Grain and feed exports forecast lower in 2012

The fiscal 2012 forecast for grain and feed exports compared with 2011 is forecast down $3.9 billion with wheat, corn, rice and feeds all lowered, due to competition especially from the Black Sea region according to the USDA's latest Outlook for U.S. Agricultural Trade report released on Feb. 23. Compared with November, the forecast is down $1.4 billion to $34.0 billion.

Corn, wheat, and feed products are down from November as are most other categories. Corn exports fall $300 million to $13 billion. Values are lowered from November, but are still at historic highs, underpinned by domestic stocks expected at the lowest level in 16 years. Despite strong competition from the Ukraine, volumes are boosted partly by higher demand from China.

Competition from Argentina is reduced due to concerns affecting new crop supplies there. Compared with fiscal 2011, fiscal 20120wheat exports are down $3.5 billion to $8 billion, with sharply lower shipments expected. Compared with the November forecast, wheat exports are down $200 million on slightly lower volume and unit values.

Wheat values are reduced with lower corn prices and record global wheat supplies. Volume, while slightly lower, is supported by sales of wheat to Mexico and South Korea for feeding. Rice exports are down $200 million to $1.8 billion based on lower prices. India’s re-entry into the export market is driving all prices down, making the U.S. less competitive.

Additionally, larger exports by Brazil into Western Hemisphere markets have cut U.S. market share. The fiscal 2012 forecast for oilseeds and products is $25 billion, some $4.2 billion lower than 2011, mostly due to strong early-season shipments from South America. This is down $1 billion from the November forecast on lower soybean export volume and unit value. Reduced volume quarter-to-quarter reflects weak early season sales from the U.S. following a record crop in Brazil.

Minimal growth in China’s import demand added to slow U.S. sales while contributing to a decline in export unit values. However, Brazil, Argentina, and Paraguay are expected to have smaller exportable supplies from this year’s crop which may support higher unit values in the coming months and allow for additional U.S. sales.

Soybean meal volume is forecast lower, as is export value, due to smaller crush and competition from other feed ingredients. Soybean oil volume and value declines are expected on stronger domestic use, smaller exportable supplies, and competition from other oils. The 2012 cotton export forecast is down $2.7 billion from 2011 to $6.2 billion, due to lower U.S. supplies and falling prices.

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