Fiscal 2008 agricultural exports are forecast at $101 billion, up $10 billion from November’s forecast and $19 billion above 2007.

Higher unit values for wheat, feed grains, and soybeans and products account for about $6 billion, or just over half of the overall increase since November.

Grain and feed exports rise to a record $32.7 billion; oilseeds and products are expected to reach a record $18.9 billion.

Foreign demand remains remarkably strong given sharply higher prices. Tight competitor stocks boost demand for U.S. wheat and corn, with a similar story unfolding for soybeans.

Total bulk commodity exports rise 5 million tons to near-record levels, mostly on gains for wheat and corn. High-value animal and horticultural product exports, both setting new records, boost the export forecast $2 billion.

Shipping volumes for most meats are raised on strong demand, a weak dollar, and adequate domestic supplies. Similar market conditions benefit horticultural exports.

Fiscal 2008 agricultural imports are forecast at a record $76.5 billion, up $1 billion from November and $6.5 billion above 2007

Vegetable oils, dairy products, and grain products account for the largest upward adjustments from the November forecast. Horticultural product imports are forecast to rise $2.6 billion above 2007, with two-thirds of that gain from fruits and vegetables. Grains and feeds, grain products, and oilseeds and products account for 37 percent of the overall increase, mainly the result of higher prices.

The fiscal 2008 forecast for grain and feed exports is raised to a record $32.7 billion, up $5.2 billion from the November forecast and $8.5 billion above last year.

The revision is mostly due to surging unit values for wheat and coarse grains, reflecting reduced competitor exportable supplies and strong demand. The forecast for fiscal 2008 wheat exports is up $2.6 billion to $10.1 billion, and mostly reflects higher unit value although volume is also increased.

U.S. wheat shipments have started to slow in the last few months as many buyers bought ahead in the fall. Sales are also slowing due to limited exportable U.S. supplies and other competitors entering the market such as Kazakhstan, Argentina, and Australia.

The forecast for coarse grain exports is raised to 70 million tons, up 2 million tons since November due mostly to higher unit value. 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, U.S. supplies have remained ample due to a record corn crop. Record prices have not yet had any significant dampening effect on importers.

In addition, Argentina’s corn export registration ban, now in place for nearly one year, allowed the United States to sell to nontraditional corn importers.

China’s corn exports have remained minimal. With much higher sales than last year, the forecast for sorghum exports is unchanged from November; higher imports from the EU offset lower demand from Mexico. Rice exports are unchanged at 3.8 million tons, but higher unit value boosts sales $100 million to $1.7 billion.

Stronger sales to Saudi Arabia and Turkey more than offset an expected slowdown to Mexico and countries in Central America, which completed purchases earlier in anticipation of further price increases.

The fiscal 2008 export forecast for oilseeds and products is a record $18.9 billion, up $2.6 billion from the November estimate and $5.2 billion higher than fiscal 2007. The revision is mostly due to higher unit values for soybeans (although volume is also raised), but soybean meal and oil forecasts are raised as well. Compared with last year, soybean export volume is still forecast 2.9 million tons lower, but unit values are much higher, reflecting strong demand for feed and non-feed uses. Soybean exports are raised $1.5 billion since November to $11.9 billion, or $3.4 billion above last year.

Growing sales to China, which are expected to top 40 percent of U.S. exports, continue to drive export volume. Meal shipments are increased on improved sales to Asia, while rising soybean oil exports are attributed to China and North Africa. The forecast for fiscal 2008 cotton exports is lowered $200 million from the November estimate to $5.6 billion, but still remains a record. This reduction is due to lower export volume and reflects decreased import demand and greater export competition since November, making it more difficult for the United States to reduce its large carryover stocks. The revised estimate is the result of a 2 percent decrease in forecast world consumption due to lower mill use in China, Pakistan, India, and Turkey. These four markets accounted for nearly 60 percent of U.S. exports last year. Since November, estimates of more production and less consumption in India have expanded exportable supplies in competition with U.S. cotton.

Exports of livestock, poultry, and dairy products are forecast at a record $18 billion in fiscal 2008, up $900 million from the November estimate and $1.7 billion higher than last year.

Increased pork and broiler meat shipments and higher prices for animal fats account for most of the change since November. Beef shipments are noticeably higher than last year, but there is little change in the U.S. beef export forecast as traders continue to face BSE-related restrictions in Asian and other markets.

Pork exports are raised 140,000 tons since November to a record 1.2 million tons. Expanding pork shipments are supported by abundant domestic supplies, a competitive dollar, and firm demand from key importers Japan and Canada.

The revised poultry meat forecast reflects higher broiler shipments and unit value due to firm foreign demand resulting from the weaker dollar. Shipments to key markets Russia and China should continue strong. The forecast for animal fats is raised mostly due to higher unit value as prices rise in vegetable oil markets.

Horticultural product exports are increased $1.1 billion from November to a record $19.7 billion, up $1.8 billion from last year. This outlook is supported by a competitive dollar and strong foreign demand for healthful and convenience foods. In general, export value is rising on both volume gains and higher unit value, and sales are surging to our top market Canada.

Further Reading

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February 2008