Perspective On NAFTA From Ag’s Point Of View

Today’s newsletter, a shortened version of a study by Keith Good, social media manager for the farmdoc project at the University of Illinois, provides a brief overview of updated USDA agricultural export data.

It also looks at recent news items regarding the NAFTA renegotiation, with particular focus on perspective.

 

BACKGROUND

 

The USDA currently is projecting fiscal year 2018 agricultural exports at $140 billion, $1 billion more than its August forecast, but slightly below the fiscal year 2017 level of $140.5 billion.

Last week, the USDA updated some of its monthly agricultural trade data, which showed the value of US agricultural exports for October, the first month of the 2018 fiscal year, had risen to $13.2 billion.  This was $2.6 billion more than the $10.6-billion value of exports in September.

Last Wednesday, Gary Crawford of USDA radio, said that for the first 10 months of 2017, the total value of US agricultural exports was 4% higher than for the same period in 2016.

In the radio segment, USDA trade analyst Bryce Cooke pointed out that the value of soybean exports was up 2% from last year, while the value of corn exports had fallen by 5%.

 

SOME SPECIFICS

 

By volume, Mexico was the top destination for US corn and wheat through the first 10 months of the calendar year, while China continued to be the dominant destination for US soybeans.

With respect to livestock trade, the December issue of “The Economic Landscape,” from USDA’s Agricultural Marketing Service, noted that for pork, “Year-to-date exports increased 7% in volume and 10% in value compared to 2016.  The largest overseas markets for US pork were Japan, Mexico and Canada.”

For beef, “The Landscape” reported that, “In the first 10 months of the year, beef export volume rose 9% from last year, and value rose 16%.  Japan, South Korea and Hong Kong were our largest export markets in October.”

Meanwhile, Barbara Soderlin reported Saturday at the Omaha World-Herald Online that, “Nebraska has led the nation so far this year when it comes to beef sales to its new customer, China.  No surprise, since Nebraska — already the country’s biggest exporter of beef — was the first state to ship to China when the market opened this summer.

“Nebraska’s shipments to China, totaling $8.7 million so far, are only a small part — less than 1% — of Nebraska’s beef export totals, which were valued at $1.04 billion through October.

It should be no surprise then that farm state lawmakers continue to urge President Donald Trump not to abandon the North American Free Trade Agreement.  It could be too easy for Mexico or Canada to find new trade partners and leave the US out.

 

CATTLE, BEEF RECAP

 

Only 75 head of fed cattle sold on the Livestock Exchange video auction Wednesday at $116 per cwt.  No cash action was reported.

Scattered cash cattle trade came last Tuesday at $117.50 to $118.50 per cwt on a live basis, down $1.50 to $3 from the previous week with more Wednesday at $118 and at $188 on a dressed basis, down $1 to $2.  However, more trade came Thursday at $117 live and $187 dressed, down $2 and down $2 to $3, respectively.

The USDA’s choice cutout Wednesday was down $1.58 per cwt at $202.48, while select was off $0.90 at $185.02.  The choice/select spread narrowed to $17.46 from $18.14 with 114 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Tuesday was $153.64 per cwt, down $0.25.  This compares with Wednesday’s Jan settlement at $145.65 per cwt, down $1.45.