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U.S. ag exports projected to rise despite challenges

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Agricultural exports to China expected to be down $5 billion in 2019.

Agricultural exports in fiscal 2019 are projected to rise to $144.5 billion, a $500 million increase from the revised forecast for fiscal 2018, according to the latest “Outlook for U.S. Agricultural Trade” report by the U.S. Department of Agriculture’s Economic Research Service (ERS). The increase is primarily due to higher exports of wheat and horticultural products, which offset expected declines in oilseeds, livestock and dairy product exports, USDA said.

USDA

The outlook noted that agricultural exports to China are projected to be down $7.0 billion from fiscal 2018 to $12.0 billion as soybean sales are expected to be sharply lower due to retaliatory tariffs. Agricultural exports to Canada and Mexico are projected to be $21.5 billion and $19.7 billion, respectively.

The forecast for U.S. agricultural imports in fiscal 2019 is at $126.5 billion -- $2.0 billion higher than fiscal 2018 due to increases in horticultural and sugar and tropical products. USDA reported that the U.S. agricultural trade surplus is expected to decline by $1.5 billion in fiscal 2019 to $18.0 billion.

For fiscal 2018, USDA said the forecast of $144.0 billion is an increase of $1.5 billion from the previous forecast in May, largely due to higher corn, cotton and soybean meal exports. Imports are projected to be up $3.0 billion to $124.5 billion.

U.S. fiscal 2019 grain and feed exports are forecasted at $33.1 billion, up $1.5 billion from the revised 2018 estimate, primarily on stronger wheat exports. Wheat is projected to be up $1.4 billion from the previous year to $7.1 billion, primarily on higher volumes.

“Tight supplies in major exporting countries, especially Australia and the European Union, are expected to make U.S. wheat more competitive in the international market,” USDA said.

The corn export forecast is unchanged at $11.2 billion as higher unit values offset lower export volumes stemming from heightened competition from Ukraine, Argentina and Brazil. Exports of feeds and fodders are forecasted to be slightly higher at $7.7 billion.

 The fiscal 2018 U.S. grain and feed export estimate is projected to be $31.6 billion, up $400 million from May due to higher corn exports, the outlook reported.

Fiscal 2019 exports of oilseeds and products are projected at $30.2 billion, down $1.4 billion, primarily on lower unit values.

The U.S. soybean production forecast is at a record high, which is expected to pressure prices in light of lower exports and projected record stocks, USDA reported.

Soybean export value is expected to fall $800 million to $21.0 billion, while soybean meal will be down $500 million to $4.4 billion. Soybean oil is projected to fall slightly on lower volume.

“The greatest unknown is China’s demand for U.S. soybeans. However, premiums for South American soybeans will continue to enhance U.S. soybean and product competitiveness in other markets, providing some relief from the effect of likely lower exports to China,” the ERS report said.

The U.S. fiscal 2018 oilseed and product export estimate was revised $100 million higher to $31.6 billion. USDA said the upward revision is driven by strong soybean meal exports resulting from a drought-reduced crop in Argentina, traditionally the world’s largest soybean meal exporter.

“Strong late-season soybean shipments to markets outside of China — a response to discounted U.S. prices — helped boost export volume and partially offset the late-year price decline,” USDA added.

On the livestock, dairy and poultry side, fiscal 2019 exports are projected to be down $300 million to $30.3 billion as weaker values for beef, pork, dairy and other livestock product exports offset growth in poultry and poultry products.

USDA said beef is projected to be down $100 million as growth in volumes is offset by lower unit values, and pork is expected to be down $300 million despite growth in volumes. Weaker demand and the impact from retaliatory tariffs are expected to pressure prices lower, the report noted.

Poultry and poultry products are projected to be up $100 million to $5.3 billion based on elevated prices and volumes for most products.

USDA projected dairy product exports to be down $100 million to $5.6 billion due to the expected negative impact of retaliatory tariffs and weak global prices.

Hides and skins are expected to be unchanged at $1.6 billion as demand remains soft.

The fiscal 2018 livestock, dairy and poultry estimate was unchanged from May, at $30.6 billion, as lower shipments of pork, variety meats, dairy products and hides and skins are offset by gains for beef and poultry products, USDA reported.

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