U.S. agricultural exports are expected to reach a record $77 billion for the 2007 fiscal year, according to a November report from USDA's Economic Research Service and Foreign Agricultural Service.
The export figure is up $5 billion from the August forecast and $8.3 billion from 2006.
Forecast corn exports were raised $2.1 billion from August to a near-record $8.9 billion on higher prices due to continued strong demand and tightening domestic supply. Domestic use for ethanol and overseas demand for feed use remains strong.
Projected wheat exports were raised $340 million on tighter world supply and reduced competition from Australia.
Soybean exports were raised $900 million, reflecting higher prices, record crushing, slowed production growth in South America, a record U.S. crop, and strong demand from China.
According to the report, China will replace the EU-25 as the fourth largest market for U.S. agricultural exports largely due to sales prospects for soybeans.
In 2007, China's economy is expected to grow 10 percent, following 11 percent in 2006. Chinese exports and investment grew 27 percent in the first three quarters of 2006. China's imports in the first nine months of 2006 grew 22 percent, supporting commodity prices.
As China has instituted a more flexible exchange rate regime, the dollar is expected to depreciate modestly against the yuan in 2007.
As the dollar appreciates against the Japanese yen, and weakens against developing nations' currencies and the Euro in 2007, the farm trade-weighted dollar should fall modestly in 2007, continuing to support U.S. farm and manufacturing exports, the report said.
U.S. exports to Canada are estimated at $13.2 billion; Mexico, $11.9 billion; Japan, $9.1 billion; China, $8.5 billion; and the EU-25, $7.2 billion. Exports to the Middle East are up slightly from fiscal 2006 to $3.3 billion on higher grain prices.
The six major economies in Latin America — Argentina, Brazil, Mexico, Venezuela, Colombia, and Chile are also growing rapidly. The region is projected to grow over 4 percent in 2007, below the 5 percent of 2006. Growth in Brazil is estimated at 3.5 percent in 2006, rising to 4.1 percent in 2007.
U.S. agricultural imports expanded 11 percent, to $64 billion, in fiscal year 2006, the fourth year of double-digit growth. Import value has grown 12 percent on average from 2003 to 2006, roughly twice the historical rate.
Agricultural imports for 2007 were forecast at a record $69 billion, up $500 million from the August forecast. Though a record high, the rate of import growth is the slowest since 2003, the result of a weaker dollar, stable livestock trade and a slower rate of growth for sugar and tropical products.
Imported vegetable oils also gained in forecast value, due to a mass switch by U.S. food manufacturers to unsaturated oils with no transfats, thereby raising projected demand for rapeseed and olive oil.
In it Nov. 27 crop progress report, USDA reported that corn harvest in the United States is nearly complete with Michigan and Ohio lagging behind their five-year averages, at 78 percent and 88 percent harvested, respectively.
Eighty-three percent of the U.S. cotton crop had been harvested, on pace with last year's crop. Harvested was complete in Louisiana and Mississippi, compared to Texas, 70 percent, Kansas, 55 percent, South Carolina, 75 percent, and Arizona, 72 percent. According to USDA, about 12 million bales of cotton had been ginned by Nov. 15.
According to USDA's World Agricultural Outlook Board, world cotton production in 2006-07 is forecast at 115.7 million bales, 1 percent above last season's 114.1 million bales. China and India, accounting for more than 40 percent of world production this season, are projected to increase their crops by nearly 4 million and 2 million bales, respectively.
Meanwhile, the United States, Pakistan, and Australia are expected to produce smaller crops than in 2005-06.
Total foreign cotton production in 2006-07 is estimated at 94.4 million bales, 4 million above last season but approximately 3 million below the record in 2004-05.
Global cotton consumption is forecast at a record 121 million bales, 4 percent above last season. Foreign cotton consumption is expected to reach 115.7 million bales, while U.S. mill use continues to decline. Foreign mill use is expected to increase for the eighth consecutive season.
The largest consumption gains are anticipated in the major producing countries of China (5 million bales higher) and India (1 million bales higher). China is expected to account for nearly all of the 2006-07 global consumption increase.
World cotton trade is expected to approach 41.6 million bales this season, compared with 45.4 million in 2005- 06. The United States and most other major exporting countries are expected to export less this season as foreign stocks are drawn down.