Agricultural trade surplus is expected to decline by $3.5 billion to $14.5 billion in fiscal 2019
Fiscal year 2019 agricultural exports are projected to be $141.5 billion, down $1.9 billion from fiscal 2018 and down $3.0 billion from the August 2018 forecast, largely due to decreases in soybeans and cotton, according the U.S. Department of Agriculture’s Economic Research Service (ERS).
Soybean export volumes were expected to be lower because of China's declining purchases from the U.S. as a result of trade tensions and as a record U.S. crop continues to pressure soybean prices lower, ERS noted. Oilseed and oilseed product exports are projected to be $27.9 billion, down $2.3 billion from August expectations, driven by lower soybean export volumes and unit values.
Particularly noteworthy, ERS said, is that the forecast for total agricultural exports to China was reduced by $3.0 billion to $9.0 billion, which is the lowest since fiscal 2007. However, recent U.S. soybean purchases from China may change this outlook in the future.
ERS said the reduction in cotton exports of $1.0 billion from the August forecast to $5.9 billion is primarily due to slowing growth in global demand.
Despite the declines, USDA raised the grain and feed export forecast by $700 million to $33.8 billion, driven by higher corn and wheat volumes. ERS forecasted corn exports at $11.8 billion, up $600 million on higher export volumes, as U.S. corn is price competitive.
Livestock, dairy and poultry exports, on the other hand, were down $200 million to $30.1 billion. ERS said declines in poultry and dairy products offset increases in beef and pork products. The beef forecast was raised $500 million largely on higher unit values, as export volumes are fractionally higher. Pork was raised $100 million as strong demand in Latin America and other emerging markets supports slightly higher export volumes. Poultry and poultry products, however, were projected to be $200 million lower at $5.1 billion on weaker prices and volumes for eggs and turkey meat. Dairy product exports were also lowered $300 million to $5.3 billion as export shipments for major products such as cheese and whey lag behind last year’s pace and global prices weaken, ERS said.
ERS projects U.S. agricultural imports in fiscal 2019 to be $127.0 billion, up $500 million from the August forecast, primarily due to expected increases in horticultural, sugar and tropical products.
Overall, ERS reported that the U.S. agricultural trade surplus is expected to decline by $3.5 billion to $14.5 billion in fiscal 2019.