The government hiked its outlook for 2010 U.S. agricultural exports to $104.5 billion, the second-highest level ever, amid stronger than expected demand from China and other Asian countries.

Canada’s purchases of fresh fruits and vegetables have also surpassed expectations, signaling record export prospects for horticultural products, according to a U.S. Department of Agriculture trade update released May 27.

Among other farm products, the USDA raised its fiscal 2010 projection for U.S. dairy exports, lowered its estimate for pork and left beef exports unchanged.

U.S. agricultural exports were up 14 percent during the first six months of fiscal 2010, reflecting the USDA’s stepped-up efforts to sell farm products overseas, the agency said.

“The USDA has been working aggressively to improve opportunities for U.S. agricultural exports,” Agriculture Secretary Tom Vilsack said in a separate statement today.

“Efforts to increase trade are an important part of the administration's effort to strengthen our economy here at home,” Vilsack said.

Those efforts include opening new offices overseas and “more constructive, effective dialogue on trade issues with growing market economies,” Vilsack said.

This year’s projected U.S. ag exports of $104.5 billion, revised higher by 4.5 percent from a previous estimate in February, are second only to the $115.3 billion exported in 2008, the USDA said.

Exports for fiscal 2010, which ends Sept. 30, would be up 8.2 percent from $96.6 billion in 2009.

The USDA report illustrated the expanding role of China, and the rest of Asia, as a major customer for soybeans, livestock feed, almonds and other U.S. agricultural products. This year, Asia is expected to surpass the Western Hemisphere as the largest region market for U.S. exports, the USDA said.

While U.S. and Europe struggle to recover from recession, China went largely unscathed from economic turmoil of recent years. China’s economy is expected to grow 9 percent to 10 percent this year, compared with 1 percent growth for Eurozone countries, the USDA said.

“Emerging Asia will lead the world economic turnaround,” the USDA said in the report.

U.S. ag exports to China are expected to total $14 billion in 2010, up from $11.7 billion projected in February and up from $11.2 billion in 2009, USDA said. China would be the third-biggest single-country market for U.S. farm exports behind Canada and Mexico. Last year, China ranked fourth.

Among specific categories, the USDA raised its 2010 projection for U.S. horticultural exports by $1 billion, to a record $22.5 billion, citing higher shipments to Canada and “surging volumes” of almonds, pecans and walnuts to China and Hong Kong.

The estimated horticultural exports would be up 9.2 percent from $20.6 billion in 2009.

Dairy product exports were hiked to $2.9 billion from $2.8 billion previously “due to strong global dairy prices and expected recovery in milk powder sales,” the USDA said. In fiscal 2009, dairy exports totaled $2.26 billion.

For pork, estimated exports were reduced $100 million to $4.1 billion, with tighter U.S. supplies limiting U.S. shipments, the USDA said. Pork exports are still expected to be up 12 percent from $3.65 billion in 2009.

Beef and veal exports are estimated at $3 billion, unchanged from February and up from $2.59 billion in 2009.

For the full USDA Agricultural Trade report:
http://www.fas.usda.gov/cmp/outlook/2010/May-10/May2010_fullreport.pdf

Source: Bruce Blythe, Business Editor, Vance Publishing