USDA Quarterly Outlook for U.S. Agricultural Trade

According to the U.S. Department of Agriculture, the Foreign Agricultural Service and the Economic Research Service jointly published the Outlook for U.S. Agricultural Trade. The quarterly report projects total U.S. agricultural exports at $139.0 billion, representing a $2.0 billion increase from the August forecast. This upward revision is driven primarily by higher export forecasts for soybeans, pork, and dairy products.

Soybean and Oilseed Projections

Soybean exports are up $1.2 billion to a total of $18.0 billion, which the report attributes to higher unit values. According to the USDA findings coordinated by Kamron Daugherty and Hui Jiang, higher unit values on lower domestic production account for most gains in the oilseeds and products category, which is forecast at $27.1 billion, up $1.5 billion from the August projection. Additional sales to China since the beginning of the fiscal year have strengthened U.S. prices, though soybean export volumes remain unchanged. Furthermore, purchases made during progressing bilateral trade negotiations have helped push Marketing Year 19/20 U.S. soybean commitments for delivery to China to levels well above a year ago, according to the International Grains Council.

Livestock, Poultry, and Dairy Performance

Overall livestock, poultry, and dairy exports are forecast at $31.9 billion, marking a $500 million increase from the August projection. Pork exports are raised by $400 million, largely due to strong demand from China that boosts volumes. Dairy product exports are up $300 million to $5.8 billion as both volumes and unit values strengthen. Conversely, the beef export forecast is reduced by $200 million down to $7.6 billion, reflecting lower unit values and prices. Poultry and poultry products are forecast $100 million lower to $5.2 billion on slightly weaker conditions, while hides and skins experience offsetting gains.

Grain, Feed, and Global Competition Shifts

Fiscal Year 2020 grain and feed exports are forecast at $29.5 billion, down $600 million from the August projection due mainly to declines in corn and wheat. Corn is forecast at $9.0 billion, down $400 million on lower volumes as U.S. exports face strong competition from Brazil, Argentina, and Ukraine. According to USDA Economic Research Service baseline projections, corn producers in South America and Ukraine have captured steady growth in global trade. The United States, which historically held a market share between 60 and 80 percent, has seen its share fall below 40 percent.

Wheat is forecast at $6.0 billion, down $300 million on lower volumes and unit values. According to the reporting, U.S. wheat exports will likely be constrained in the coming months by large supplies in Russia, the European Union, and Argentina, where export sales growth was expected to be robust, averaging about 3 percent per year in 2019 and beyond. Meanwhile, sorghum is up $100 million to $500 million on higher volumes, while feeds and fodders remain unchanged at $7.7 billion.