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U.S. agricultural trade balance is projected to fall to $5.2 billion in fiscal year 2019

Wednesday, November 20, 2019

U.S. agricultural exports are projected to total $134.5 billion in fiscal year (FY) 2019 (October 2018–September 2019), while agricultural imports are expected to total $129.3 billion, according to ERS’s recent Outlook for U.S. Agricultural trade. The $5.2 billion surplus projected for FY 2019 is the lowest since FY 2006, when the U.S. exported $4.6 billion more in agricultural goods than it imported. Unlike overall U.S. trade in goods and services, U.S. trade in the agricultural sector consistently runs at a surplus. Although agricultural exports have increased in value since 2016, the value of imports has risen at a slightly faster rate, leading to a declining trade balance. Compared to the previous Outlook for Agricultural Trade forecasts in May 2019, exports were revised downward by $2.5 billion while imports were raised by $0.3 billion. The decline in expected export value was primarily due to lowered expectations for corn and soybean exports. For imports, the increase in the forecast was due in part to an increase in the expected value of horticultural imports, such as fruits and vegetables. Initial projections for the FY 2020 suggest a small recovery in the agricultural trade balance to $8.0 billion, with exports valued at $137.0 billion and imports valued at $129.0 billion. This chart is drawn from data discussed in the ERS quarterly Outlook for U.S. Agricultural Trade, released in August 2019.

China’s demand for imported pork from the U.S. and other nations continues to accelerate as African Swine Fever spreads

Wednesday, November 6, 2019

Forecasts for U.S. pork exports for 2019 and 2020 were recently raised, due in large part to expectations of continued significant growth in Chinese demand for U.S. pork. China’s demand for imported pork has accelerated as African Swine Fever (ASF) spread throughout China during 2018-19. While ASF does not affect human beings, it kills most infected swine and presently has no vaccine nor a cure. In September 2019, China’s inventory of swine was down 41 percent from a year earlier, as many farmers slaughtered swine to prevent herds from becoming infected. By mid-October, China’s hog and pork prices had roughly doubled from previous-year levels as pork supplies tightened. To partially fill its supply shortfall, China increased pork imports from the United States and about 10 other countries. Despite 2018 retaliatory tariffs and taxes imposed by the Government of China of up to 78 percent on most U.S. pork products, 2019 U.S. exports of pork to China have increased 91 percent, through August. Total U.S. pork exports in 2019 are forecast at 6.85 billion pounds, 12 percent higher than a year earlier. In 2020, total U.S. pork exports of 7.3 billion pounds are anticipated to be 11 percent above 2019. These charts were compiled from data in various 2019 issues of the USDA, Economic Research Service’s monthly “Livestock, Dairy, and Poultry Outlook.”

ICYMI... The United States imports the majority of its coffee, by value, from Colombia and Brazil

Thursday, September 26, 2019

As International Coffee Day approaches, Americans continue to demonstrate high demand for this caffeinated staple. However, the United States produces a minimal amount of coffee. The limited domestic production comes from Kona coffee grown in Hawaii and represents less than 1 percent of U.S. consumption. The rest is imported from coffee-growing regions around the world, including South and Central America and Southeast Asia. By a large margin, Colombia and Brazil are the largest sources of imports. In 2017, imports of unroasted coffee from Colombia were valued at over $1.2 billion, with just under $1.1 billion worth of coffee imported from Brazil. Other key markets are Vietnam and Indonesia in Southeast Asia, and Guatemala and Honduras in Central America. By value, these six countries represent 72 percent of all U.S. coffee imports. In all, 50 countries exported coffee valued at $1 million or more to the United States in 2017, with an additional 54 exporting lower valued amounts. This chart is drawn from the ERS U.S. Food Imports data product, updated in May 2018. This Chart of Note was originally published September 26, 2018.

