US agricultural exports forecast to fall to lowest levels since 2012
Livestock, dairy and poultry exports are forecast to reduce by $500m to $31bn as lower dairy and poultry product exports are not offset by gains in other livestock products.
Meanwhile, US exports of poultry are predicted to fall in 2015, by $100m to $6bn as greater trade restrictions, prompted by the outbreak of a virulent strain of avian flu in US birds, takes effect, while beef and pork exports are expected to remain unchanged at $6.5bn and $4.8bn respectively.
However, exports of beef and pork variety meats are up $200m as demand remains strong, according to the United States Department of Agriculture (USDA) quarterly Outlook report.
The current strength of the US dollar, which is expected to appreciate almost 25% against the euro, about twice the level of appreciation that had originally been anticipated, is a leading factor for the drop in exports.
"Movements in exchange rates are a leading factor explaining movements in US exports, since they are a key determinant of the real price of US agricultural products in global markets," said the USDA’s report. "The dollar’s strength is expected to be a significant damper on US export growth in 2015."
While the dollar’s value is currently high, relative to recent history it still remains below the peaks seen in the early part of this century. Low energy prices and steady world growth will partly offset the impact of a strong dollar on US agriculture.
Exports to China are forecast to drop by $1.1bn to $22.5bn, the lowest level since 2011, while exports to South Korea are expected to increase by $200m to $6.2bn thanks to strong sales of US beef and pork.
Meanwhile, total imports to the US have increased by 7% during the first half of this year compared to 2014, totalling $57bn, as the domestic economy continues to grow and the dollar’s higher purchasing power boosts consumer spending. The strong dollar makes the US a highly attractive market compared to other competing buyers.
As US beef production has remained lower over the past year, due to domestic herd rebuilding, beef imports have subsequently increased, with the 2015 forecast for beef and veal imports anticipated to be $6.6bn, or $1.9bn more than in 2014. Meanwhile, beef imports have increased from most countries, growth has been strongest in Australia, which has been liquidating its cattle herd due to ongoing problems with drought.
As a result, Australian imports to the US have surged, while imports from New Zealand, Brazil, Mexico, Canada, Nicaragua and Uruguay have also increased. Cattle imports are anticipated to be $500m ahead of 2014,
Swine imports are projected to be about the same as in 2014 at $400m.
