USDA projects record-high value for ag exports
The outlook for U.S. ag exports generally is positive despite major crop production issues this year caused by the drought.
Dan Grant
Published: Sep 8, 2012
The outlook for U.S. ag exports generally is positive despite major crop production issues this year caused by the drought.
USDA last month forecast U.S. ag exports will reach a record-high value of $143.5 billion in fiscal year 2013 compared to the estimate of $136.5 billion for the 2012 fiscal year.
The favorable outlook is due in part to stronger economies in some countries compared to the U.S., favorable exchange rates, and record-high prices for some commodities, according to Ron Plain, University of Missouri ag economist.
“The economy in the rest of the world is doing better than our economy, so it’s getting easier to outbid the U.S. (for ag commodities),” Plain told FarmWeek.
“In particular, some of our major customers, such as Canada, Mexico, and the Pacific Rim (nations) are doing fairly well (economically),” he continued. “So I expect exports will remain strong.”
USDA predicted grain and feed exports for 2013 would total a record-high $39 billion, up $4.4 billion from the 2012 estimate. The jump in grain and feed exports is due in part to higher wheat volume and value, record-high soy prices, and higher corn values.
U.S. wheat exports were projected to increase by $3.2 billion in 2013 while sales of feeds and fodders were projected to increase $700 million, due in large part to exports of distillers’ grains to China.
However, high prices and tight supplies were projected to reduce the volume of corn exports in 2013 by about 215 million bushels. Soybean meal and soy oil exports also were projected to decline due to lower production, reduced crush, and tight stocks.
“Up until mid-June we expected a record corn crop, a lot of feed, and declining prices,” Plain said. “Things changed very rapidly. The reality is a very dry summer and short crop production will lead to less (crop and)livestock production.”
The expected decrease in livestock production was projected to lead to a $200 million decline in livestock, poultry, and dairy exports in 2013.
Plain believes the crop markets will have to ration demand among the various end-users, including livestock feeders, foreign buyers, and the ethanol industry.
“Somebody has got to be short on supply,” he added. “The question is who will cut back (on grain and oilseed usage) first.”
USDA projected the dollar will remain relatively weak and, combined with low interest rates, will continue to provide inexpensive credit to finance trade in 2013.
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