U.S. farm exports are forecast by the USDA to hit a record $157 billion this year, aided by a weaker dollar against many foreign currencies. Agricultural lender CoBank says the impact will be somewhat uneven, with meat and dairy products benefiting the most. It based its projections on a comparison of U.S. market share for major commodities and exchange rates against nations that compete with America for sales of those products.
“We expect U.S. animal protein exports to benefit from a modestly weaker dollar tailwind in 2021,” said Dollar Divergence, a CoBank report. The outlook for a stronger euro and Australian dollar “should make U.S. beef and pork exports the largest beneficiaries of a weaker dollar in the coming year.” Similarly, dairy exports should benefit from the dollar’s depreciation against the euro and the New Zealand dollar, said CoBank. Almonds, walnuts, and other nut exports would also be aided by the weaker dollar.
U.S. corn and soybean exports would have less support in competing against Brazil, Argentina, and Ukraine, which also have weaker currencies. It may not matter as much, the report said, because “China has been aggressively buying U.S. grain for feed as it rebuilds its hog herd, leveraging its strong currency relative to the U.S. dollar.”
Cotton exports may feel pressure due to the weaker real in Brazil, the biggest U.S. competitor, “which will be a headwind for the United States into markets like China, Vietnam, and Pakistan.”