ICYMI... Historic Midwest flooding in Spring 2019 severely impacted rural counties in Iowa and Nebraska

Tuesday, September 17, 2019

In March 2019, historic flooding led to a major disaster declaration covering 121 counties in Iowa and Nebraska. The disaster declaration covers nearly half of the population in Iowa and 93 percent of the population in Nebraska. Of the 3.3 million people living in one of the designated disaster counties in 2017, over 37 percent (1.2 million) lived in rural areas. In 2017, Iowa and Nebraska were the second- and fourth-ranked States, respectively, in agricultural cash receipts. Iowa also ranked second in total agricultural exports and was the top exporter of soybeans, pork, corn, and feed grains. Nebraska led the Nation in beef and veal exports, and ranked third among States in corn, processed grain products, and feed grain exports. Based on the 2017 Census of Agriculture, designated disaster counties produced 66 percent of the market value of agricultural products sold in Iowa and 75 percent of those sold in Nebraska. Together, the designated disaster counties accounted for 9.2 percent of the total U.S. market value of agricultural products sold in 2017. This chart uses data from the ERS State Facts Sheet data product, updated March 2019. This Chart of Note was originally published April 25, 2019.

ICYMI... 2018 Farm Act mandates spending of $428 billion over 5 years

Thursday, August 8, 2019

The Agriculture Improvement Act of 2018 (2018 Farm Act) was signed into law December 20, 2018, and will remain in force through the end of fiscal year 2023, although some provisions extend beyond 2023. The Congressional Budget Office (CBO) projected that the new Farm Act would mandate spending of $428 billion dollars over the next 5 fiscal years (2019-2023). A large majority of projected spending—76 percent ($326.02 billion)—would fund nutrition programs, with most going to the Supplemental Nutrition Assistance Program (SNAP). Crop insurance ($38.01 billion), farm commodity programs ($31.44 billion), and conservation programs ($29.27 billion) accounted for nearly all of the remaining outlays. Approximately 0.8 percent ($3.54 billion) would fund all other programs, including trade, credit, rural development, research and extension, forestry, energy, horticulture, and miscellaneous programs. Overall, the 2018 Farm Act made fewer changes to food and farm policy than the 2014 Farm Act. Nutrition policy, particularly SNAP, continued with minor changes. Crop insurance options and agricultural commodity programs continued largely as under the 2014 Farm Act. All major conservation programs continued, although some were modified significantly. This chart appears on the USDA Website page, “The Agriculture Improvement Act of 2018: Highlights and Implications,” dated December 20, 2018. This Chart of Note was originally published January 28, 2019.

U.S. agricultural trade balance is projected to fall to $8.0 billion in fiscal 2019

Wednesday, June 19, 2019

U.S. agricultural exports are projected to total $137.0 billion in fiscal year (FY) 2019 (October 2018–September 2019), while agricultural imports are expected to total $129.0 billion, according to ERS’s latest Outlook for U.S. Agricultural trade. The $8.0 billion surplus projected for FY 2019 is the lowest since FY 2006, when the U.S. exported $4.6 billion more in agricultural goods than it imported. Unlike overall U.S. trade in goods and services, U.S. trade in the agricultural sector consistently runs at a surplus. Although agricultural exports have increased in value since 2016, the value of imports has risen at a slightly faster rate, leading to a declining trade balance. Relative to the previous Outlook for Agricultural Trade forecasts in February 2019, exports were revised downward by $4.5 billion while imports were raised by $1.0 billion. The decline in expected export value was primarily due to lowered expectations for corn and soybean exports. For imports, the increase in the forecast was due in part to an increase in the expected value of horticultural imports like fruits and vegetables. This chart is drawn from data discussed in the ERS quarterly Outlook for U.S. Agricultural Trade, released in May 2019.

