USDA analysts have sliced another $4.5 billion from their previous forecast of 2019 US agricultural exports from their previous forecast in May.
Illinois Farm Policy News reported that Gary Crawford explained in a segment for USDA Radio on Aug. 29 that in May, USDA analysts were forecasting the 2019 fiscal year’s US ag exports to be $137 billion, down $4.5 billion from the previous forecast and down $6.3 billion from 2018.
However, USDA Chief Economist Warren Preston said the latest forecast sliced another $2.5 billion from that, down to $134.5 billion.
The latest radio segment added that Preston said back in May the export forecast cuts were mainly from the China situation. But he told Illinois Farm Policy News, “The fiscal 2019 exports to China from May to August were actually increased by $800 million to $7.3 billion,” mainly from an uptick in Chinese purchases of soybeans and pork.
“The declines in overall export prospects were coming from lower sales to several other markets and generally from “Decreased economic growth world-wide, a relatively strong US dollar, and a lot of trade uncertainty,” Preston said.
2020 LOOKS BETTER
Meanwhile, the Aug. 29 Economic Research Service Trade Outlook said, “US agricultural exports are projected to reach $137.0 billion in Fiscal Year 2020, up $2.5 billion from the revised forecast for FY 2019. This anticipated increase is primarily driven by higher (expected) exports of pork, beef, soybeans and horticultural products.”
Pork exports were forecast at $6.3 billion, up $800 million from FY 2019, as a result of higher volumes and unit values, partially resulting from the repeal of Mexico’s retaliatory tariffs and an increase in global pork demand linked to the African Swine Fever epidemic.
Beef and veal exports were forecast at $7.8 billion, up $300 million from FY 2019, on higher volumes and unit values.
More narrowly for FY 2020, the Trade Outlook stated that, “Soybean exports are forecast to rise $400 million to $16.8 billion on higher volumes. Cotton exports are forecast up $100 million to $5.8 billion.
GRAIN, FEED EXPORTS
Grain and feed exports were unchanged. Exports to Canada and Mexico were forecast at $21.5 billion, up $400 million from FY 2019, and $19.8 billion, up $500 million, respectively. Agricultural exports to China were forecast at $7.5 billion, an increase of $200 million from FY 2019, on higher expected pork sales.
FY 2020 grain and feed exports were forecast at $30.1 billion, unchanged from the revised 2019 estimate. Wheat exports next year were forecast up $100 million from this year at $6.3 billion, as higher unit values offset slightly lower volumes.
Demand for US wheat likely will be strong in key markets like Mexico and the Philippines, but shipments to Egypt likely will weaken in light of abundant competitor supplies.”
“Corn exports are forecast up $200 million to $9.4 billion on larger volumes but lower unit values, as easing supply concerns have improved the prospects for US exporters.”
CATTLE, BEEF RECAP
Cash cattle trade was reported Wednesday at $103 per cwt on a live basis, and down to $100 on Thursday, $2 to $5 lower than last week. Dressed-basis trade was at $165 to $167, $5 to $6 lower than last week.
The USDA choice cutout Thursday was down $1.23 per cwt at $229.42, while select was off $4.48 at $204.47. The choice/select spread widened to $24.95 from $21.70 with 131 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $138.43 per cwt, down $0.41 from the previous day. This compares with Thursday’s Sep contract settlement of $134.40, down $1.15.