USDA cuts FY 2022 ag trade forecast, expects deficit in FY 2023
USDA raised its forecasts for ag exports and imports in fiscal year (FY) 2022, calling for a record for both. USDA increased its FY 2022 ag export outlook by $5 billion from May to $196.0 billion, which would be up $23.3 billion from last year. The ag import forecast was raised $11.5 billion to $192.0 billion, which would be up $28.7 billion from FY 2021. If realized, the 18% jump in import values in FY 2022 would be the largest year-over-year percentage increase since FY 2011. The historically large increase from FY 2021 to FY 2022 is a product of the unwavering upward trend of import volumes in the face of increasing unit values for nearly every agricultural import product group.
The new forecasts would leave an ag trade surplus of $4.0 billion, down $6.5 billion from the implied level in USDA’s May outlook and $5.4 billion below FY 2021.
USDA’s initial forecast for FY 2023 projects ag exports will decline $2.5 billion from this year to $193.5 billion and ag imports will rise another $5 billion to a record $197.0 billion. That would leave an ag trade deficit of $3.5 billion, the first deficit in two years. USDA said the lower export forecast was primarily driven by lower exports of cotton, beef, and sorghum that are partially offset by higher exports of soybeans and horticultural products. The higher ag import outlook for FY 2023 is due to an expected rise in imports of grains and feed products, horticultural products, and sugar and tropical products.
For FY 2023, cotton exports are forecast down $1.8 billion due to drought-slashed exportable volumes. Beef exports are forecast down $1.1 billion due to tight U.S. supplies. Overall livestock, poultry, and dairy exports are projected at $41.1 billion, down $1.5 billion. Sorghum exports are forecast at $2.0 billion, down $700 million, on sharply lower exportable supplies. Total grain and feed exports are forecast down $1.3 billion to $46.5 billion; in addition to sorghum, wheat exports are forecast down $300 million on lower unit values. Soybean exports are forecast up $2.2 billion to a record $35.2 billion on higher prices. Horticulture exports are raised $400 million to $39.5 billion as higher exports of fresh and processed fruits and vegetables more than offset a decline in tree nut exports. Ethanol exports are unchanged at $4.2 billion. Agricultural exports to China are forecast at $36.0 billion, unchanged from FY 2022, as higher soybean exports offset lower cotton and sorghum prospects. Agricultural exports to Canada and Mexico are forecast at $28.5 billion each, also unchanged from FY 2022.