U.S. agricultural exports supported an estimated 1.2 million full-time jobs in 2017

Monday, June 17, 2019

U.S. agricultural exports support output, employment, income, and purchasing power in the overall domestic economy. ERS economists estimate that every $1 billion of U.S. agricultural exports in 2017—the most recent year in which data is available—supported approximately 8,400 American jobs throughout the economy. At $140.2 billion in 2017, agricultural exports supported about 1.2 million full-time jobs. These included 795,000 jobs in the nonfarm sector. Farmers’ purchases (fuel, fertilizer, or other expenses) to produce export commodities also spur economic activity in the manufacturing, trade, and transportation sectors. Data processing, financial, legal, managerial, administrative, and many other types of services are also needed to facilitate the movement of export commodities. Consequently, U.S. agricultural exports support economic activity in both the farm and nonfarm sectors of the domestic economy. In terms of employment growth, sectors outside of farming were the major beneficiaries of U.S. agricultural exports during 2004–17. Starting in 2004, the estimated numbers for farm and nonfarm jobs supported by agricultural exports diverged, with the latter accounting for a rising share of the total employment supported by agricultural exports. This chart appears in the June 2019 ERS Amber Waves article, “U.S. Agricultural Exports Supported 1.2 Million Full-Time Jobs in 2017.”

Historic Midwest flooding severely impacts rural counties in Iowa and Nebraska

Thursday, April 25, 2019

In March 2019, historic flooding led to a major disaster declaration covering 121 counties in Iowa and Nebraska. The disaster declaration covers nearly half of the population in Iowa and 93 percent of the population in Nebraska. Of the 3.3 million people living in one of the designated disaster counties in 2017, over 37 percent (1.2 million) lived in rural areas. In 2017, Iowa and Nebraska were the second- and fourth-ranked States, respectively, in agricultural cash receipts. Iowa also ranked second in total agricultural exports and was the top exporter of soybeans, pork, corn, and feed grains. Nebraska led the Nation in beef and veal exports, and ranked third among States in corn, processed grain products, and feed grain exports. Based on the 2017 Census of Agriculture, designated disaster counties produced 66 percent of the market value of agricultural products sold in Iowa and 75 percent of those sold in Nebraska. Together, the designated disaster counties accounted for 9.2 percent of the total U.S. market value of agricultural products sold in 2017. This chart uses data from the ERS State Facts Sheet data product, updated March 2019.

2018 Farm Act mandates spending of $428 billion over 5 years

Monday, January 28, 2019

The Agriculture Improvement Act of 2018 (2018 Farm Act) was signed into law December 20, 2018, and will remain in force through the end of fiscal year 2023, although some provisions extend beyond 2023. The Congressional Budget Office (CBO) projects that the new Farm Act will mandate spending of $428 billion dollars over the next 5 fiscal years (2019-2023). A large majority of projected spending—76 percent ($326.02 billion)—will fund nutrition programs, with most going to the Supplemental Nutrition Assistance Program (SNAP). Crop insurance ($38.01 billion), farm commodity programs ($31.44 billion), and conservation programs ($29.27 billion) account for nearly all of the remaining outlays. Approximately 0.8 percent ($3.54 billion) will fund all other programs, including trade, credit, rural development, research and extension, forestry, energy, horticulture, and miscellaneous programs. Overall, the new Farm Act makes fewer changes to food and farm policy than the 2014 Farm Act. Nutrition policy, particularly SNAP, will continue with minor changes. Crop insurance options and agricultural commodity programs will continue largely as under the 2014 Farm Act. All major conservation programs will continue, although some were modified significantly. This chart appears in “The Agriculture Improvement Act of 2018: Highlights and Implications,” December 20, 2018.

China holds nearly 70 percent of global rice stocks in storage

Wednesday, December 19, 2018

Rice stocks in China continue to climb, with 2018/19 marketing year ending stocks (unused rice kept in storage) projected at a record 113 million tons, or about 70 percent of the world’s stocks. By comparison, the United States is projected to hold 1.5 million tons of rice stocks. This is the 12th consecutive year of increasing stocks in China, the world’s largest rice producer and consumer. Rising commodity stocks typically indicate overproduction or reduced demand. Growing stocks can also reflect a variety of government policies. Governments may hold stocks as assurance against emergencies (such as food shortages and crop failures) or tight global supplies that could lead to global price spikes, or they may purchase large quantities of a commodity and hold it in storage to increase prices received by farmers. In general, government purchases insulate rice prices and provide price and demand stability. In line with China’s increased focus on agriculture and self-sufficiency, the Government raised rice support prices annually from 2008 to 2015, which resulted in overproduction. A version of this chart appears in the December 2018 ERS report, Rice in Asia’s Feed Markets.

