The Department of Agriculture predicts another record year of U.S. agricultural exports. Micheal Clements shares more on the 2022 trade forecast.
Clements: The Department of Agriculture released its export forecast this week during its Agricultural Outlook Forum. American Farm Bureau Federation Senior Economist Veronica Nigh says the projections spell good news for farmers and ranchers.
Nigh: USDA is projecting another banner year for U.S. ag exports. They’re projecting, in fiscal year ‘22, ag exports will reach a record $183 billion, which is up over 11 billion from fiscal year ‘21. I think it’s important to note that fiscal year ‘21 was already a record. So, clearly, as USDA said, the race to $200 billion is on.
Clements: China failed to reach Phase One Agreement purchasing commitments by roughly $13 billion, but should remain the top U.S. customer.
Nigh: China did have record imports of ag products last year, over $33 billion. And while USDA is projecting that U.S. ag exports in fiscal year ‘22 will be $36 billion, which is up about three billion from last year, they are not projecting that China will make up much of their missed Phase One target. So, yes, they will continue to be the number one customer, but how much progress they’ll make towards digging out of their Phase One commitment hole is yet to be seen.
Clements: The forecast suggests higher unit values will offset projections of lower volumes. Nigh says the forecast for record exports comes despite persistent headwinds.
Nigh: And one challenge that we’re quick to point to and that we’re hoping to find legislative solutions for is the congestion that we’re seeing at U.S. ports. In our estimation, U.S. ag exports in just May through September of 2021 would have been over $4 billion higher if we’d seen better access to containers and to shipping routes out of the U.S. So, while yes, we’re certainly looking at record exports, we’re working hard to try to clear out hurdles for U.S. ag exporters so that we can reach our full potential.
Clements: Micheal Clements, Washington.
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