USDA Sees Lower Agricultural Exports in 2016, Record Imports

Posted by Jackie Pucci|1 March 2016

U.S. Department of Agriculture forecasts agricultural exports in 2016 at $125 billion, $6.5 billion below its November projection and $14.7 billion below 2015 exports. Lower prices, strong competition, and reduced demand account for most of the decline, USDA said.

U.S. agricultural imports are forecast at a record $118.5 billion, down $3.5 billion from November but $4.5 billion higher than in 2015.

USDA said a strong dollar relative to weaker currencies in Brazil and Argentina has reduced U.S. competitiveness. The agency forecast grain and feed exports at $27.2 billion, down $1.4 billion from the November forecast as strong competition reduces volumes and ample global supplies reduce unit values of corn and wheat. Oilseed and product exports are forecast at $25.4 billion, down $900 million from the previous forecast in response to lower soybean and soybean meal export volumes and prices. Cotton exports are forecast at $3.2 billion, unchanged from November. The forecast for livestock, poultry, and dairy is lowered $2.5 billion from the previous forecast to $25.7 billion as lower prices drive declines for virtually all products. Horticultural exports are lowered $1.8 billion, but remain at a record $34.7 billion, mainly due to lower volumes and unit prices for many commodities (a combination that has not affected exports since 2009).

“Despite slowing growth rates in many developing countries, higher world growth of 3.1% is expected in 2016. Developing country growth in 2015 is estimated at 3.8% and is expected to be 4.1% in 2016. This is robust growth, but it is a significant slowdown compared to the 6.2% average growth rate over the previous decade,” according to USDA.

In addition, USDA said that the recession in Brazil in 2015 is expected to persist, if not deepen, in 2016. “Brazil is facing a severe budget crisis as its current policies are unaffordable in an environment of low commodity prices and difficult borrowing conditions. The real is expected to continue weakening as Brazilian economic conditions deteriorate further, in spite of expected intervention to support its value. Brazil and Argentina are two of the United States’ closest competitors in global agricultural markets, and the decline in the value of their currencies increases their export competitiveness. However, it also implies higher production costs as the cost of imported inputs also rises,” the agency said.