Developing countries, such as China and Brazil, lead global productivity growth

Wednesday, December 12, 2018

Raising the productivity of existing agricultural resources—rather than bringing new resources into production—has become the major source of growth in world agriculture. The total productivity of agricultural inputs, or TFP (total factor productivity), has been rising steadily in most industrialized countries at between 1 and 2 percent a year since at least the 1970s. Among developing countries and transition economies of the former Soviet bloc, agricultural TFP growth rates have been much more uneven. Some developing countries have had agricultural TFP growth rates of over 2 percent per year since the 1970s, while other countries (especially in Sub-Saharan Africa) have seen little productivity growth at all. For the developing countries that were able to accelerate agricultural TFP growth rates, key factors have been market reforms and greater capacity of national agricultural research and extension systems. Long-term investments in agricultural research were especially important to sustaining higher productivity growth rates in large, rapidly developing countries such as Brazil and India. Chinese agriculture benefited enormously from institutional and market reforms as well as from technological changes made possible by investments in research. Following the economic transition from a planned to a market economy in the early 1990s, Russian agriculture rebounded because of substantial productivity growth in the southern region of the country. Under-investment in agricultural research remains an important barrier to stimulating agricultural productivity growth in Sub-Saharan Africa. This chart appears in the ERS data product for International Agricultural Productivity, updated October 2018.

The U.S. agricultural trade balance is projected to decline in fiscal year 2019 to its lowest level since 2007

Friday, December 7, 2018

U.S. agricultural exports are projected to total $141.5 billion in fiscal year (FY) 2019, while agricultural imports are expected to total $127 billion, according to ERS’s latest outlook for U.S. agricultural trade. The $14.5 billion surplus projected for FY 2019 is the lowest since FY 2007, when the United States exported $12.2 billion more in agricultural goods and services than it imported. Unlike overall U.S. trade in goods and services, U.S. trade in the agricultural sector consistently runs at a surplus. While agricultural exports have increased in value since 2016, the value of imports has risen at a slightly faster rate, leading to a declining trade balance. This is further compounded in FY 2019 by significant declines in projected exports to China. At the regional level, exports to East Asian countries are forecast to decline by $6.7 billion in FY 2019—the result of an expected decrease of $7.3 billion in agricultural exports to China from the $16.3 billion total for FY 2018. This chart appears in the December 2018 Amber Waves article, “Reduced Exports to China in Fiscal Year 2019 May Drive U.S. Agricultural Trade Balance to Lowest Level Since 2007.”

The composition of U.S. agricultural exports, by category, remained relatively stable in 2000-17

Monday, November 26, 2018

The United States exports a variety of agricultural products to destinations around the world. Although the total value of agricultural exports rises and falls depending on market and economic conditions, the shares of individual export categories within that total are generally more stable. The highest valued export product categories include horticultural products (like fruits and vegetables), oilseeds and oilseed products, livestock products, and grains and animal feeds. However, these top categories have trended differently in terms of value over time. In recent years, the value of grains and animal feeds has fallen by 5 percent, reducing its share of total agricultural exports from 23 percent to 21 percent since 2015. The other top commodity groups have risen in value since 2015, but their shares have remained stable due to overall growth in agricultural export value. Among the lower valued commodity groups, the cotton, tobacco, and seeds category has grown significantly since 2015, rising by 31 percent in value and increasing its share of total agricultural exports from 5 percent to 6 percent. This chart appears in the ERS report, "Ag and Food Statistics: Charting the Essentials, October 2018.”

