The value of U.S. ag exports is now seen at $127 billion for Fiscal 2016, up from a prior outlook of $124.5 billion, while Fiscal 2016 imports are now forecast at $113.1 billion, down from the May outlook for imports at a record $114.8 billion.
This translated into the trade surplus being raised to $13.9 billion from a prior forecast of $9.7 billion, according to USDA.
The Fiscal 2016 estimate for grain and feed exports is up $1.6 billion to $29.3 billion, supported largely by coarse grain and products. "Volumes for corn, sorghum, and feeds and fodders are higher from the May forecast, reflecting robust sales and shipments," USDA noted. "Feed and other products, including distillers' dried grains with solubles (DDGs), are up marginally with continued sales to China."
For oilseeds, USDA now pegs Fiscal 2016 exports at $28.3 billion, up $2.2 billion from the previous forecast. "A surge in late-season exports due to limited soybean availability in Brazil has pushed soybean and soybean meal volume higher," USDA noted, adding that "record peanut exports, particularly to China, added an additional $200 million to the total export value."
The forecast for livestock, dairy and poultry export value is now at $25.0 billion, down $400 million from the prior outlook as an increase in pork exports is more than offset by declines dairy products, poultry products, and hides, skins, and furs.
Expectations were for the Fiscal 2016 outlook to be adjusted as USDA had previously forecast the trade surplus at $9.7 billion, a mark that was well below what the current surplus was at with just three months left to go before Fiscal 2016 ends.
For Fiscal 2017, the projected export value of $133 billion is up $6 billion from the revised Fiscal 2016 forecast of $127 billion, "largely due to higher exports of oilseeds and products, horticultural products, cotton, and livestock, dairy, and poultry."
The value of the U.S. dollar and other factors will play a key role in the prospects for the Fiscal 2017 export forecast to be realized. That appears to have been a factor in the Fiscal 2016 situation as the fiscal year continues to wind down.
Chinese truck and bus tires will be subject to preliminary dumping duties of 20.87% to 22.57%, the Commerce Department said after finding China is dumping those products on the U.S. market.
U.S. Customs and Border Protection (CBP) will collect cash deposits based on the preliminary rates retroactively 90 days prior to publication of the preliminary determination in the Federal Register, Commerce said August 29.
The investigation was requested by the United Steelworkers union and focused on Prinx Chengshan (Shandong) Tire Co., Ltd. and Double Coin Holdings Ltd. A final determination by the Commerce Dept. is expeced on or around January 17.
If it continues to find dumping, the case would go to the International Trade Commission (ITC) for a final ruling on injury to the U.S. domestic tire industry.
The matter presents yet another trade-friction issue that may well find its way onto the agenda when President Obama visit China in September, a visit already seen linked to China's determination on whether U.S. DDGs have been dumped on the Chinese market.
The Washington Post is not much of a fan of either ag programs or ag trade policy, but it has an article this week that notes that when last year's "bird flu" outbreak hammered parts of the U.S. poultry industry, our trade agreements maintained important access to foreign markets.
In 2015, the United States battled its worst-ever outbreak of avian influenza, the Post notes. While the Centers for Disease Control reported no cases among humans, the Department of Agriculture put the price tag for taxpayers at $950 million for cleanup and payments to more than 200 affected commercial poultry farms.
The outbreak required the slaughter of 50 million chickens and turkeys. Annual U.S. poultry exports fell by more than $1.5 billion after some trading partners banned all U.S. poultry products.
However, the article focuses on how the global trade framework kept this situation from becoming far worse as major U.S. partners trusted U.S. regulators to stop the disease from entering their markets, unlike reactions in earlier decades.
It turns out, the Post says, the much-pilloried NAFTA free trade agreement and even the Trans-Pacific Partnership helped the stricken industry a lot. The multilateral WTO agreement had provided the first step for encouraging countries to base trade policies on sound scientific evidence and the newer free trade agreements (FTAs) push partners to engage in additional regulatory cooperation with the United States.
The article focuses on the highly pathogenic avian influenza outbreak in 2015. The disease is thought to have been transmitted from wild waterfowl to commercial poultry as infected flocks of ducks or geese migrated. Chickens and turkeys on farms in 15 states in the Pacific Northwest and Midwest were affected in the first half of 2015.
Veterinarians from U.S. government agencies, including Department of the Interior and USDA, worked with producers to help contain the outbreak by drastically culling infected flocks, disposing of carcasses and then decontaminating and cleaning the entire farms. The last incident was reported in June 2015.
USDA provided real-time public updates about what it was finding and reported details to the World Organization for Animal Health in Paris, the OIE.
The United States and other large countries had specifically agreed that if a country can make the scientific case that an outbreak has been contained in a geographic region and a limited set of products, then partners' trade bans "should not target" unaffected products from other regions.
Since chickens raised for meat had escaped contamination, those flocks generally were not required to be culled.
So, U.S. chicken production actually increased in 2015. This is important because chicken meat makes up roughly two-thirds of the value of total U.S. poultry production. And, the avian flu ban might also have extended to chicken meat farms, but didn't. Since trade bans historically have remained in place long after the disease has subsided, this was especially important. For example, the first known U.S. case of mad cow disease in December 2003 caused U.S. beef bans worldwide and exports to decline sharply for several years, the Post noted.
U.S. beef exports to Canada and Mexico resumed as disease concerns subsided but didn't reach pre-outbreak levels until 2006, so the bans cost U.S. producers billions of dollars. Japan and South Korea took much longer to remove their bans and their beef trade with the United States did not reach pre-BSE levels for more than a decade.
This time was different, the Post noted. In 2015, the United States had FTAs with 20 countries that significantly helped mitigate the impacts of the bird flu. U.S. poultry is a major export industry, with more than $5 billion in annual foreign sales. Before the outbreak, U.S. exports including eggs, turkey meat and chicken meat were split fairly evenly between U.S. free trade partners and others.
Overall, U.S. poultry exports declined by more than $1.5 billion in the 12 months after the final bird flu case was reported in June 2015. Poultry sales to countries without a negotiated FTA declined by 41% while those to NAFTA countries fell less than half that. During the same period, even exports to TPP partners with which the United States does not yet have an FTA, including Brunei, Japan, New Zealand, Malaysia, Vietnam fell by only 16%.
So, free trade agreements do more than just slash tariffs, the Post says. As the bird flu example shows, the introduction of deeper forms of regulatory policy cooperation provides major support to keep goods moving.
Certainly, the 2015 bird flu outbreak provides a strong case for increased international cooperation—the sort of thing a major part of modern trade agreements provide. And, these are one important type of benefit that could well be lost if the Trans-Pacific Partnership finally stalls in the Congress, Washington Insider believes.