U.S. farm exports seen at $100 billion

News
Feb 19, 2010
by DTN

U.S. farmers can expect a record corn crop, another huge soybean harvest, and strong demand for its exports, which should combine to produce strong incomes for the agriculture sector this year, USDA said in its latest forecast.

At its an annual outlook conference, USDA raised its forecast for farm exports in fiscal 2010 to $100 billion from the $98 billion it estimated in November, and $96.6 billion in 2009, as world demand begins to recover from recession.

“Record crops both home and abroad have further weakened price prospects for grain and oilseeds,” USDA Chief Economist Joseph Glauber told the conference. “But because of strong domestic and (world) demand, prospects still remain high relative to historic lows.”

Oilseed exports will lead the recovery based on strong Chinese demand, said Jim Miller, USDA’s undersecretary charged with trade issues, at the department’s annual outlook forum.

U.S. farmers will plant this year 89 million acres of corn, up from USDA’s previous forecast of 88 million acres, along with 77 million acres of soybeans, up from a prior forecast of 76.5 million acres, based on USDA planting projections released last Thursday.

If the forecasts hold, farmers will harvest a record 13.2 billion bushels of corn, eclipsing the record set in 2009, and 3.26 billion bushels of soybeans, the second largest crop ever, trailing only the 3.36 billion bushels of 2009.

USDA projected wheat sowings at 53.8 million acres during 2010.

More good news for growers is farm expenses should stay steady as increases in fuel costs will be offset by lower fertilizer prices. In previous years, farmers faced skyrocketing energy and fertilizer prices.

Despite the rosy forecast for world demand, U.S. farm exports face technical and other barriers, U.S. Trade Representative (USTR) Ron Kirk said at the conference. His office continues to work with China and Russia to address barriers.

Russia effectively banned U.S. poultry last month over concerns about the routine use of a chlorine rinse in U.S. plants used to kill bacteria that can cause food poisoning.

The U.S. has maintained its poultry is safe.

Russia was the top market for U.S. poultry in 2008, buying $800 million.

Earlier this month, China said it would slap steep anti-dumping duties on U.S. chicken products beginning Feb. 13, one of a series of trade disputes between the two nations.

U.S. poultry trade groups rejected the dumping charges, but said the move will shut them out of its secondlargest export market, which was worth $620 million for the first 11 months of 2009.

“We are continuing to press our trading partners to address barriers that impede the sale of U.S. agricultural products in many overseas markets,” Kirk said in his prepared remarks to the forum.

The administration is trying to resolve some issues on three pending free trade agreements with Panama, Colombia and South Korea, Kirk said, but he did not elaborate on when the USTR might forward the deals to Congress for its approval.

The deals would mean about $3 billion in additional U.S. farm exports, the American Farm Bureau Federation estimates.

President Obama mentioned the pending free trade deals last week, but stopped short of saying he would take them to Congress, where many Democrats remain staunchly opposed.

Glauber said the rapid increase in the ethanol sector will slow in 2010, with the industry pressured by a 15 billion gallon cap. But the ethanol sector looks to remain profitable due to lower grain prices and higher fuel prices. — DTN

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