After reaching a record high in 2022, U.S. farm exports will plateau amid a world of uncertainties, said the USDA chief economist on Tuesday. The strong dollar and slower economic growth worldwide will be a drag on exports, now forecast by USDA at $193.5 billion this fiscal year, down slightly from the estimated record of $196 billion in the fiscal year that ended on Sept. 30.
“We’ve seen pretty good strength and see our trading partners hang in there as trade value has grown,” said USDA chief economist Seth Meyer, speaking on a panel at the Farm Foundation forum. “And (we’re) looking again at a pretty flat trade picture in the coming year. I wouldn’t get too hung up on what the exact number is yet. We’ve got a long way to go.”
Gregg Doud, chief economist at Aimpoint Research, said farm exports “are going to see very serious headwinds in 2023.”
Commodity prices will be volatile due to factors that include warfare in Ukraine, inflation, global economic gyrations, supply chain disruptions, potential trade disputes and damaging weather, said the panelists at the Farm Foundation event. As an example, Amanda Countryman, associate professor at Colorado State University, pointed to the high price and uncertain supply of fertilizer. “This is going to be a tremendous challenge for agriculture,” she said.
Panelists said the drought that afflicts the winter wheat crop and shipping on the Mississippi River should lift by springtime, assuming it acts like other La Nina weather patterns.
“We need this La Nina to croak out,” said Doud, and beneficial rains should return to the lower Mississippi Valley and the central and southern Plains by March. NOAA forecasters say winter will be drier and warmer than usual across the southern tier of states, from California to the Carolinas.
U.S. farm exports, which slumped during the Sino-U.S. trade war, surged with the return of China as a large and steady customer in the fall of 2020. China was forecast to buy $36 billion of U.S. food and ag this fiscal year, a record amount that would match its expected purchases in the previous year. Exports to Canada and Mexico also were up, said Meyer.
“So one way to read this is that China did not crowd out Canada and Mexico,” said Meyer.
Doud, who was U.S. chief agricultural negotiator under President Trump, said “we’re going to have to bear down” against Mexico’s plan to ban imports of genetically engineered corn beginning in 2024. Mexico is one of the largest markets for U.S. corn, most of which is grown from GE seeds.
A video recording of the forum is available here.