U.S. wheat export value will be up 66 percent to $9.8 billion, with volume up 11.3 percent to 34.5 MMT with less competition from the drought reduced Black Sea crops. Export value for corn will be up 16 percent to $12.3 billion, but volume is expected to decline 3.8 percent to 50.0 MMT due to lower production in the U.S. Soybeans, meal and oil will have another record year in export value at $24.8 billion, up 12.2 percent from last year, while volume will be down 2.2 percent as record large whole soybean exports of 42.7 MMT will be offset by a 17.8 percent decline in soybean meal exports to 8.3 MMT. Record high cotton prices will push cotton export value to $8.0 billion, up from $4.8 billion last year while export volume will increase only 0.1 MMT to 3.4 MMT because U.S. carryover stocks are expected to be at minimal levels. Rice exports will be mostly unchanged with exports value again at $2.3 billion, while volume increases 0.1 MMT to 4.4 MMT.
Beef and veal export value will be up 15.7 percent at $3.7 billion, while volume increases 14.3 percent to 0.8 MMT. Pork export values will set a record at $4.6 billion, up 17.9 percent from $3.9 billion last year and in 2008 with volume of 1.6 MMT. Young chicken meat export values are expected to be unchanged in FY2010 at $3.0 billion as volume holds steady at 3.0 MMT. Dairy product sales will be $3.2 billion, down from $3.4 billion last year. Horticultural products are expected to set another record at $24.3 billion, up from $22.6 billion in FY 2010, led by fresh fruits and vegetables at $6.2 billion, processed fruits and vegetables at $5.9 billion and tree nuts at $4.3 billion.
Asia is expected to continue to be the largest U.S. agricultural export region at $54.8 billion, 43.3 percent of U.S. exports. NAFTA partners Canada and Mexico are the second largest region at 26.9 percent. The two regions account for 70 percent of U.S. exports. Canada continues to be the largest market at $18.0 billion, followed by China at $17.5 billion. These are two totally different markets with Canada purchasing a wide range of bulk and further process products and China’s purchases concentrated in a few bulk products. Horticultural products account for 40 percent of the U.S. sales to Canada. Of $15 billion of sales to China in FY 2010, soybeans were $9.3 billion, cotton $1.7 billion and hides and skins $900 million. U.S. agricultural imports from China are expected to be only $3.3 billion in FY 2011, while imports from Canada are estimated at $17.5 billion.
After Canada and China, Mexico is the third largest export country for the U.S. at $16.0 billion followed by Japan at $13.0 billion and South Korea at $6.0 billion. The 27 countries of the EU are expected to have imports from the U.S. of $9.1 billion in FY 2011. The Middle East/North Africa region will have imports of $10.9 billion, up from $8.4 billion in FY 2010 and just surpassing FY 2008’s peak of $10.8 billion. Turkey at $2.7 billion, with a 45 percent increase in imports in 2010 and a 30 percent expected in 2011, and Egypt at $2.0 billion, with increased grain sales, are the two largest markets in the region.
As noted earlier, about three-fourths of the increase in the value of imports is related to higher market prices. According to USDA, “world food prices are up 8 percent in the past year and a half, while beverage prices are up 24 percent, including coffee, cocoa, tea, wine, and beer prices.” The segments where USDA expects the biggest increases in volume are fresh fruits with a 0.4 MMT increase to 9.5 MMT, and fresh vegetables with a 0.3 MMT increase to 5.7 MMT, cocoa and chocolate with a 0.3 MMT increase to 1.4 MMT, and processed vegetables with a 0.2 MMT increase to 3.1 MMT. Horticultural products are expected to account for $3.0 billion of the $6.5 billion increase in imports with fresh fruit up by $0.7 billion and fresh vegetables up by $0.6 billion. Sugar and tropical products will account for another $2.0 billion of increased imports, with natural rubber up $0.6 billion to $3.0 billion, cocoa and chocolate up $.05 billion to $4.7 billion, sweeteners up $0.5 billion to $4.6 billion and coffee up $0.4 billion to $4.8 billion. Livestock, dairy and poultry product imports are expected to be up $0.7 billion to $11.5 billion.
Canada will be the largest import source for the U.S. for agricultural products at $17.5 billion for FY 2011, followed closely by Mexico at $15.0 billion, including two-thirds of imported fresh vegetables, and the 27 countries of the EU at $15 billion. Other major importers include China at $3.3 billion, Indonesia $2.9 billion, Brazil $2.7 billion, Chile $2.4 billion and Australia $2.3 billion.
These export and import projections come with the usual caveats about government monetary and fiscal policies and private economic activities that impact economic growth. U.S. GDP growth is assumed to be 2.7 percent higher in 2010 and 2.5 percent in 2011. USDA expects world trade volume to expand 14.6 percent in calendar year 2010, almost offsetting the decline in 2009, with trade to grow by 7.5 percent in 2011. Countries cannot expand agricultural imports unless they are selling other products in world markets. Sovereign debt problems in the EU and credit tightening in China are adding to the uncertainties.
Two years ago when commodity prices were in sharp decline and economic growth was slowing around the world, it would have been hard to predict the rapid recovery in agricultural trade. Open agricultural and non-agricultural trade under WTO rules allowed trade to keep flowing and agricultural trade avoided an extended period of decline. That U.S. agricultural export volumes will challenge highs reach in FY 2008 reflects the ability of the world economy to adjust to market condition.