USDA: Ag Exports at $140.5 Billion

Thu. May 28, 2015 4:50 PM

By Katie Micik
DTN Markets Editor

OMAHA (DTN) -- USDA's latest forecast for agricultural exports in fiscal 2015 shows a $12 billion year-over-year decline to $140.5 billion, which is the third highest on record but the lowest estimate since 2012.

Most of the decline comes from high-value products like the $1 billion horticultural, fruit and vegetable products. The forecast for livestock, poultry and dairy exports was lowered $500 million on increased global competition for dairy products and reduced poultry exports following the avian influenza outbreak.

The outlook for oilseed and grain and feed exports brightened. USDA's quarterly Outlook for U.S. Agricultural Trade said exports of oilseed and oilseed products increased $100 million as high soybean meal values offset lower soybean prices. The forecast for grain and feed exports increased $600 million on higher sorghum and DDGS sales.

"The strong pace of American agricultural exports continues, with a trade surplus of more than $23 billion, a $1 billion increase from earlier projections for fiscal year 2015," Agriculture Secretary Tom Vilsack said in a press release. "Fiscal years 2009 to 2014 represent the strongest six years in history for U.S. agricultural trade, with U.S. agricultural product exports totaling $771.7 billion. For many American products, foreign markets now represent more than half of total sales. U.S. agricultural exports now support more than 1 million jobs here at home, a substantial part of the 11.7 million jobs supported by exports all across our country. Expanded U.S. trade overall has added roughly $13,000, on average, to every American family's income. Fiscal year 2015 exports are now forecast to be the third-highest on record, led by a strong performance in bulk commodities such as grains, animal feeds, and oilseeds."

Total grain and feed exports are forecast at $30.5 billion. USDA expects the volume of corn exports to be higher than its February estimate by 1.5 million metric tons. Its new estimate is 46 million metric tons (1.8 billion bushels). The volume increase is largely offset by weaker prices, USDA stated.

Strong early-season sales and commitments support record soybean and soybean meal export volume. "Unit values for soybeans are reduced based on strong competition from Brazil, a weak real, and record U.S. plantings this spring," the report stated. "This reduces the soybean export forecast by $200 million, but is more than offset by a larger soybean meal forecast, raised in response to stronger-than-expected unit prices."

Wheat exports are forecast at $6.1 billion, a $300 million decrease from February's forecast. USDA said lower volumes are largely to blame.

Vilsack also used the news to emphasis the importance of free-trade agreements to the American economy and especially the farm sector. "Exports to countries where the United States lacks the assurances offered by trade agreements have declined this year, highlighting why it is so important for Congress to act and pass strong trade promotion authority legislation," Vilsack said.

The U.S. Grains Council's weekly newsletter highlighted one of the successes of the free-trade agreement with Colombia in its weekly newsletter. That agreement was passed in 2011 and went into effect in May 2012.

For the second year in a row, Colombia is likely to exhaust its duty-free quota, 2.43 million metric tons (95.6 mb) early in the calendar year.

"The Colombian industry estimates importers are planning to purchase an additional 2.6 million tons (102 million bushels) this calendar year," said USGC Regional Director of the Western Hemisphere Marri Carrow. "Out of quota U.S. corn will have a 16.5% duty applied, which is the same for Argentina and Brazil. Capturing these final year sales will really depend on the basis, but current market dynamics are favorable for the United States to maintain its current market dominance."

In the 20 countries where the U.S. has free-trade agreements, U.S. ag exports have been relatively steady, Vilsack said.

"Every day without trade promotion authority, American agriculture suffers as competitors negotiate their own agreements and lower global standards when it comes to environmental impact, consumer safety, and working conditions. USDA will continue to fight to get the best deal for farmers and ranchers, but our ability to open new markets and create new customers is limited without Congressional action."

Katie Micik can be reached at katie.micik@dtn.com

(AG)

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