By Jennifer Dorsett
Field Editor
A new report from the U.S. Department of Agriculture (USDA) forecasts U.S. agricultural exports to increase to $140.5 billion for fiscal year (FY) 2021, driven largely by higher exports of soybeans and corn.
The projected figure is an increase of $5.5 billion from the latest FY 2020 export prediction, which was lowered to $136 billion due to reductions in horticultural, beef, veal and soybean exports.
“There’s no doubt the coronavirus pandemic has had a real and lasting impact on Texas and American agriculture,” Brant Wilbourn, Texas Farm Bureau (TFB) associate director of Commodity and Regulatory Activities, said. “Farmers and ranchers are looking forward to putting this fiscal year behind them and starting fresh on Oct. 1. There are a variety of commodities we grow and export here in Texas that USDA has predicted to increase in FY 2021. That’s something to hold onto as farmers bring in this year’s harvest and make planting decisions for the upcoming crop year, and ranchers may see a little light at the end of the tunnel, too.”
Canada, Mexico and China are expected to lead the way in importing U.S. commodities, with Canada projected to import $21 billion worth of agricultural goods.
Mexico and China are predicted to import $19.3 billion and $18.5 billion, respectively.
Soybean export volume is anticipated to rise nearly 30 percent year-over-year, according to the report, which noted soybeans are the main driver behind increased exports to China.
“Agricultural exports to China are forecast at $18.5 billion, an increase of $4.5 billion from FY 2020,” USDA wrote. “Demand for soybeans is expected to grow while Brazilian supplies are forecast to decline, boosting U.S. soybean export prospects. Continued strong demand for corn, sorghum and tree nuts also contributes to the higher forecast.”
U.S. grain and feed exports are forecast to increase $1.1 billion to $31.0 billion on higher corn, sorghum and rice exports, but USDA said wheat exports are forecast to decline.
“Russia’s second-largest wheat crop on record is likely to limit U.S. competitiveness in price-sensitive markets,” the agency stated. “The prospect of continued shipments to China is a bright spot for U.S. wheat trade, but exports to other Asian countries could be affected by large exportable supplies in Australia and Canada.”
Corn exports are projected at $9 billion in 2021, up $700 million on expectations of competitive prices and larger export volumes. The strong pace of shipments to China has sorghum exports increasing to $1.4 billion, up $400 million from FY 2020.
Livestock, poultry and dairy exports are also expected to increase in FY 2021 to $32.3 billion, mainly based on growth in the beef, poultry and dairy sectors.
Despite a decline in unit values, U.S. beef exports are up $200 million on higher volumes, and poultry and poultry product exports should show a modest gain of $100 million in 2021.
In its report, USDA cautioned pork exports will slow due to China’s rebuilding of hog herds after a devastating and long-lasting African swine fever outbreak, but overall pork exports are expected to remain unchanged.
Texas’ top row crop, however, did not receive such a positive outlook.
According to USDA trade data, FY 2021 cotton exports are forecast at $5 billion, down $400 million from 2020 due to lower volumes from a smaller crop and increased foreign competition.
“COVID-19 has rippled through the entire cotton industry,” Wilbourn said. “A worldwide economic slowdown combined with record-level stocks hasn’t been kind to cotton prices lately. Textile mills and manufacturers aren’t back to operating at their normal capacity yet, and that’s reflected in both current and futures prices in the cotton market.”
Click here to access the full report from USDA’s Economic Research Service.