The U.S. Department of Agriculture recently released its latest “Outlook for U.S. Agricultural Trade,” forecasting U.S. agricultural exports in fiscal 2020 to $139.0 billion, up $2.0 billion from the August forecast. The increase, the agency said, is driven by higher soybean, pork and dairy export forecasts.

Still, China is a key contributing factor to the increased forecast, USDA noted.

“The forecast for exports to China is higher by $3.5 billion compared to our estimates in August and is now expected to reach nearly $11 billion,” USDA economist Rob Johansson said.

USDA forecasts fiscal 2020 grain and feed exports at $29.5 billion, down $600 million from the August forecast due mainly to declines in corn and wheat.

Corn exports are projected at $9.0 billion, down $400 million on lower volumes as U.S. exports face strong competition from Brazil, Argentina and Ukraine.

According to the outlook, oilseeds and products are projected at $27.1 billion, up $1.5 billion from the August projection. Higher unit values on lower U.S. production account for the most gains, with value up $1.2 billion to $18.0 billion but a decline in projected U.S. production, USDA said. Additional sales to China since the beginning of the fiscal year have also strengthened U.S. prices, but despite the sales, USDA said soybean export volumes are unchanged. Soybean meal export volumes are expected to be lower due to strong competition from Argentina's exports. In addition, USDA said tight U.S. soybean oil stocks are expected to increase prices, limiting U.S. competitiveness.

USDA forecasts 2020 wheat exports at $6.0 billion, down $300 million on lower volumes and unit values in light of strong international competition.

“U.S. wheat exports in the coming months will likely be constrained by large supplies in Russia, the European Union and Argentina,” the outlook noted.

On the animal protein side, USDA forecasts livestock, poultry and dairy exports up $500 million from August to $31.9 billion as stronger demand for pork, dairy and hides and skins will more than offset declines for beef and poultry products.

According to the outlook, beef exports are down $200 million to $7.6 billion on lower prices. Pork is up $400 million primarily as demand from China boosts volumes. Poultry and poultry products are projected to be $100 million lower to $5.2 billion on slightly weaker volumes for poultry meat. Dairy product exports have been raised $300 million to $5.8 billion as volumes and prices for nonfat dry milk powder and other skim milk products are expected to strengthen. Projected exports of hides and skins are up $100 million to $900 million as prices stabilize but demand remains soft.

Slowing economic growth

According to the outlook, economic growth continues to slow. The forecast for per capita global gross domestic product (GDP) growth in 2019 is unchanged from the prior forecast, at an annual rate of 1.5%. However, the forecast for 2020 has been revised downward further to 1.5% from 1.6% in the August forecast.

Forecasts for U.S. GDP are unchanged from August, at 1.6% for 2019 and 1.3% for 2020. “Despite positive consumer sentiment, low unemployment rates and strong year-over-year wage gains, growth has been moderated by continuing uncertainty in U.S.-China trade, Brexit and slowing trade and investment globally,” the report said.