The agricultural trade projections for 2018 are looking up in general; exports steady, imports down, and a larger trade balance in the U.S.’ favor. More exports and more imports are expected in the cattle and beef trade, but a better balance is also projected.
The USDA recently released its bi-annual Outlook for U.S. Agricultural Trade report. The report overviews all agricultural trade for the coming year. In general, the USDA expects Fiscal Year 2018 (FY18) exports of U.S. agricultural products will reach $140 billion in value, compared to an estimated $117 billion in imports. This makes for a projected trade balance of $23 billion in the U.S.’ favor.
By comparison, FY17 exports were valued at $140.5 billion, with imports of $119.1 billion, making for a trade balance of $21.3 billion.
The recent estimated export value was up compared to the earlier August predictions. The report attributed the change to a greater-than-expected demand for corn and distiller’s dried grains with soluables on the global market, particularly in Mexico. Mexican sorghum supplies are sharply down, driving Mexican demand for imported corn, feed grains, and feed grain derivatives. This is expected to continue.
Cattle trade
As mentioned, the cattle and beef trade is expected to increase overall. While the U.S. is projected to export more beef and veal (meat and variety meat; fresh, frozen, and processed; simply “beef” going forward) in FY18 compared to FY17, and for a higher value, it is also expected to import more cattle and calves.
Projected U.S. exports of beef in FY18 stand at 4.19 billion pounds, valued at $8.1 billion. This compares to FY17’s 3.92 billion pounds, valued at $7.98 billion.
However, FY18’s cattle import projections have also grown. USDA projects the U.S. will import 1.9 million head of cattle and calves in FY18, valued at $1.7 billion. This compares to FY17 when the U.S. imported 1.77 million head of cattle and calves—almost entirely from Canada and Mexico—valued at $1.54 billion.
The USDA expects nominally lower beef imports into the U.S. in FY18 at 2.2 billion pounds, valued at $4.6 billion compared to $5.12 billion in FY17.
Taken together, the projected trade balance on cattle and beef is expected to widen slightly to $1.5 billion in FY18. The cattle and beef trade balance in FY17 was $1.31 billion.
The beef export projections are based on larger-than-expected international beef demand in the first months of FY18, and on general economic improvements around the world.
“World per capita [gross domestic product] growth is expected to reach 1.9 percent in 2017 and 2.0 percent in 2018,” the report noted. “This represents a broad-based pick-up in economic activity across developed and developing countries, compared to growth of 1.4 percent in 2016.”
It also projected that oil prices will go up slightly, but will remain low relative to recent highs and will “continue to provide farmers, manufacturers, fertilizer producers, and farm product exporters a low-cost environment.” — WLJ
