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Michigan Ag News Headlines |
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Corn Exports Take a Dive in Latest USDA Trade Projections
Michigan Ag Connection - 06/05/2023
U.S. agricultural exports in fiscal year (FY) 2023 are forecast at $181 billion, down $3.5 billion from the February forecast, according to the latest USDA revisions which cited reduced shipments for corn, wheat, beef, and poultry exports.
Corn export values took the biggest hit with a 12.7% cut from the previous forecast. USDA projected an additional $2.1 billion reduction from the previous forecast to $14.5 billion on both lower unit values and volumes.
Brazil is expected to have record yields for the upcoming “safrinha” (second) crop harvest starting in June 2023 resulting in competitive pricing.
Ethanol exports remain unchanged from the February forecast at $3.6 billion, running 11% below last year’s record value but still the second highest on record. Historically high export unit value is supported by persistently elevated corn and gasoline prices.
Canada remains the current bright spot for U.S. ethanol exports due to higher fuel blending in Ontario. Sales volume to Canada for the first six months of the fiscal year were up 35% pushing its share of U.S. ethanol exports to 40%.
Soybean exports are projected up $300 million to $32.3 billion on a slightly improved trade volume outlook. Soybean meal export volumes also increased, with export value up $100 million to $6.3 billion.
Soybean oil exports are reduced $200 million from the previous forecast as export volumes are forecast at the lowest levels in decades. This reflects a large premium for U.S. soybean oil compared with competitors due to strong biomass-based diesel demand in the United States.
USDA lowered wheat exports by another $900 million based on lower volumes and unit values and are now forecast at $7.4 billion. U.S. wheat export volumes are forecast down significantly due to smaller-than-expected winter wheat production for 2023-24 on higher acreage abandonment and reduced yields amidst drought conditions.
U.S. wheat exports also face increased competition in Western Hemisphere markets from regional competitors Canada and Argentina. Unit values are forecast lower on global price pressure based on generally favorable conditions to date for Northern Hemisphere wheat crops outside the United States including Canada, the European Union (EU), and Russia.
Total livestock, poultry, and dairy exports are lowered $1.2 billion to $39.3 billion as lower beef and poultry estimates outweigh gains in dairy. Beef exports are down $700 million to $9.3 billion as weaker unit values for beef muscle cuts more than offset firm shipments to Mexico and East Asia.
Poultry and products are lowered $300 million to $6.7 billion largely on a weaker outlook for chicken paw shipments to China. Pork exports are unchanged.
Source: michiganfarmnews.com
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