Record Farm Exports

21% increase in USDA forecast

By Tom C. Doran

AGRINEWS PUBLICATIONS

WASHINGTON — U.S. agricultural exports are projected to reach a record-breaking $164 billion in fiscal year 2021.

The most recent forecast from the U.S. Department of Agriculture noted the record high represents a $28 billion, or 21%, increase from the previous fiscal year 2020, and a $7 billion increase from the February forecast. The previous export record of $152.3 billion was set in fiscal year 2014.

The report was issued by USDA’s Foreign Agricultural Service and Economic Research Service. USDA noted corn, soybeans, along with livestock, poultry and dairy products led the increases.

Soybean export volumes are forecast at record levels due to surging demand from China. USDA projects exports of $28.9 billion, up $1.5 billion from the February estimate.

Corn exports are anticipated to be $3.2 billion higher to $17.2 billion due to record volume and higher unit values, driven by strong demand and reduced competition.

Overall livestock, poultry and dairy exports are projected to increase to $34.2 billion, $1.6 billion higher than the February projection, due to increases in the dairy, pork and beef forecasts.

Dairy exports are forecast at $7 billion, up $500 million due to higher volumes and unit values, particularly for skimmed milk powder and whey and whey products.

The forecast for pork exports is up $400 million, on higher unit values and recovering demand in several markets. Beef and veal, beef and pork variety meat, and poultry and product exports are projected up $200 million each.

Cotton exports are forecast up $200 million on higher volumes. The forecast for horticultural exports is reduced by $400 million to $34.1 billion due to lower tree nut unit values.

Exports for China were hiked by $3.5 billion from the February forecast to a record $35 billion due to record shipments of soybeans, corn, tree nuts, beef, wheat and poultry products.

China is forecast to remain the largest market for U.S. agricultural exports in fiscal year 2021, followed by Canada and Mexico.

U.S. agricultural imports in fiscal year 2021 are projected at $141.8 billion, up $4.3 billion from the February forecast. This increase is primarily driven by expected rising imports of livestock, horticultural, and sugar and tropical products.

The forecasts in this report are based on information available at the time of USDA’s May 12 World Agricultural Supply and Demand Estimates release. The adoption of the World Trade Organization’s internationally recognized definition of “agricultural products” will take effect in the August release.

Global Recovery

Foreign Agricultural Service and Economic Research Service also looked at the global pandemic and economic recovery.

“Countries with high vaccination rates are beginning to curtail restrictions, while others struggle to contain ongoing crises. In the U.S., optimism over a full service-sector reopening is mixed with supply-chain bottlenecks currently subduing the consumption of goods and generating increased attention over potential higher inflation,” the report stated.

Consumer spending is returning quickly as more adults in the United States are fully vaccinated.

“The enthusiasm of the better-than-expected economic recovery has boosted equity prices while also reversing some of last year’s biggest trends. Technology companies that benefited from expanded work-from-home hours experienced massive valuation gains in 2020, but have greatly underperformed compared to consumer non-cyclicals thus far in 2021,” the report continued.

The normalizing of conditions is expected to bring about a large shift of expenditures back toward the service sector globally. Overall, global real gross domestic product is expected to grow by about 5.5% in 2021.

Growth projections for U.S. real GDP was increased to 5.8% from the February estimate of 4%, after contracting by 3.5% in fiscal year 2020. The Eurozone economic growth projection is lowered from 4.5 to 4.2%, as vaccination rollout slowly catches up to target goals.

Real GDP in North America is expected to grow by 5.4% in 2021 after a 4% decline in 2020. Real GDP for both Canada and Mexico is forecast to grow by 5% in 2021 after experiencing substantial declines in 2020, down 5.4% and 8.3%, respectively.

Tom C. Doran can be reached at 815-780-7894 or tdoran@shawmedia.com. Follow him on Twitter at: @ AgNews_Doran.

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