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USDA Predicts Record Agricultural Exports

posted on November 29, 2012

With the make-or-break holiday shopping season in full swing, a report on consumer sentiment rose this month to its highest level in nearly five years. 

The Consumer Confidence Index rose more than half-a-point in November to 73.7.  That’s its best showing since February of 2008.  But the gain was tempered a bit Friday when the government reported that consumer SPENDING fell 0.2 percent in October in its weakest showing since May.

The National Association of Realtors reports Pending Home Sales rose 5.2 percent in October. But, orders for big-ticket durable goods to fill those homes were unchanged.  And demand for core capital goods, an indicator of business investment, rose 1.7 percent in their best performance in five months. 

Businesses have been more cautious recently as fiscal cliff uncertainty and a deepening financial crisis in Europe threaten to push some countries into recession. That weighs heavily on U.S. exports.  But shipments from one sector of the economy are booming and the outlook for agricultural trade is bright.     

USDA Predicts Record Agricultural Exports

A mixed outlook for oilseeds and feed exports coupled with cheaper imports of tropical oil and processed fruits and vegetables, has USDA forecasting record numbers for 2013.

Experts with the government agency are saying increased demand for oilseeds and steady requests for horticultural products are all factors in setting record export values at $145 billion. The figures are a little more than 1 percent higher than third quarter projections and almost 7 percent over 2012’s record. The new high-water mark is projected despite a strengthening dollar and reductions in grain, feed and livestock exports. USDA officials predict a weaker greenback in 2013 which would make for lower interest rates and easier financing opportunities in countries purchasing U.S. goods. Other reasons given for the increase were strong demand by China and limited South American competition.

In its last report, USDA pegged imports at a record $117 billion but this quarter estimates were lowered by nearly 2 percent. Slower U.S. economic growth was listed as the cause for a reduction in the forecast for U.S. agricultural imports in 2013 to $115 billion. That would be an 11-percent increase over 2012’s $103.4 billion import tally. The reduced forecast for next year is largely due to lower prices for tropical oils, sugar, rubber and processed fruits and vegetables. Contributing factors have been listed as lower domestic demand for food consumed at home due to U.S. buyers having thinner wallets.

When considered with exports, the figures result in an agricultural trade surplus of $30 billion, down 7 percent from 2012.

USDA predicts slower trade growth throughout the world in 2013. A continuing recession in much of Europe is expected to slow U.S. export prospects and weigh heavily on world growth into early next year.  And while China is expected to increase exports its new domestic policies may not be enough to encourage its citizens to borrow money. But there is still optimism that the expected end of the Eurozone recession, coupled with higher expected U.S. growth in 2013, will help move the world economy towards increased prosperity.

Tags: agricultural exports agricultural imports agricultural outlook China South America


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