Economic Tidbits

Export Pace Slowing

The languid pace for U.S. agricultural exports in the first quarter of 2023 continued through the second quarter. For the first half of the year, the value of U.S agricultural exports was off 11 percent compared to the same period last year while export volume was down 7 percent. This follows last year’s record-breaking performance when the value of exports totaled just over $196 billion, besting 2021 by 11 percent. The value of exports slowed further in the second quarter relative to the first. It was down only 2 percent at the end of the first quarter but was off 11 percent by the end of the second. Lower prices are the likely culprit. Meanwhile, the volume of bulk exports improved. The volume was off 17 percent in the first quarter but recovered to be down just 7 percent by the end of June.

Figure 3 compares annual percentage changes in the value of important Nebraska agricultural exports for 2019-2022 with year-to-date figures for 2023. The animal feeds and oil meal category was the only one which saw growth in the first half of the year, 6 percent, compared to the last year. The export value of soybeans was unchanged for the year at the end of June; however, the second quarter was pitiful for soybean sales. Coming out of the first quarter, sales were up 38 percent. All other commodities saw export values decline in the first half of the year. Corn exports were off 33 percent, followed by wheat, off 18 percent. 

FIGURE 3. CHANGES IN THE VALUE OF U.S. AGRICULTURAL EXPORTS, 2019-2023 YTD

Source: USDA Economic Research Service

In terms of volume, only red meats saw more tonnage exported in the first half of the year compared to last year: up 3 percent. Pork exports, up 14 percent, fueled the growth as beef exports were down. According to the U.S. Meat Export Federation (MEF), beef exports were off 10 percent in terms of volume and 19 percent in terms of value. Exports to Mexico, up 14 percent, were the one bright spot. Exports to other major markets like Japan, Korea, or Taiwan are down. Corn and wheat also saw notable declines in export volumes in the first half compared to last year. Corn was down 39 percent and wheat 18 percent.

Less crop production, higher interest rates, stronger dollar, sluggish global economy, strong competition, and world geopolitics have been headwinds for U.S. agricultural exports. And more tough sailing appears to be in the offing. The Daily Livestock Report says outstanding beef export sales at this point are about one-third of last year’s. The USDA expects beef exports will be down 9 percent for the year. The USDA also forecasts corn, soybeans, wheat, and byproduct sales to remain sluggish. In fact, wheat exports could fall to a 52-year marketing year low.

U.S. agricultural exports were expected to decline in 2023. The decline, though, has been greater than what most observers probably expected.

FIGURE 4. CHANGES IN THE VOLUME OF U.S. AGRICULTURAL EXPORTS, 2021-2023 YTD

Source: USDA Economic Research Service

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