USDA Lowers Ag Trade Forecast for FY 2023
The quarterly Outlook for U.S. Agricultural Trade, released by USDA’s Economic Research Service and Foreign Agricultural Service, also shows lower imports than expected for FY 2023 but predicts a larger-than-expected trade deficit of $17 billion. Just three months ago, USDA was expecting a negative trade balance of $14.5 billion – the first since FY 2020, when the U.S. closed out the year with a $3.7 billion deficit.
USDA now says it’s expecting stronger exports of soybeans, cotton and dairy in FY 2023, but it highlighted new predictions for weaker shipments of commodities like wheat, corn and beef.
The U.S. is now forecast to export $14.5 billion worth of corn, $2.1 billion less than the USDA agencies were predicting in February amid competition with Brazil – which just began planting its second-crop corn, commonly known as the safrinha.
“Brazil is forecast to have a record production for its upcoming safrinha crop, to be harvested starting in June 2023, which has eased global prices and made Brazil’s corn more price competitive than U.S. corn,” USDA said in the new outlook.
USDA left its sorghum export forecast unchanged at $800 million, but cut its wheat prediction $900 million to a total of $7.4 billion. The cut in wheat exports is “significantly due to smaller-than-expected winter wheat production for 2023-24 on higher acreage abandonment and reduced yields amidst drought conditions,” but USDA also stressed “increased competition in Western Hemisphere markets from regional competitors Canada and Argentina.”
The USDA forecast for ethanol exports in FY 2023 was left unchanged in the outlook at $3.6 billion.
But USDA also increased its forecasts for the value of some ag commodities like soybeans and cotton.
U.S. exporters are now forecast to sell $6 billion worth of cotton, $100 million more than USDA predicted in February.
“U.S. market share of global exports is expected to rise relative to the previous forecast and displace Brazilian and Indian cotton,” according to the ERS-FAS report.
The USDA agencies raised their forecasts for both the value of soybeans (up to $32.3 billion) and soymeal ($6.3 billion), but they lowered their prediction for soyoil exports because of rising demand in the U.S. for renewable diesel.
“Soybean oil exports are reduced $200 million from the previous forecast as export volumes are forecast at the lowest levels in decades,” according to the report. “This reflects a large premium for U.S. soybean oil compared with competitors due to strong biomass-based diesel demand in the United States.”