The US Department of Agriculture (USDA) says agri imports are set to reach $118.5 billion in 2016, an increase of more than $4 billion over last year.
Exports are predicted to fall to $125 billion, their lowest level since 2010. Projections for both imports and exports are below estimates released in November 2015. The decline is largely due to lower prices across the agriculture sector.
An Outlook Report released by the USDA’s Economic Research Service and Foreign Agricultural Service credits lower prices, strong competition and reduced demand in the global market for the decline in exports, as the US trade surplus in agricultural goods is expected to narrow to its lowest level since 2006.
Overall, US agricultural exports are projected to fall by more than 10 percent compared to 2015, grain and feed exports by 14 percent, and “oilseeds and products” by 20 percent. Livestock, poultry and dairy is expected to decline by 12 percent, and sugar and tropical products by 20 percent, while horticultural products, including fresh and processed fruits, vegetables and tree nuts, are expected to increase by 2 percent.
Agricultural imports to the US are projected to rise by 4 percent in 2016 to $118.5 billion. Grain and feed imports are forecast to grow by 2 percent to $11 billion, while horticultural imports are expected to grow by 8 percent to $53.9 billion. Imports of sugar and tropical products are forecast to grow by 14 percent to $26.9 billion. The increase is due largely to higher consumer incomes in the US.
Livestock and poultry imports are forecast to decline by $3.7 billion, or 20 percent of their 2015 number, due to record cold storage stocks resulting from high imports in 2015 and increases in US beef production.
The USDA predicts rising interest rates in the US and poor economic conditions elsewhere in the world will continue to drive dollar appreciation against key currencies in 2016, though not as strongly as in the previous year.
Competition from Brazil and Argentina in particular is expected to drive down exports of key US agricultural goods. A negative outlook for recession-plagued Brazil and the dismantling of protectionist policies in Argentina is expected to drive down currency values for two of the US’ most direct competitors in the agri export market.