According to the Outlook for U.S. Agricultural Trade, issued Nov. 30 by the USDA Economic Research Service, we are well on our way.
It’s a big year for the U.S. in terms of agricultural trade. 2010 exports are forecast to be the second highest on record, increased $1 billion from the August 2009 forecast alone. Our country will also experience resumed import growth.
A reviving global economy is a factor in this surplus. Demand for U.S. high value-products, such as corn, soybeans and cotton, is also influencing the predictions.
Increased demand in oilseed, cotton and dairy markets is also important to note. The USDA says the recent decision by the European Union to sharply reduce its export subsidies has provided a significant boost to global dairy prices.
Since the August 2009 Forecast
- Exports raised $1 billion to $98 billion
- Imports lowered $4.5 billion to $77.5 billion
- Surplus raised $5.5 billion to $20.5 billion
Grain Export Forecasts in Summary
- Corn exports will increase
- Soybean exports will increase
So what does this mean to American farmers and consumers?
Farmers in highly affected industries – corn, soybeans – should sell stored grain to take advantage of the strong export demand. Farmers in industries in which exports are predicted to decrease should carefully measure future-production planning.
Consumers can take comfort in a healthier national economy. "Retail food-price inflation in 2010 will rebound from the 2009 level toward a moderate level, slightly above the long-term historical average," the USDA stated.
Food-price inflation will not be as strong as in 2008, when corn, wheat, soybean and fuel prices were much greater.
Forecasted Exports in billions by Commodity Group
The financial gains of bountiful exports should be reflected in our nation’s GDP. When the dollar appreciates against foreign currencies, U.S. exports cost more in foreign local currencies and thus demand for them declines. Conversely, a depreciation of the dollar increases U.S. agricultural competitiveness by lowering prices of U.S. products in foreign markets, as explained by the U.S. Department of Economic Analysis.
America is exporting more goods than ever to East Asia but exporting less to North America. Though export figures to Canada have decreased, Canada and Mexico will remain our country’s top export markets in 2010.
In regards to our country’s imports, though the volume of U.S. farm imports fell by 3 percent in 2009, which is the first volume drop since 1995, USDA said that a further retreat is not forecasted in 2010.
2010 agricultural imports are forecast up $4.1 billion since August to $77.5 billion. The increase consists of an additional $400 million in livestock and meats, $200 million in dairy products, $200 million in grains and feeds, $650 million in oilseed products and $1.2 billion in sugar and tropical products.
High domestic unemployment, weak disposable income, and lower purchasing power of the dollar contributed to our country’s need for increased imports.
America’s balance of trade is welcoming to consumers and the agricultural industry and is beneficial to our national economy.