The United States imports the majority of its coffee, by value, from Colombia and Brazil

Wednesday, September 26, 2018

As International Coffee Day approaches, Americans continue to demonstrate high demand for this caffeinated staple. However, the United States produces a minimal amount of coffee. The limited domestic production comes from Kona coffee grown in Hawaii and represents less than 1 percent of U.S. consumption. The rest is imported from coffee-growing regions around the world, including South and Central America and Southeast Asia. By a large margin, Colombia and Brazil are the largest sources of imports. In 2017, imports of unroasted coffee from Colombia were valued at over $1.2 billion, with just under $1.1 billion worth of coffee imported from Brazil. Other key markets are Vietnam and Indonesia in Southeast Asia, and Guatemala and Honduras in Central America. By value, these six countries represent 72 percent of all U.S. coffee imports. In all, 50 countries exported coffee valued at $1 million or more to the United States in 2017, with an additional 54 exporting lower valued amounts. This chart is drawn from the ERS U.S. Food Imports data product, updated in May 2018.

U.S. agricultural export and import forecasts both revised upward for fiscal year 2018; trade balance stable

Wednesday, June 13, 2018

U.S. agricultural exports are forecast to reach $142.5 billion in fiscal year 2018, primarily due to expected increases in corn and cotton exports. At the same time, U.S. agricultural imports are expected to reach $121.5 billion, driven by rising imports of animal and horticultural products. In both cases, these May forecasts represent an increase of $3 billion over the previous respective forecasts in February. The resulting U.S. agricultural trade surplus for 2018 is expected to be $21 billion. While the United States has consistently run an agricultural trade surplus, the size of the surplus has declined since 2014. This reflects steadily rising imports amid more variable export patterns. As prices for corn and soybeans, major export commodities, rose sharply in the early 2010s and later fell after 2014, the value of U.S. exports rose and fell as well. Additionally, the U.S. dollar experienced a sustained period of appreciation between late 2014 and early 2017. A stronger dollar can make imports more attractive to U.S. consumers while increasing the relative price of U.S. goods sold to foreign markets. This chart is drawn from data discussed in ERS’s Outlook for U.S. Agricultural Trade Newsletter, released May 31, 2018.

A hypothetical increase in U.S. agricultural exports is estimated to add rural jobs across different agri-food sectors

Friday, May 18, 2018

ERS estimates that U.S. agricultural exports, totaling about $135 billion in 2016, supported about 1.1 million full-time, civilian jobs. Using a model of the U.S. economy with a base year of 2013, ERS researchers found that a hypothetical 10-percent increase in foreign demand for U.S. agricultural exports would add about 41,500 jobs, or about a 0.03-percent increase in total U.S. employment. About 42 percent would be in rural areas—where employment in agriculture and food manufacturing would increase by about 18,200 jobs, while employment in other sectors would decrease by nearly 700 jobs as some labor shifts into agriculture. The net effect on employment was positive for 17 of the 20 agri-food sectors in the analysis, with the largest increases in field crops, livestock, and poultry and egg. This reflects the large initial shares of exports and employment in these sectors, relative to other agri-food sectors. Field crops alone accounted for nearly 57 percent of the increase in agri-food rural employment. This chart is based on data that appears in the April 2017 ERS report The Potential Effects of Increased Demand for U.S. Agricultural Exports on Metro and Nonmetro Employment.

China’s direct overseas agricultural investment has grown over tenfold in less than a decade

Wednesday, April 25, 2018

China's need for agricultural resources and technology and the country's sustained economic growth are driving rapid growth in Chinese investment in agriculture and food sectors abroad. According to Chinese investment statistics, overseas ventures in agriculture, forestry, and fisheries soared from $300 million in 2009 to $3.3 billion in 2016. But these totals understate the magnitude of Chinese agricultural-focused foreign assets because the statistics exclude the acquisition of food processing and trading companies classified in manufacturing and service sectors. An initial wave of investments during 2004-12 was focused mainly on crop production, fishing ventures, and acquiring raw materials for the Chinese market. More recently, some Chinese companies and officials have shifted the thrust of their strategy from farming overseas to acquiring established agribusiness companies based in Europe, North America, and Oceania such as ChemChina's acquisition of Syngenta and Shuanghui International's purchase of U.S.-based Smithfield Foods. This chart appears in the April 2018 Amber Waves feature, "China's Agricultural Investment Abroad Is Rising."

