The Department of Agriculture expects U.S. farm exports to hit a record $157 billion for fiscal 2021, an increase of $21 billion over the year before, as the global economy recovers and China increases its already strong demand for U.S. corn, soybeans and meat.
USDA also projected Thursday that U.S. farmers will plant a record 182 million acres of corn and soybeans this year, helped by strong domestic demand as well as surging exports. The forecast also assumes normal planting weather; farmers had trouble getting crops planted in both 2019 and 2020.
Exports to China are projected to hit a record $31.5 billion in FY21, and the Chinese are expected to exceed their tariff rate quota for corn of 283 million bushels, or 7.2 million metric tons, for the second year in a row, USDA Chief Economist Seth Meyer said as he presented USDA’s latest commodity and trade forecasts at the start of the department’s annual Agricultural Outlook Forum. China has already committed to buy 11.2 million metric tons of U.S. corn.
“We expect U.S. exports to be supported by a continued strong demand from China in the near term, so we don't feel that barrier of the TRQ is a rigid barrier,” Meyer said.
USDA’s last trade forecast in November had projected total U.S. ag exports at $152 billion for FY21, which ends Sept. 30.
Prices for many major commodities also are expected to remain strong or move even higher for this year's crops based on strong domestic and export demand.
Prices for the 2021 corn crop are expected to average $4.20 per bushel in 2021, down from $4.30 on the 2020 crop. Soybean prices are expected to average $11.15 on the 2020 crop and rise again to $11.25 on this year’s crop.
Wheat acreage for 2021 is expected to rise slightly to 45 million acres, up from 44.3 million in 2020, and prices are forecast at $5.50 a bushel for the 2021 harvest, up from $5 for 2020. However, there is now uncertainty around the winter wheat harvest because of recent freezing temperatures and their impact on Plains crops.
Prices for the 2021 cotton crop are forecast at 75 cents per pound, up from 68 cents for 2020. Cotton acreage is expected to remain flat this year at 12 million despite higher prices.
Rice prices are forecast at $13.60 per hundredweight for 2021, up from $13.40 on the 2020 crop.
Prices for cattle are expected to average $115 per hundredweight in 2021, up from $108.51 last year. Hog prices are expected to average $50.50 per hundredweight, compared to $43.18 in 2020. Broiler prices are forecast at 84.5 cents per pound, up from 73.2 cents per pound in 2020.
Dairy prices remain under pressure due to increased production. The all-milk price is expected to average $17.50 per hundredweight this year, down from $18.30 in 2020 and $18.63 in 2019.
Still, Meyer said "the prospects for crops and livestock are good, based upon continued strong domestic demand and good exports. We need both in order to achieve those prices that we forecast."
He cautioned that there are still several uncertainties about the farm economy, including about consumer spending as the economy recovers from the COVID-19 pandemic. There are also some lingering impacts of the pandemic on supply chains, including higher prices for shipping containers due to a lingering shortage.
“While we moderated those impacts of supply chains, we haven't eliminated them,” Meyer said.
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