U.S. farm exports, a major source of income for producers, are headed for their lowest sales tally in six years, says a quarterly USDA forecast. The new estimate of $124.5 billion in exports during fiscal 2016 is down modestly from the previous forecast, primarily because the market for nuts — walnuts, pistachios and almonds — is slowing.
Like other horticultural products, tree nuts usually attract little attention although they are a noteworthy part of U.S. exports. Nut exports are forecast at $8 billion this year, larger than wheat, corn or beef exports. Turmoil in the nut market outweighed developments in all other commodities since USDA’s previous export estimate in February.
“Whole and processed tree nuts are cut $1 billion to $8 billion as pistachio and walnut unit values drop sharply and almond shipments to top markets (EU and China) slow more than anticipated,” said the Outlook for U.S. Agricultural Trade report.
Compared to the $1 billion cut in nut exports, USDA lowered its forecast of cotton exports by $100 million and livestock, dairy and poultry product exports by $300 million due to glutted markets. Higher prices were forecast to boost corn exports by $400 million and sales of soybeans, soyoil and soymeal by a combined $700 million from the February forecast.
Large supplies and the strong dollar have pulled down prices for almonds and walnuts. Close to 70 percent of U.S. almonds are exported. Slow demand has kept the almond inventory larger than usual, said USDA in a March report. The California walnut crop was estimated at a record 575,000 tons in 2015/16, 1 percent larger than the record set the previous year.
Overall, farm exports would be 18 percent lower than the record $152.3 billion in fiscal 2014, when commodity prices were high due to the 2012 drought. The world has reaped large harvests since then, driving down prices and demand.
Horticultural products, including nuts, fruits and vegetables, have been a steadily growing part of the agricultural export portfolio and would account for $33.5 billion, or 27 percent, of exports in the fiscal year that ends on Sept. 30. “The total would be the first year-over-year decline since fiscal 2009,” said USDA. In fiscal 2015, the sector had $34.1 billion in sales.
About 20 percent of U.S. agricultural production is exported annually. The United States is the world’s largest farm exporter.