United States agriculture exports could reach the lowest level since fiscal 2012, if fulfilled, according to the USDA’s Economic Research Service and Foreign Agricultural Service Outlook for U.S. Agriculture Trade report.
"The strong pace of American agricultural exports continues, with a trade surplus of more than $23 billion, a $1 billion increase from earlier projections for fiscal year 2015. Fiscal years 2009 to 2014 represent the strongest six years in history for U.S. agricultural trade, with U.S. agricultural product exports totaling $771.7 billion,” said Agriculture Secretary Tom Vilsack. “For many American products, foreign markets now represent more than half of total sales. U.S. agricultural exports now support more than one million jobs here at home, a substantial part of the 11.7 million jobs supported by exports all across our country. Expanded U.S. trade overall has added roughly $13,000, on average, to every American family's income. Fiscal year 2015 exports are now forecast to be the third-highest on record, led by a strong performance in bulk commodities such as grains, animal feeds, and oilseeds.”
For fiscal year 2015, the USDA lowered the agriculture export forecast to $140.5 billion, $12 billion below the record-setting levels established last year. Lower exports of high-value products (nonbulk) account nearly the entire decline from the previous forecast.
Furthermore, Agriculture Secretary Vilsack stresses the importance of free trade agreements.
"This most recent forecast also underscores how free trade agreements have benefitted the American economy through farm goods. In the combined 20 countries where the United States has free trade agreements, agricultural exports have remained relatively steady so far this fiscal year. Exports to countries where the United States lacks the assurances offered by trade agreements have declined this year, highlighting why it is so important for Congress to act and pass strong trade promotion authority legislation,” he adds." Every day without trade promotion authority, American agriculture suffers as competitors negotiate their own agreements and lower global standards when it comes to environmental impact, consumer safety, and working conditions. USDA will continue to fight to get the best deal for farmers and ranchers, but our ability to open new markets and create new customers is limited without Congressional action."
Global economic outlook
World economic growth is expected to rise from 2.7 percent in 2014 to 2.9 percent in 2015, driven by continuing solid growth in developing Asia. Brent crude oil has stopped its decline, after bottoming at below $50 per barrel in January. The JP Morgan real effective dollar index averaged 93.99 for the fourth quarter 2014 and appreciated to just over 100 for the first quarter 2015. The real dollar in 2015 is expected to average almost 9 percent above 2014. The recent dollar appreciation has accelerated significantly in the largest U.S. agricultural export markets.
Overall, the economy in North America is expected to grow 2.5 percent in 2015, virtually unchanged from 2014. In the United States, strong labor market indicators in late 2014 and early 2015 point to more jobs and rising wages through 2015, lifting consumer spending. Steady U.S. growth in 2015 provides a neutral environment for Canadian and Mexican exports. Lower oil and commodity prices in 2015 should moderate the gains in these economies from higher export volumes as oil and gas revenues fall in 2015. The recessions in Argentina, Brazil, and Venezuela will sharply slow growth in South America in 2015. Europe is expected to grow faster in 2015 as consumer and business spending modestly recovers. However, the expected 1.9-percent growth in 2015 will pull world growth down.
Fiscal 2015 livestock, poultry, and dairy exports are reduced $500 million to $31.3 billion as lower dairy and poultry product exports are not offset by gains in other livestock products. Dairy products are lowered $300 million to $6.2 billion as exports face strong competition in an oversupplied market. Beef and pork exports are unchanged at $6.5 billion and $4.8 billion, respectively, as a relatively strong dollar continues to constrain shipments. However, exports of beef and pork variety meats are up $200 million as demand remains robust. Poultry exports are lowered $100 million to $6.0 billion due to highly pathogenic avian influenza-related (HPAI) trade restrictions by a number of countries
Meanwhile, U.S. agricultural imports are forecast at a record $117.0 billion, down $2.0 billion from February, but $7.8 billion higher than in fiscal 2014. The U.S. agricultural trade surplus is forecast at $23.5 billion, down from $43.3 billion in fiscal 2014.
Agricultural imports shipped during the first half of fiscal 2015 totaled $57 billion; an additional $60 billion is projected for the second half of the year. This represents 7 percent more imports than in 2014 as the domestic economy continues to grow and the dollar’s higher purchasing power boosts consumer spending.