Last week, USDA’s Economic Research Service (ERS) and Foreign Agricultural Service (FAS) released the Outlook for U.S. Agricultural Trade, a quarterly report examining U.S. agricultural trade.
The Outlook stated that, “The COVID-19 outbreak has created a shock to world economies that will cause an unusually high level of uncertainty for the foreseeable future. U.S. agricultural exports in Fiscal Year (FY) 2020 are projected at $136.5 billion, down $3.0 billion from the February forecast, primarily due to reductions in bulk commodities including soybeans, cotton, corn, and wheat.
Projections for soybean exports are reduced $1.9 billion from the previous estimate to $16.5 billion for FY 2020 due in part to increasingly competitive Brazilian exports.
Friday’s update noted that, “Corn exports are projected at $8.0 billion, down $500 million on lower unit values, which are pressured by ample exportable supplies and weak domestic use for fuel ethanol.
“The forecast for wheat exports is down $300 million to $6.1 billion, as larger global supplies and uncompetitive U.S. pricing reduce prospective volume. Livestock, poultry, and dairy exports are unchanged from the February projection of $32.4 billion, as stronger demand for pork and dairy products offsets a decline for beef and poultry products.”
More specifically, the ERS / FAS report stated that, “FY 2020 U.S. grain and feed exports are forecast at $29.4 billion, down $300 million from the February projection, as lower wheat and corn exports more than offset higher sorghum exports. Corn exports are forecast at $8.0 billion, down $500 million from the February forecast on lower unit values due to ample supplies available for export, expectations of record U.S. production in 2020, and weak domestic use for fuel ethanol. Sorghum exports are forecast at $1.0 billion, $500 million above what was forecast in February on larger volumes and higher unit values, supported by demand from China…Wheat exports are forecast at $6.1 billion, down $300 million from February mainly on lower volumes due to larger global supplies and uncompetitive pricing.”
With respect to oilseeds, The Outlook indicated that, “The oilseeds and products export forecast is reduced $1.6 billion to $25.5 billion. Lower soybean export values reflect both lower volumes and lower unit prices. Soybean exports are forecast down $1.9 billion from the February forecast, to $16.5 billion. Forecast unit values are lowered from the previous forecast partly due to the impact of a weak Brazilian real as well as weaker than expected import demand for U.S. soybeans.
#Brazil's exports of #soybeans are still off the charts, mind-blowing actually. Govt data suggests May exports came in at 15.5 mmt, which is 55% more than in May 2019. Lots of those to #China, of course. pic.twitter.com/FgP3pIoKsO— Karen Braun (@kannbwx) June 2, 2020
“The soybean meal export forecast is unchanged as declines in unit values are offset by higher volumes. Soybean oil values are up $200 million with larger volumes more than offsetting lower unit values. Somewhat weaker global demand for vegetable oil in response to reduced biofuel demand arising from the impact of COVID-19 mitigation efforts has pressured unit values.”
The pork forecast is raised $200 million to $6.9 billion as higher volumes offset a small decline in unit values. Strong demand from China continues to drive growth in U.S. pork exports.
On a regional basis, The Outlook stated that, “The export forecast for China is lowered $1.0 billion from February to $13.0 billion, in part due to lower forecast volumes and unit values for soybean and cotton.
“In addition, China has been sourcing record volumes of soybeans from Brazil, helped by a weak Brazilian real. Forecast exports to Hong Kong are reduced by $500 million to $2.5 billion due to lower-than-expected shipments of consumer-oriented products, especially tree nuts, beef, and poultry meat.”