Record Exports Anticipated
USDA predicts a record for ag exports for fiscal year 2008.
The agency’s recently revised forecast for agricultural exports predicts a record of $101 billion for fiscal year 2008, up $10 billion from November’s forecast.
When announcing the revisions at the Agricultural Outlook Forum, U.S. Secretary of Agriculture Ed Schafer noted that the new levels are at an "unprecedented" $19 billion above those of 2007.
This latest forecast builds off of unprecedented consecutive year-to-year record exports since 2004. Higher wheat, coarse grain, and soybean prices account for just over half of the revision since November. Specifically, the forecast for coarse grain exports is raised to 70 million tons, up 2 million tons since November. Corn and sorghum exports are up $2.4 billion from November. Coarse grain exports are forecast at $14.1 billion, $4.3 billion above last year’s level.
While competitor exportable supplies of corn and other feed grains are limited because of severe drought conditions in many parts of the world, U.S. supplies have remained ample due to U.S. growers responding to demand and harvesting a record corn crop.
"Based on current market conditions, bulk grains, oilseeds, and cotton exports should rise $13.2 billion and account for 70% of the overall increase in export value for 2008," Schafer said. "Higher prices account for most of this increase, but export volumes are also generally higher. With U.S. agricultural imports forecast at $76.5 billion, we expect a $24.5 billion trade surplus."
USDA says that foreign economic growth continues to support gains in consumer incomes and growth in the size of the middle class, particularly in the emerging markets. These consumers tend to spend more on food as their incomes rise, including food imported from the U.S. The weaker dollar makes U.S. products very price competitive compared to other suppliers. At the same time, tighter competitor stocks further raise demand for U.S. wheat and corn.
(Sources: USDA, U.S. Grains Council)