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U.S. 2018 Ag Exports Seen Dropping 6%, USDA Report Says
U.S. agricultural trade for fiscal year 2018, is expected to drop $500 million from the USDA’s November forecast and $1.0 billion below last year.
In its Outlook for U.S. Agricultural Trade report Thursday, USDA pegged demand for ag products such as oilseeds and product exports to decline 6%.
Other highlights of Thursday’s report showed:
- Fiscal Year 2018 agricultural exports are projected at $139.5 billion, down $500 million from the November forecast, largely due to a 6% decline in oilseed and product exports that is only partially offset by increases in livestock, cotton, and grain.
- Oilseed exports are forecast down $2.0 billion to $31.1 billion as a result of slower soybean exports, mostly to China, and strong competition from Brazil.
- Livestock, poultry, and dairy exports are raised $800 million to $30.5 billion, led by higher forecasts for beef and pork
- Cotton is forecast up $600 million to $5.4 billion on substantially higher unit values.
- Grain and feed exports are forecast up $300 million to $29.7 billion, as gains for coarse grains, both corn and sorghum, more than offset a reduction for wheat.
Ag Imports Mixed
U.S. agricultural imports forecast at $600 million below fiscal 2017, but $1.5 billion above the previous fiscal 2018 projection, according to the USDA Report. Here are the highlights:
- Expected increases in imports of horticultural and grain and feed products are largely responsible for the upward adjustment in the forecast, but higher projected supplies of sugar and tropical products, and an expected increase in oilseed product imports also contributed to the change.
- In fiscal year 2018, fresh vegetable imports are expected to be $200 million larger than previously expected, due to larger volumes. Essential oil imports are expected to reach $3.6 billion in fiscal year 2018, a $100 million increase from the previous forecast, with high levels of shipments expected after a strong first quarter.
- Imports of grain and feed products are forecast to grow by $300 million from the previous forecast to $11.6 billion, due to projected increases in U.S. demand for processed grain products, as well as for wheat and oats.
- Total oilseed and product imports for fiscal 2018 are expected to increase to $9.0 billion, a $200 million increase from November, due in part to stronger than expected volumes of vegetable oil shipments.
China To Maintain No. 1 Customer Status
Though it’s expected to purchase less in 2018, China will remain the biggest U.S. customer with imports totaling $21.6 billion, $1.0 billion lower than the November forecast, according to the USDA Outlook Report.
U.S. soybean exports to China during the first quarter were down 26% from a year ago, while Brazilian shipments more than tripled, buoyed by ample exportable supplies, the report stated.
Other highlights from Thursday’s USDA Report:
- Exports to Japan are forecast up $400 million from the November forecast to $11.5 billion on the strength of beef and pork demand. Exports to Hong Kong are forecast up $300 million to $4.1 billion, primarily as a result of greater beef sales.
- Canada and Mexico remain the second- and third-largest U.S. agricultural markets, with export forecasts at $21.2 billion and $19.2 billion, respectively. Higher corn sales to Mexico were offset by declines in wheat and soybean shipments.
- The forecast for South America is down $300 million, reflecting anemic demand for U.S. wheat in Brazil. U.S. wheat shipments to Brazil declined precipitously in October-December as Brazil turned to importing more supplies from Argentina.