After reaching a record peak in 2014, agricultural exports dropped slightly in 2015, and seem to be stuck in neutral for 2016. On the other hand, agricultural imports are expected to reach an all-time high.
The USDA forecasts exports to be slightly lower than 2015, reaching $138.5 billion in 2016. Agricultural imports will be up from $115.5 billion in 2015 (a record) to a new record of $122.5 billion in 2016.
The decline in agricultural exports is related to lower expected soybean and soybean meal prices and also reduced export volumes. Cotton exports will also experience a decline due to a smaller U.S. crop. But, grain and feed exports are forecasted to increase, largely due to higher expected wheat shipments. Moreover, exports of livestock, poultry, and dairy products are up, as higher export volumes for a number of livestock products more than offset a decline in price. Horticultural exports are expected to increase, with higher export values for fruits, vegetables and tree nuts.
The main commodities contributing to record agricultural imports are horticultural products, sugar, and tropical products. Nearly two-thirds of agricultural imports consists of the commodities above, about a 175 percent increase from 2000. This trend will likely continue as consumption away from home continues to increase.
The U.S. economy is expecting slow but steady growth. However a strong dollar and economic challenges abroad weigh on trade.
China is slowing considerably, with the lowest growth rates since 1990. Emerging countries are experiencing low growth as well, while European economies are mixed. China and other emerging countries such as Brazil and Argentina are devaluing their currencies, making it harder for U.S. exports to be competitive.
One key factor that can affect the expected steady growth in the U.S. Economy is low oil prices. As the largest oil producer, low oil prices will have mixed outcomes in the U.S. economy, especially with oil and gas-producing states experiencing sluggishness.
Trade Promotion Authority (fast track) was finally given to President Obama, and the administration continues to move forward with regional trade agreements. Negotiations are complete for the TransPacific Partnership (TPP), while negotiations continue on the TransAtlantic Trade and Investment Partnership (TTIP).
The TPP was approved by the administration, but is facing stiff opposition from both parties in Congress, while GMOs and animal hormones are issues on which TTIP members have not yet found common ground.
Officially Congress has 90 legislative days from early November to ratify TPP. However, GOP leadership may attempt to stall the vote until summer, or even post-November elections.