Trade and US agriculture go hand in hand
If you listened to all of the presidential campaign rhetoric, you would think that every recent trade agreement and pending ones like the Trans-Pacific Partnership are nothing but bad news.
Both Secretary of State Hillary Clinton and Businessman Donald Trump have voiced their opposition to TPP and have expressed a desire to renegotiate parts of the North American Free Trade Agreement.
But for U.S. agriculture, life without new export opportunities could make a soft farm economy even worse. In fact, the story of U.S. agricultural exports is one of the recent bright spots.
U.S. agricultural exports will total $133 billion in the fiscal year starting Oct. 1, up $6 billion from the revised forecast for the current year, USDA said in its first projection for FY 2017. After two years of declines in exports, the department said the forecasts indicate farm exports have begun to rally again.
The increase in overseas shipments is largely due to higher exports of oilseeds and products, horticultural goods, cotton, livestock, dairy and poultry, according to the quarterly report by USDA’s Foreign Agricultural Service and the Economic Research Service.
“These numbers once again demonstrate the resiliency and reliability of U.S. farmers and ranchers in the face of continued challenges,” Agriculture Secretary Tom Vilsack said in a statement. He said the projections for the next fiscal year, if realized, would be the sixth highest on record.
The report projects the country’s agricultural trade surplus for FY 2017 rising to $19.5 billion, up 40 percent from the expected $13.9 billion this year. The U.S. has continued to post an agricultural trade surplus since recordkeeping began in the 1960s, USDA said.
Vilsack made special mention of an expected growth in demand for U.S. beef, pointing out that shipments of the meat are expected to reach $5.3 billion in 2017, well above the $1.5 billion exported in FY 2004, following the discovery of a case of mad cow disease, or BSE, in December 2003.
“U.S. beef exports have recovered,” Vilsack said, citing a rise in global economic growth and efforts by the Obama administration to eliminate BSE-related restrictions in countries around the world, including 16 countries since 2015.
Some other highlights of the report:
China is projected to return as the United States’ top export market in 2017, surpassing Canada as the number-one destination for U.S. agricultural goods. The country’s purchases are expected to be $3.5 billion higher than the current year, due mostly to increased soybean, tree nuts and pork exports.
Exports of oilseeds and related product exports are seen rising $2.7 billion, to $31 billion in 2017, driven by record soybean shipments and higher unit values. Limited export availability in South America during the first half of the marketing year also supports projections for a higher export volume.
Fiscal year 2017 grain and feed exports are forecast at $29.3 billion, unchanged from the 2016 estimate as higher wheat and corn exports offset reductions in sorghum. Wheat is forecast at $5.1 billion, up $100 million from 2016.
Rice exports are forecast to remain at $1.9 billion, with an increase in volume offset by a decline in value amid record supplies.
Cotton exports are projected to rise $900 million due to sharply higher U.S. production and tighter foreign stocks.
Exports of livestock, dairy and poultry products are seen up $800 million, primarily due to higher poultry and dairy shipments.
Grain and food exports are forecast unchanged at $29.3 billion, as higher wheat and corn shipments offset reductions in sorghum.
The fiscal 2017 export forecast for horticultural products is $34 billion, up $1.4 billion from the 2016 estimate. Fresh fruit and vegetables are forecast down $200 million to $6.8 billion, based on lower shipments to Canada and Mexico.
The report also forecast agricultural imports at $113.5 billion, $400 million higher than FY 2016.
USDA revised the forecast for exports in the current fiscal year to $127 billion, up $2.5 billion from the previous prediction. This would bring total agricultural exports since 2009 to more than $1 trillion, “smashing all previous eight-year totals,” Vilsack said.
“Exports are responsible for 20 percent of U.S. farm income, also driving rural economic activity and supporting more than one million American jobs on and off the farm,” Vilsack said, using the report to push for approval of international trade agreements.
“The United States has the opportunity to expand those benefits even further through passage of new trade agreements such as the Trans-Pacific Partnership,” Vilsack said. “Such agreements are key to a stable and prosperous farm economy, helping boost global demand for U.S. farm and food products, increasing U.S. market share versus our competitors, and ensuring that our farmers and ranchers have stable and predictable markets for the quality goods they produce.”
Agri-Pulse Managing Editor Dan Enoch contributed to this report.