres of wheat, 12.5 million acres of upland cotton, and 3.1 million acres of rice. The soy, cotton, and rice figures are higher than previously projected by USDA, and the corn figure is 500,000 acres lower.
Soybean prices will rise modestly for this year’s crop, said Johansson, "under the expectation of a return to normal trade with our major trading partners.”
The USDA projects record meat and dairy production this year.
Before the Sino-U.S. trade war, China was the largest customer for U.S. ag exports with purchases of around $21 billion a year.
Agriculture Secretary Sonny Perdue said he expected Chinese purchases would "start...ramping up in the spring" when asked about the disparity between the new USDA estimate and the Sino-US agreement. "We do believe those numbers will be surpassed." Johansson said the $14 billion forecast was based on published descriptions of the agreement.