USDA bullish on agricultural trade growth
The U.S. agriculture sector recorded record agricultural exports in 2021, 23% higher than the previous year and 10% higher than the previous record set in 2014. USDA leaders expect 2022 to be even better, according to information shared at the virtual USDA Ag Outlook conference held February 24-25.
Agriculture Secretary Tom Vilsack said the outlook for agriculture is “bright, strong and positive”.
To start the day, USDA Chief Economist Seth Meyer said rising value, not just volume, helped boost agricultural exports in 2021. The 2021 fiscal year ended with record exports at $172.2 billion based on very high commodity prices and US-backed record exports. -Phase one agreement with China. Specifically, oilseeds were a major contributor to the increase in US agricultural exports in 2021, up $5.8 billion, and ethanol also saw an increase of $0.5 billion.
Meyer says that while demand for pork in China has weakened thanks to the recovery of hog herds, the losses are more than offset by extremely strong demand for beef and poultry that has surged in 2021, which is expected to continue until ‘in 2022.
USDA Foreign Agricultural Service Administrator Daniel Whitley says the USDA is pleased to see the strong performance of a wide range of U.S. agricultural products, including grains, meats, horticulture and consumer goods .
“It was just a story of unprecedented demand,” says Whitley. “And it just wasn’t values, it was volumes.”
China once again became the top destination for US agricultural products at $33.4 billion for the year, followed by Canada at $24.1 billion and Mexico at $23.9 billion, each setting new records. South Korea and the Philippines also saw record trade levels, and there were 28 markets where U.S. exports exceeded $1 billion, Whitley says.
The outlook also suggests a fiscal year 2022 forecast of $183.5 billion for U.S. agricultural trade, building on the previous record year. Whitley called the projection “unheard of” and said it speaks to the reputation of American agriculture and the demand for American agricultural products around the world.
Whitley says the race to $200 billion in agricultural exports is on and he expects it to happen in the next few years. “These exports are literally on fire.”
Krysta Harden, CEO and President of the US Dairy Export Council, says dairy products have seen an increase of 10% in volume and 18% in value.
New agricultural market opportunities
The No. 1 target for expansion of US agricultural products is in Southeast Asia, which includes Vietnam, Thailand, Malaysia, Indonesia and the Philippines, with the fastest growing low-income consumers. income to the middle class, said Whitley. “We are talking about a series of taste and consumption models that are becoming westernized every day.”
Harden says the dairy industry also sees promise in expanding exports to Southeast Asia and Japan. “We’re hopeful for continued growth there, certainly in the 16 countries considered Southeast Asia,” Harden says. She says Malaysia and Thailand also have significant opportunities to increase US dairy imports.
Vilsack and Whitley’s comments shared last week during the trade mission to Dubai reinforced an overwhelming enthusiasm for American agricultural products in the Middle East that Whitley said was “unprecedented.” U.S. agriculture also remains known as a reliable supplier, particularly in acknowledging record trade levels despite ongoing supply chain constraints.
Whitley says that because of this trade mission, he sees the Middle East becoming the No. 2 target market for U.S. agricultural products after more than 300 successful trade interactions between state agricultural departments and regional agricultural and commodity groups. basic. “There’s a lot of brand awareness of American agricultural products,” Whitley says, adding that the respect, appreciation and willingness to want to build a better business relationship with American agriculture is already there.
Jim Sutter, CEO of the US Soybean Export Council, said it will be important to help nurture growing economies in early-stage markets, particularly in key regions of the Middle East and India. South East Asia.
“I think first and foremost the more we can do just to foster this growing economic activity around the world, that’s a real underlying engine of growth for all American agricultural commodities and certainly for soybeans, because we We’re here because people want to improve their diets,” says Sutter.
Sutter also says committing to free trade deals that can be a win for both countries could also build on the success of U.S. agricultural exports. “Even if you don’t make it all the way to a free trade deal, maybe you just have a strong trade relationship,” he says.
Sutter says both India and Africa have offered glimmers of hope in diversifying new markets for American agricultural products. For the first time last year, India imported soybean meal for a few months after realizing it would not be able to produce enough to feed its poultry, aquaculture and dairy herd.
Agricultural exports face headwinds
US agricultural exports are facing headwinds. For example, containerized shipping, which accounts for more than 35% of the value of U.S. agricultural exports, continues to face disruption in 2022. Meyer says U.S. containerized agricultural exports to Southeast Asian markets and the East (excluding China) were particularly affected, with shipment volumes down more than 20% compared to the second half of 2021.
Despite the record commercial year for dairy producers, they have been hard hit by port problems. When asked what agricultural exports might have been under normal supply chain conditions, Harden replied that it would undoubtedly have been higher.
Harden says the rules of the game aren’t always level playing field for dairy farmers. “It’s not always fair. It’s not always equal. A lot of our competitors seem to have a little better, a little better deals in some places that we have to work with,” she explains. “These are non-trade barriers that we also have to deal with. And a lot of times, in all of agriculture, sometimes we feel like we’re a pawn in some of these deals.
Meyer notes that there are other global uncertainties that could affect the forecast for U.S. agricultural trade in 2022. For example, Russia’s invasion of Ukraine could have global economic and trade implications. Together, the two countries account for almost a quarter of world grain exports.
“While we can expect global and regional grain markets to shift to other suppliers and markets, which could limit the direct effects on U.S. agricultural exports, there would be broader short-term macroeconomic effects that would ripple through global economy depending on the severity and duration of the conflict,” says Meyer.
Sutter also suggests that the situation in Ukraine, as well as China, reinforces the need for broad market diversification. “You can never know. The world is filled with uncertainty,” he says.
Whitley says China remains a concern because at any time the country could wake up for whatever reason and stop importing US agricultural products. “We need to identify and develop some of these new markets that we are talking about so that we are better prepared if this were to happen where relations with China freeze, and we have seen our exports reduced by $ 35 billion to a market .,” Whitley says. “It’s nothing to sneeze at, and it’s not easily replaceable, so just make sure we’re ready to do what we need to do and branch out if we have to.”