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USDA released its midyear Outlook for U.S. Agricultural Trade report at the end of May. The report upped export expectations for the 2012 fiscal year (FY12) by $3.5 billion relative to the earlier February forecast. Even at $134.5 billion, this year’s projected exports are $2.9 billion short of the 2011 fiscal year (FY11) exports. Imports, meanwhile, are at a record high.
Beef export forecasts by value and volume remain mostly steady with earlier predictions, with only variety meats gaining slightly from February’s numbers. Anticipated beef exports by value for FY12 are above those of FY11, but are down by volume. Cattle and beef import forecasts for FY12 are up FY11 by value, down by beef volume, and up by live head count.
Export expectations are up in most commodity areas compared to February’s forecasts with the exception of coarse grains. Predicted exports to the U.S.’ top three trade partners— Mexico, Canada and China—are all raised from earlier expectations. Trade with the European Union is down $1.5 billion “due to increased grain and oilseed competition.”
As mentioned, beef export (by value) projections in the recent report are steady with February’s predictions at $4.9 billion. This includes fresh and frozen beef, including veal, excluding variety meats and hides. By volume expectations again remain at earlier levels at 900 million metric tons for FY12.
When compared to FY11, the projected beef export numbers for FY12 are up $344 million by value. At the same time, expectations of exports by volume have dropped 10 million metric tons relative to FY11.
Expectations for beef and pork variety meats (reported together) have increased slightly since February’s report. By value, expectations of variety meat export for FY12 rose $100 million. This would be $166 million above FY11 export values. By volume, projections for combined variety meat exports were lowered 100 million metric tons. This would put by volume variety meat exports down 24 million metric tons from FY11.
Oilseed and grain export projections were mixed compared to earlier February predictions, but collectively down compared to FY11 numbers by value and volume.
Forecasts for grains and feeds—which includes wheat, rice, coarse grinds such as corn, and unspecified “feeds and fodders”— increased marginally when compared to February’s expectations, from $34 billion to $34.5 billion in value, and from 91 million metric tons to 95.8 million metric tons in volume. With the exception of the projected value of feeds and fodders increasing compared to FY11 values, all projected numbers in the grains and feeds category are below FY11, in both value and volume.
Export value and volume expectations for oilseeds and related products—this including soybeans, soybean meal, and soybean oil—were increased compared to February’s predictions, but were almost unanimously down compared to FY11 exports.
The relationship between exports and imports is in a record-setting low position. Though a net exporter of agricultural goods, the FY12 export surplus—predicted to be $27 billion—is well below FY11’s record of $42.9 billion.
While exports of agricultural goods have fluctuated over recent years, imports have steadily increased. USDA increased the expected imports for FY12 by $1 billion to $107.5 billion in value. Increases for imports of beef and veal, cattle, vegetable oils, oilseeds, and bulk grains were predicted. These increases were offset slightly by decreases in sugar, rubber and other tropical products.
Projected imports of live cattle and beef collectively rose to $5.3 billion from February’s $4.9 billion. The increase in beef imports is due to tighter U.S. supplies and ample beef supplies from Canada, Australia, New Zealand and Mexico. Improved pasture conditions in Australia and New Zealand have boosted carcass weights and production in those countries.
Despite this, imports of cattle and beef from Canada and Mexico are expected to dip in the near future as Canada is retaining more females for herd building and Mexican cattle inventories are being exhausted.
Import projections of live cattle and calves by value fell $100 million from February’s predictions, putting the FY12 estimate at $1.5 billion. Despite the expected reduction, this would still be above FY11’s $1.48 billion import numbers. By volume, the decrease was 100,000 head, making the total year projections 1.9 million head. This would be below FY11’s 2.15 million head imported.
Expectations for FY12 beef imports increased both in value and in volume as compared to February’s forecasts. By value, projected beef imports rose $500 million to $3.8 billion. By volume, they rose 100 million metric tons to a total of 800 million metric tons. These expectations put FY12 beef imports above FY11 levels, which were $3.01 billion by value and 683 million metric tons by volume.
Import projections of oilseeds and grains and feeds by value are up from February’s expectations, and well above FY11 levels. Forecasted imports of oilseeds and related products jumped a whopping $1 billion from February’s predictions, from $8.1 billion to $9.1 billion. This is above FY11’s $7.66 billion import levels.
Grains and feeds import projections similarly gained, though not to the extent of oilseeds. The updated forecast places FY12 grains and feeds imports at $9.7 billion, up from February’s $9.3 billion projection. This would be above FY11’s $8.35 billion in imports.
Agriculture Secretary Tom Vilsack called agriculture the “bright spot” in the nation’s economy in light of the updated forecast report.
“In fiscal year 2012, the latest forecast sees $134.5 billion in U.S. farm exports, the second highest level ever and $3.5 billion greater than the previous forecast. The reason for this success is the productivity of our farmers and ranchers, as much as President Obama’s leadership on trade.”
“These figures indicate how demand for the American brand of agriculture continues to soar worldwide, supporting good jobs for Americans across a variety of industries such as transportation, renewable energy, manufacturing, food services, and on-farm employment. And as American agriculture continues to achieve a nearly unparalleled level of productivity, this success story will continue, helping to strengthen an American economy that’s built to last.” — Kerry Halladay, WLJ Editor