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Agricultural News


At the USDA Ag Outlook Conference- FY 2019 US Ag Exports Predicted at $141.5 Billion- Unchanged From November

Thu, 21 Feb 2019 14:33:10 CST

Fiscal year 2019 agricultural exports are projected at $141.5 billion, unchanged from the November forecast as decreases in grain and oilseed exports are offset by higher livestock and dairy exports. Grain and feed exports are forecast down $100 million to $33.7 billion. Oilseeds and products exports are projected at $27.8 billion, down $100 million from November expectations, driven by lower soybean volumes. Livestock, poultry, and dairy exports are raised $300 million from the November forecast to $30.4 billion, largely as gains in beef, pork, poultry, dairy, and other products offset declines for hides, skins, and furs. Cotton is forecast unchanged from November at $5.9 billion. Horticultural product exports are unchanged at $35.3 billion.

U.S. agricultural imports in fiscal year 2019 are forecast at $128.0 billion, up $1.0 billion from the November forecast. This increase is led by horticultural products, livestock and meats, and grains and feed imports. The U.S. agricultural trade surplus is forecast at $13.5 billion, down $1.0 billion from the November forecast.



U.S. outlook positive while trade woes slow global economic growth    

Per capita world GDP growth of 1.9 percent in 2018 is the strongest since the post-financial crisis rebound in 2010-11. World GDP growth is expected to slow slightly to 1.6 percent in 2019, due in part to global trade tensions, but there is some optimism regarding future dialogue between China and the United States. There is more uncertainty than normal regarding U.S. economic conditions due to a lag in t he release of economic indicators after the Government shutdown, such as U.S. Gross Domestic Product for the fourth quarter and U.S. International Trade in Goods and Services for December 2018. However, U.S. per capita GDP was estimated to have grown at above trend at 2.2 percent in 2018 and is forecast to remain the same in 2019, with continued optimism regarding the current economic landscape, especially given the strong labor market and low inflation.

Oil prices are expected to decrease in 2019, due in part to oil stocks that are expected to continue to grow into 2020 as U.S. production expands. The U.S. Energy Information Administration (EIA) forecasts that crude oil prices in the U.S. will drop from $65.06 in 2018 to $54.79 in 2019, while Brent crude spot prices are expected to drop from $71.19 to $61.03. Oil prices are forecast lower despit e relatively optimistic expectations for U.S. economic activity.

Across North America, per capita growth reached 1.8 percent in 2018 but is expected to slow to1.4 percent in 2019. A strong labor market is expected to be a recurring theme in North America, with Mexico and Canada forecast to have relatively low unemployment rates of 3.7 and 5.9 percent in 2019, respectively. Mexico's per capita GDP is also expected to grow 2.0 percent in 2019, while Canada's is expected at 1.4 percent. Conditions across North Americaare partially dependent on the fate of the United States-Mexico-Canada Agreement (USMCA).

A slight slowdown in per capita GDP growth is expected for the Asia and Oceania regions.Growth in Asia is expected to slow to 3.6 percent in 2019 from an estimated 3.8 percent in 2018, due in part to weakening economic conditions in China. China's growth is expected to decline from 6.2 percent in 2018 to 5.8 percent in 2019, due to slowing international trade, a softening real estate market, and weaker domestic demand. Australia saw 1.3 percent growth in 2018 and expects growth to decrease to 1.0 percent in 2019. In Japan, however, GDP is expected to increase from 1.0 percent in 2018 to 1.2 percent growth in 2019, fueled by domesticconsumption.

Per capita growth in the Eurozone is hampered by a slowdown in global trade. The region expects export annual percentage growth to decrease to 2.8 percent for 2018, but exports will rebound to 3.3 percent in 2019. Real per capita GDP growth is expected to fall to 1.6 percent in 2019 from 1.9 percent in 2018. The Eurozone is also threatened by spillover effects of heavy Italian debt and the threat of a no-deal Brexit.

Latin America continues to rebound from the recession that resulted in falling per capita income in 2015 and 2016. Per capita GDP growth i   n Latin America and the Caribbean is expected to increase from 0.1 percent in 2018 to 0.7 percent in 2019. In 2019 Brazil's per capita GDP growth rate is expected to reach 1.6 percent, up from only 0.5 percent in 2018. Recessionaryconditions continue in Argentina, where per capita GDP is expected to contract 2.5 percent and unemployment is expected to peak at 10.1 percent. Venezuela also faces a continuation of it s severe recession into 2019, due in part to low oil r evenue, political instability, and external debt concerns.


US Exports

Fiscal year 2019 grain and feed exports are forecast at $33.7 billion, down $100 million from the November forecast. Corn is forecast at $11.8 billion, unchanged. U.S. corn remains price-competitive. Sorghum is down slightly to $500 million on lower unit v alues. Feeds and fodders are forecast a t $7.7 billion, unchanged. Exports of distillers' dried grains with solubles (DDGS) to key markets, including Mexico and Southeast Asian countries, remain robust. Strong exports of alfalfa hay to Saudi Arabia and the United Arab Emirates more than offset a decline in the Chinese market. Wheat is forecast at $7.5 billion, unchanged from the previous forecast as higher unit v alues offset slightly lower volumes. Unit values are up based on tightening global and domestic supplies. Volumes are down based on reduced expectations for new-crop shipments due to smaller-than-expected U.S. winter wheat planted area and continued strong export competition. Rice is forecast at $1.7 billion, unchanged from the previous forecast. Volumes are expected to remain the same as previously forecast, as improved prospects for long-grain exports to Central America offset lagging shipments to South America.

Oilseeds and products exports are projected at $27.8 billion, down $100 million, driven by lower soybean volumes. Export unit values are unchanged despite record U.S. production and declining China soybean demand. Continued strong soybean meal demand, considering reduced output in Argentina, continues to add value to U.S. exports, offsetting some of the decline in the soybean sector. Soybean oil remains virtually unchanged from November's forecast.

The cotton forecast is unchanged at $5.9 billion. Higher expected exports t o Turkey, due to a smaller domestic crop, are offset by weaker import demand in Vietnam. Volume is unchanged.

The livestock, dairy, and poultry export forecasts are raised $300 million to $30.4 billion, largely as gains in beef, pork, poultry, dairy, and other products offset declines for hides, skins, and furs. The beef forecast is raised $100 million to $7.7 billion on sustained demand despite stronger prices. The pork forecast is raised $200 million to $5.4 billion, mostly on stronger-than-expected unit values. Variety meat exports are unchanged at $1.5 billion. Hides, skins, and furs are lowered $300 million as weak global demand for leather depresses prices and volumes. The forecast for poultry and products is raised $200 million, largely due to robust demand for competitively priced broiler meat. Dairy products are raised $100 million as stronger global prices are expected to more than offset lower volumes.

Horticultural product exports are unchanged at $35.3 billion. Whole and processed tree nuts are unchanged at $9.1 billion, with majority of the shipments destined for Europe and Asia. Fresh fruit and vegetables are forecast unchanged at $7.4 billion, with top markets including Canada, Europe, and South Korea. Processed fruit and vegetables are unchanged at $7.2 billion.

Click here to review the complete report from the ERS, including all the charts of supporting data.



 

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