Agricultural exports in fiscal year 2016 are forecast at $131.5 billion, which is $8.2 billion below final fiscal 2015 exports of $139.7 billion. The forecast for fiscal year 2016 is down $7.0 billion from the August projection, primarily due to lower exports to the top markets (e.g., China, Japan, Canada, Mexico, and the EU).
The export forecast to China is slashed $2.3 billion to $18.2 billion. Nonetheless, China remains the second largest market for U.S. agricultural exports. Exports of sorghum and DDGS to China are projected to fall sharply due to expected higher domestic corn consumption as a result of recent Chinese support price changes for the Northeast region. Cotton exports are also forecast to decline as large Chinese stocks continue to depress prices and China’s import demand. For soybeans, reduced U.S. competitiveness versus Brazil, combined with lower unit values, will negatively impact the total value of shipments. Dairy and hides and skin sales are also expected lower. The new forecast total will be the lowest since 2010.
Japan is forecast down $800 million to $11.2 billion, due to lower demand for beef and sharply lower pork prices, which are the same reasons behind reductions in Hong Kong (down $300 million), Taiwan (down $200 million), and South Korea (down $200 million). In Southeast Asia, exports to Indonesia are reduced by $200 million as a result of lower soybeans, wheat, and dairy prospects. The Philippines is forecast down $300 million due to lower meat and dairy prices.
Exports to Canada are forecast down $500 million to $21.3 billion as a result of lower export values for beef and pork.
Mexico is forecast down $500 million to $18.0 billion. Mexico is the largest market for U.S. dairy and poultry as well as the second-largest market for U.S. beef and pork (after Japan), and export values for beef, pork, poultry, and dairy are all expected to be lower. In addition, U.S. wheat exports are also facing stronger competition from Black Sea supplies.
U.S. wheat is also losing competitiveness in South America, resulting in reduced export forecasts to Brazil (down $300 million), Peru (down $100 million), and Venezuela (down $300 million). In the case of Venezuela, diminished foreign reserves also play a role in lower U.S. exports.
Europe, Africa, and the Middle East
Exports to the EU are forecast down $500 million to $11.5 billion due to reductions to meat, soybeans, and wheat.
Exports to Nigeria are down $200 million due to continued loss of U.S. market share of wheat there. Egypt is forecast down $200 million mainly as a result of reduced grain and oilseed export prospects. Turkey is forecast down $100 million due to lower cotton unit values.