The U.S. Department of Agriculture recently revised its U.S. agricultural exports forecast higher to $142.5 billion in fiscal year 2018, primarily due to expected increases in corn and cotton exports.
At the same time, U.S. agricultural imports are also expected to be higher at $121.5 billion, driven by rising imports of animal and horticultural products.
In both cases, the May forecasts represent an increase of $3 billion over the previous respective forecasts in February. The resulting U.S. agricultural trade surplus for 2018 is expected to be $21 billion.
“While the United States has consistently run an agricultural trade surplus, the size of the surplus has declined since 2014,” USDA noted. “This reflects steadily rising imports amid more variable export patterns.”
Further, USDA pointed out that as prices for corn and soybeans rose sharply in the early 2010s and later fell after 2014, the value of U.S. exports rose and fell, as well. Additionally, the U.S. dollar experienced a sustained period of appreciation between late 2014 and early 2017, which can make imports more attractive to U.S. consumers while increasing the relative price of U.S. goods sold to foreign markets.
Grain and feed exports
USDA forecasts fiscal 2018 grain and feed exports at $31.2 billion, up $1.5 billion from the February forecast as higher corn more than offsets reductions for other grains.
Corn is forecast up $1.3 billion to $10.3 billion on both larger volumes and higher unit values.
“Strong exports reflect improved U.S. export opportunities into summer in light of reduced exportable supplies in Argentina and worsening prospects for the second-crop corn (safrinha) in Brazil,” USDA noted.
Sorghum exports are lowered, but unit values are revised higher, reflecting strong foreign demand earlier this year, supported by trade data.
USDA increased feeds and fodders by $100 million to $7.6 billion, boosted by higher unit values for dried distillers grains with solubles and hay products.
Wheat is forecast at $5.8 billion, down $100 million as lower volumes more than offset higher unit values. USDA said the volumes are lowered due to increased competition from Argentina, Canada and Russia.
“Unit values are up slightly as prices have strengthened in recent months on expectations that global production will be down from last year.”
Oilseed and product exports are forecast at $31.5 billion, up $400 million from the February USDA forecast, mainly due to increased trade of soybean products.
“Soybean prices have risen sharply in response to crop losses in Argentina, but export volumes are down due to slower exports to China, which will bring total soybean exports down $100 million to $21.9 billion,” USDA reported.
However, USDA reported that soybean meal and oil exports are up due to lower competition from Argentina.
“Meal is up on both higher volumes and unit prices, while soybean oil is up on higher volumes only.” Cotton exports are forecast at $6.2 billion, up $800 million, and volume is forecast up 300,000 tons to 3.5 million tons.
According to USDA, U.S. cotton has captured most of the recent increase in global import demand, supported by stronger imports from Vietnam and Turkey, in both of which the U.S. is the largest supplier. Export unit values have risen, supported by strong demand, the agency added.