According to the Agricultural Outlook Forum (AOF) on February 23, the USDA provided that export forecasts for all major commodity groups are down, with corn, sorghum, and soybeans expected to have the most reduction.
Overall grain and feed exports are projected at US$43.8 billion, down US$2.4 billion from November, while the total oilseed and product exports are projected at US$43.4 billion, down US$900 million from the previous forecast.
On the other hand, corn, sorghum, and soybean exports are forecast at $16.6 billion, $800 million, and $32.0 billion respectively.
The projections for soybean exports are due to lower U.S. supplies and higher competition from Brazil.
As much as the US has had to grapple with lowered production, global economic conditions have affected the purchasing power of most countries, thus affecting the export volumes.
However, the global economic outlook has moderately improved since the November 2022 forecast, and economic growth is expected to remain steady, with the world’s real gross domestic product (GDP) projected to increase by 2.8% in 2023.
For example, China’s economic reopening from strict lockdown policies is likely to impact trade and increase global demand for some commodities, including oil.
This reopening may affect freight rates for ocean-bound cargo, which have continued to fall from their COVID-19 pandemic highs as supply-chain disruptions continue to ease.
Top U.S. export markets relatively unchanged
The strenuous economic conditions globally have not affected US export markets significantly.
China is likely to remain unchanged from the previous forecast, being the largest market for U.S. agricultural exports at US$34 billion, while exports to Mexico also remain unchanged at US$28 billion.
Exports to Canada could be down US$500 million to US$27.8 billion thanks to lower corn demand, while exports to Japan could be US$1.2 billion lower than in FY 2022, due to lower expected corn, beef, and tree nut sales
Grain imports adjusted upwards
While the US is a major global exporter, it also imports lots of products all over the world.
The FY 2023 forecast for grains and feed product imports is adjusted up by US$200 million, or 2%, from the previous forecast to US$20.6 billion.
This forecast is due to reduced yields, high production costs, and tight inventories that have kept the pressure on prices across grains and feed products, both in the U.S. and globally, despite easing prices for grains like wheat in recent months.
In addition, grain products retain relatively high values and are responsible for most of the expected increase in the grains and feed product forecast.
The forecast for oilseeds and products is raised by US$100 million from last quarter to US$17.6 billion thanks to increased imports of vegetable oils.
This increase in vegetable oil imports is due, in part, to the relatively high domestic prices, especially canola oil.
Overall, FY 2023 U.S. agricultural imports are forecast at US$199 billion, unchanged from the November forecast, representing an increase of US$5 billion above FY 2022 imports of US$194 billion.
This forecast is informed by an increase in livestock, poultry and dairy, grains and feed, and oilseeds imports, offsetting decreases in horticultural, sugar, and tropical product imports.