US agricultural exports are expected to fall in fiscal year 2023 from record-high levels recorded in the last fiscal year, but will still hold strong, while imports will hit a record high, Agriculture Department Chief Economist Seth Meyer told USDA’s annual outlook forum yesterday.
“Will it be as good as 2022? No, but it will still be a good year,” he said.
While farm exports are not expected to break any records this year, they will still exceed historical highs, Agriculture Secretary Tom Vilsack told the audience.
US agricultural exports hit a record $196.4 billion in fiscal 2022, driven by high commodity prices and strong demand.
Farm exports will be lower in the current fiscal year , according to USDA’s revised agricultural trade forecast released yesterday. USDA is forecasting exports will fall to $184.5 billion while imports will hit a record high of $199 billion. The forecast reflects slowing global economic growth, a relatively strong US dollar, softening commodity prices and lower export volumes for some commodities.
The largest declines in fiscal 2023 agricultural exports are forecast for corn, sorghum and cotton,
which are all lowered on volume and in the case of cotton, also on price. This in part reflects lower forecast US production of these crops in 2022/23 relative to the previous year, as well as soft global demand for cotton given the broader macroeconomic situation, according to USDA.
Increasing competition from other suppliers, particularly for corn and cotton, also contribute to the lower forecast. Fiscal year 2023 exports for most other commodity sectors are expected to be lower, although in many cases from record levels in fiscal 2022.
The fiscal year 2023 export forecast, if realized, would still be the second highest on record, according to Mr. Meyer.
China remains the top destination for US agricultural exports, although exports are projected to fall by $2.4 billion from fiscal 2022’s record of $36.4 billion, reflecting reduced sorghum, cotton and tree nut exports.
US farm exports to Mexico and Canada are projected to fall slightly, with a larger decline in exports to Canada due to reduced corn sales. This would make Mexico the second largest US agricultural export market if the forecast is realized.
Exports to Japan – the third largest market for US farm exports – are projected to fall by $1.2 billion, due to lower expected corn, beef and tree nut sales.
Exports to the EU also are expected to fall slightly, while the forecast for exports to South Korea is on par with FY 2022’s levels.
Imports, meanwhile are forecast at a new record of $199 billion, up 3 percent from fiscal 2022, which was the previous record.
The import forecast reflects the relative strength of the US dollar, continued strength in import growth and a somewhat improved outlook for the US economy for 2023 relative to what was forecast last year.
Horticultural products remain the largest import category, forecast at $99.9 billion, or nearly half of the total. While fruits, vegetables, and tree nuts make up almost half of this category, the rest is comprised of other horticultural products, a category which includes a wide variety of goods. Over half of these other horticultural products are distilled spirits, wine and beer, followed by miscellaneous horticultural products, such as processed foods and ingredients, as well as essential oils, nursery and cut flowers.
Mexico is forecast to remain the top supplier of agricultural products to the United States, followed by Canada and the EU.
USDA noted that there are market and policy uncertainties that could affect the trade forecast for 2023, including the continued impact of Russia’s invasion of Ukraine on global grain and oilseed markets.
Mexico’s recent decision to ban certain types of biotech corn, also creates uncertainty and can impact the trade outlook, Mr. Meyer said.
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