The total number of U.S. ag exports are sharply lower—and that’s because China has recently pumped the breaks on buying a lot of our ag products.
“Generally speaking, our exports are struggling,” said USDA’s chief economist Seth Meyer following the release of the agency’s U.S. Ag Trade Outlook issued on May 29.
Exports are down $8.2 billion from last year at $170.5 billion this year, leading to an overall ag trade deficit of $32 billion.
As for the decline in our ag exports, Meyer says China played a big role. It’s now buying less corn and soybeans from the U.S. and more from Brazil.
“I think the interesting headline story from this is China falls to our number three trading partner and we’re seeing a lot of competition with Brazil into that Chinese market and that is what is driving our bulk export values,” he said, as U.S. food and ag exports to China will fall by $6 billion this fiscal year.
Mexico and Canada will surpass China as the top U.S. export markets for ag products, according to USDA. Exports to Mexico are forecast to rise by $300 million to $28.7 billion, whereas exports to Canada are forecast up $400 million to $28.4 billion, both record highs.
“So, unchanged for the new forecast for 2024. But we’re still down pretty sharply from the prior year. On the import side, there actually was an upward revision of imports of 1.5 billion dollars. And that’s up from 195.4 billion the prior year,” he said. “So, you’re talking about a $7.1 billion increase in imports year over year and a $8.2 billion decline in exports.”
Meyer explained that it’s not just the amount of exports and imports that have affected these numbers, but also the value.
“It’s the unit value. So, the price of imported goods has been rising. It’s not necessarily a volume issue, but that’s at least part of the story,” he explained. “The values of agricultural imports are rising and then alternatively, export values continue to fall.”
USDA has not lowered the forecast for ag exports, but has increased the projection for ag imports.
Click HERE to read the USDA’s full Outlook for U.S. Agricultural Trade report for May 2024.
