Not surprisingly, USDA’s Economic Research Service (ERS) cut its ag export forecast for fiscal year 2019 by $2.5 billion from May to $134.5 billion, “mainly due to reductions in exports of corn, soybeans, and other oilseeds.” On the other hand, it raised its import forecast by $300 million to $129.3 billion. That implies a narrower ag trade balance of $5.2 billion, versus the $8.0 billion surplus it expected in May.
As of June, the U.S. was running ag trade surplus of $3.710 billion. That means that on average, the U.S. needs to post a trade balance of nearly $500 million the remaining three months of the fiscal year.
Looking out to FY 2020, ERS expects exports of U.S. ag products to climb $2.5 billion to $137.0 billion. “This anticipated increase is primarily driven by higher exports of pork, beef, soybeans and horticultural products,” the department explains. ERS details that it expects pork exports to total $6.3 billion, an $800 million increase from FY 2019, thanks to “higher volumes and unit values, partially resulting from the repeal of Mexico’s retaliatory tariffs and an increase in global pork demand due to the African Swine Fever (ASF). Soybean exports are expected to climb $400 million to $16.8 billion on higher volumes, with cotton exports expected to climb $100 million from FY 2019 to $5.8 billion. Grain and feed exports are expected to hold steady in the coming fiscal year.
ERS expects the U.S. to import $129.0 billion worth of ag goods in FY 2020, a $300 million reduction from its outlook for FY 2019 “primarily due to decreases in horticultural product imports.”
Slightly higher exports and slightly lower imports result in a larger trade balance outlook of $8.0 billion for FY 2020.