U.S. farm exports will slump this year to $125 billion, the lowest level since 2010, due to strong competition from other exporting nations and reduced demand for imports, said the Agriculture Department in a quarterly update. China would account for one-third of the decline and will lose its place as the top customer for U.S. farm exports. Canada would be the No. 1 customer for the first time since 2010.
“In general, strong competition and reduced demand have contributed to falling U.S. export sales. However, much of the reduction in value this year compared to FY2015 is due to lower prices for grain and feed exports,” said USDA chief economist Robert Johansson at the annual Ag Outlook Forum. Exports to China are forecast to fall by 22 percent, to $17.5 billion, a tie for second place with Mexico. Last year, China bought $22.6 billion of U.S. goods.
China, the destination for two-thirds of the soybeans on the world market, is forecast to remain the dominant importer despite a slower rate of economic growth in the world’s most populous nation. But China holds half of the world’s stockpile of corn, so USDA projects China “to slow imports of corn and corn substitutes to prevent its stockpile from going even larger and to reduce those stocks,” said Johansson
The slow-down in feed grain shipments to China means the end of the U.S. boom in sorghum. “In 2014, China imported a combined total of 20 million tonnes of sorghum and barley, projected to fall to 14.5 million (tonnes) in 2015 and then to 9.6 million (tonnes) in 2016,” said Johansson. USDA projects sorghum plantings will drop by 14 percent from the 8.5 million acres of 2015.