Economic Tidbits

62-Year Trade Streak is Broken

For the first time in 63 years, the U.S. had a deficit in 2022 in its trade of agricultural goods. Dwight Eisenhower was president, and the average corn price was $1.38 per bushel the last time this happened. But streaks are made to be snapped and last year did just that when the value of U.S. agricultural imports exceeded exports by $2.0 billion. Yet, despite the trade deficit, the U.S. had a record-breaking year in terms of the value of agricultural exports. Just over $196 billion of agricultural goods were sold overseas, besting 2021 by 11 percent. It was the second consecutive year of double-digit growth. However, imports grew more rapidly, climbing 16 percent and reaching $198 billion. Fruits, vegetables, wine, liquor, processed grains, red meats, and cocoa make up the bulk of U.S. agricultural imports.

Export growth was led by soybeans, up 26 percent over the prior year (Figure 1). Wheat and animal feeds also saw double-digit growth up 17 percent and 11 percent, respectively. Red meats (beef, pork, and lamb) saw growth of 4 percent. The U.S. Meat Export Federation (USMEF) reports the export value of beef climbed to a record $11.68 billion, up 10 percent from 2021 and nearly 40 percent above the previous five-year average. On the other hand, the values of corn and hides and skins were off, corn by 1 percent and hides and skins by 5 percent. Although off last year, corn exports in 2021 more than doubled, so being down only 1 percent is still a good number.

Figure 1. Changes in the Value of U.S. Agricultural Exports, 2019-2022

Source: USDA Economic Research Service

Figure 2. Changes in the Volume of U.S. Agricultural Exports, 2021 & 2022

Source: USDA Economic Research Service

The growth in export values last year was a positive for Nebraska agriculture and helped secure a second year of strong net farm income. Nearly all of Nebraska’s key export commodities saw improved sales, and for those that did not, the declines were small. Unfortunately, the export picture for 2023 is not as solid. The ongoing war in Ukraine, rising interest rates, the value of the dollar, a sluggish global economy, and world geopolitics are headwinds to sustained growth. The latest USDA forecasts show reduced export volumes of wheat, corn, soybeans, and beef. Pork exports are the exception, with expectations of growth. Prices are forecast higher which could again offset lower volumes. Still, it’s hard to imagine another record-breaking year for exports.

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