Animal disease trade measures accounted for nearly one-third of concerns brought to World Trade Organization committee

Friday, March 2, 2018

Sanitary and phytosanitary (SPS) regulations play an important role in ensuring food safety and protecting animal and plant resources. But such regulations are sometimes imposed improperly with countries favoring domestic producers and discriminating against imports from others. If a member country of the World Trade Organization (WTO) believes that a trade policy of another WTO member violates relevant agreements, it can initiate a dispute settlement case with the WTO’s Dispute Settlement Body. In the case of sanitary and phytosanitary (SPS) measures, a member country can inform the WTO’s SPS Committee of its concerns about a particular measure. Many of these concerns—officially called Specific Trade Concerns (STCs)—are resolved before they escalate to the level of a formal dispute. From 1995 to 2015, the most common STCs brought before the WTO SPS Committee were related to trade measures imposed because of animal disease issues. This large share reflects strong growth in meat trade along with occasional animal disease outbreaks such as foot-and-mouth disease and bovine spongiform encephalopathy that gave many countries a rationale to restrict imports. Following animal disease-related concerns, the next most common concern was pesticide tolerances and maximum residue limits. This chart appears in the February 2018 Amber Waves feature, "World Agricultural Trade Experiences Sizable Growth but Still Faces Barriers."

The regional composition of U.S. imports has remained stable over time

Tuesday, January 30, 2018

The share of U.S. agricultural imports from regions consisting primarily of developed economies remained stable from 1995 to 2015, at just over 60 percent. This contrasts with the destinations for U.S. agricultural exports, which shifted further toward developing regions. There was a compositional shift in import shares, however, from one developed region to another. In particular, a decline in the share of U.S. agricultural imports supplied by Europe was offset almost exactly by an increase in the share supplied by Canada and Mexico. Canada (a high-income economy) and Mexico (an upper-middle-income economy) are partners of the United States in the North American Free Trade Agreement (NAFTA), whose trade-liberalizing provisions were gradually applied to intraregional agricultural trade during the 1994-2007 period. With respect to other parts of the world, the import shares from fast-growing exporters in South America and the former Soviet Union declined, even as those regions increased their participation in the global agricultural market. There were modest increases in import shares from developing East Asia and South Asia, which is consistent with their growing roles in global trade. This chart appears in the ERS report The Global Landscape of Agricultural Trade, 1995-2014, released in November 2017.

Oilseeds have grown significantly in share of total global agricultural trade while fibers have declined

Wednesday, December 6, 2017

Among the product categories that make up the largest share of global trade value, movement in average import shares has varied with some products growing in significance and others declining. Over the four 5-year periods measured between 1995 and 2014, oilseed imports (bulk commodities) and their products (intermediate commodities) had the fastest growth in share of total value. In contrast, the share of trade in two bulk product categories—grains and tropical commodities (coffee, sugar, and cocoa)—declined over 1995-2014. For consumer-oriented products, the share of animal products, fruits and nuts, and vegetables in global agricultural trade declined slightly, while the share of processed food increased. Fibers, particularly cotton and others used for clothing, witnessed the steepest loss in share of total agricultural import value. Cotton consumption peaked in 2007 before falling off. China, the largest consumer of cotton fiber, reduced its imports beginning in 2012 to rely more on domestic production and carried over stocks from previous years. The growth in oilseed trade and their products has been one of the most significant developments in the global trade landscape, driven by growing imports from China and India and export growth from Southeast Asia and the Americas. This chart appears in the ERS report, The Global Landscape of Agricultural Trade, 1995-2014, released in November 2017.

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