The latest U.S. agricultural export forecast from USDA for fiscal year (FY) 2012 ending on Sept. 30 shows the dollar value of exports up $3.5 billion from the February forecast to $134.5 billion, short of last year’s record of $137.4 billion.  All of the increase was accounted for by the three largest importers, Canada, Mexico and China, with a collective increase of $4.0 billion and a 42.8 percent share of U.S. agricultural exports.  Slower than expected economic growth has had little impact on exports so far in FY 2012 and that is not likely to change in FY 2013.

Canada’s increased imports from the U.S. to $20 billion were due to beef, pork, dairy, tree nuts and other consumer-oriented products.  Canada accounts for 25 percent of U.S. consumer-oriented exports.  Mexico’s short corn crop last year has led to increased imports of corn, feed wheat and DDGS, the second largest U.S. market this year.  Increased imports of pork, poultry meat and horticulture products also led to the $19.0 billion forecast.  Corn exports to China of $725 million in the first half of the year compared to less than a $1 million last year helped push the export forecast up $1.5 billion to $18.5 billion.  Whole soybeans and oil shipments were down due to increased competition, but almost all other categories were up, particularly cotton, pork, dairy, poultry and tree nuts.

EU-27 imports from the U.S. were revised down from $10.0 billion to $8.5 billion, compared to last year at $10.2 billion.  Bulk commodities were down 55 percent in value for the first six months of the fiscal year compared to a year earlier, with soybean sales down by two-thirds to $360 million and corn and co-product sales down 85 percent to $37 million.  Demand appears to have declined, but U.S. farmers have also planted corn varieties not yet approved in the E.U.

Estimates of exports of bulk wheat, rice, coarse grains, feeds and fodders and soybeans and products increased by 6.0 million metric tons (MMT) from February to May to 140.7 MMT, down from 156.6 MMT last year.  Wheat exports on a volume basis are up 15.5 percent from the February forecast to 29.1 MMT, still down 15.7 percent from FY 2011 volume of 34.5 MMT, with value up only 6.3 percent to $8.5 billion. USDA expects large shipments in the summer months when competition from other suppliers is less.  Rice export volume was increase 6.1 percent from February to 3.5 MMT in May, while value was increased by 16.7 percent.  Rice shipments have been strong to Northeast Asia and Central and South America.

Corn export volume remained unchanged from February at 43.5 MMT, while the value of shipments declined from $13.0 billion to $12.5 billion due to an expected large 2012 crop forcing prices down and increased competition from Brazilian corn now coming to market.  Feeds and fodders are forecast up 4.1 percent in volume and 4.7 percent in value to $6.7 billion due to larger shipments to China.  Whole soybeans, meal and oil export volumes are up 2.3 percent from February to May, but still well short of the 50.0 MMT movements last year. The continued shrinking of the South American crop has brought more buyers and higher prices, with the value of exports up 5.7 percent to $22.1 billion.  Soybean oil volume and value were unchanged at 0.5 MMT and $0.7 billion dues to the lack of supplies.

Meats, fruit, tree nuts

Meat exports, beef, pork, beef and pork variety meats and broiler meat, declined from 6.9 MMT to 6.7 MMT, due to slight weakness in variety meats and broiler meat.  The value of meat export was increased 1.9 percent to $15.8 billion, with slight increases for pork, variety meats and broiler meat.  The value of dairy product exports was increased 6.8 percent to $4.7 billion, and up from $4.5 billion last year.

Horticultural products continue to set records with a forecast at $28.5 billion in May, up from $28.0 billion in February.  Tree nuts account for the entire $0.5 billion increase to $6.2 billion.  Exports of fresh fruits and vegetables were unchanged at $6.9 billion and processed at $6.7 billion.  Sugar and tropical product exports were unchanged at $6.2 billion, and cotton value was up $0.2 billion to $6.4 billion.

USDA has not projected exports for FY 2013 beginning October 1 as part of this quarterly release, but export estimates from the World Agricultural Outlook Board (WAOB) by crop marketing year and livestock by calendar year provide some indications of U.S. exports for the next fiscal year.  Bulk commodity exports are somewhat cyclical, with volume and value peaking in FY 2011 as agricultural markets were impact by the drought shortened crops in the Black Sea region in the summer of 2010.  The WAOB estimates for the 2012/13 crop marketing years show increased volume of exports for all of the main grains, except rice.  Soybean exports will be up, with soybean oil up slightly and soybean meal down.  Cotton export volume will likely increase, but market prices will be lower.

U.S. market prices next year are expected to be lower for wheat, corn and sorghum, but up for rice and soybeans and nearly unchanged for soybean products.  Volume of grains exported should be up, while value could be down.  This will be particularly true for corn where the U.S. share of world trade has slipped to under 50 percent and would be even lower if feed wheat was included in the calculation.  With larger available supplies and lower prices, the U.S. will compete head-to-head with Brazil and Ukraine to regain corn markets.

Exports of meat and dairy products do not have the volatility of bulk commodities.   The WAOB’s estimates for U.S. livestock and poultry production for 2013 show meat exports mostly unchanged with pork up slightly.  Domestic beef prices are expected to be stronger, broilers prices unchanged and pork prices a little lower.  Dairy product exports are expected to be up slightly in volume with higher domestic prices.  Horticultural products have generally trended up in recent years and will likely do so again in FY 2013.

Unless significant additional weather problems develop in a major producing area of the world, the U.S. is not likely to surpass the peak export volume in bulk commodities of 156.6 MMT reached in FY 2011.  Other export products should at least hold steady in volume and likely improve a little in value unless the world economy slows further.

Ross Korves is an Economic Policy Analyst with Truth About Trade and Technology