Author: Luis Ribera

Trade is very important to production agriculture in the United States. Over the last 12 years, 2011 to 2022, agricultural exports have accounted for over one-third of US gross farm income, 33.9 percent (USDA ERS and FAS).  US agricultural exports have experienced a 7-year expansion run from 2015 to 2022, going from $137.2 billion to $195.9 billion. This increase of US agricultural exports was accentuated during the Covid-19 pandemic years as total exports increased by 38.8 percent in value and 8.1 percent in volume between 2019 and 2022 (Tables 1 and 2).  The rather large difference between value and volume increases shows that there was a price increase in most of the commodities which can be attributed partially to an increase in quantity demanded of US agricultural products, but also to inflation experienced worldwide as well as the Russia-Ukraine war. The largest increase in value of the top five US agricultural exports from 2019 to 2022 are oilseeds and products, grain and feeds, and dairy and products with 65.2, 64.5, and 61.4 percent increases, respectively.  Moreover, in terms of volume, grains and feeds, poultry and products, and oilseeds and products have the largest increase with 12.7, 6.6, and 4.6 percent respectively.

Figure 1.  Value of US Agricultural Exports, Billion Dollars

Table 1. Value of U.S. Agricultural Exports, Thousand Dollars

Table 2. Volume of U.S. Agricultural Exports, Metric Tons

The latest USDA Outlook for U.S. Agricultural Trade report (August 2023) forecasted exports for 2023 at $177.5 billion, down $3.5 billion from the May forecast largely due to decreases in corn, wheat and tree nuts exports.  The year-over-year exports from January to July show an overall decrease of 11.5 percent in value and 17.7 percent decrease in volume (Tables 1 and 2).  In both, value and volume, the largest decreases are in grains and feeds with 22.6 and 27.5 percent, respectively.  The main reason for this decline is competition from Brazil, EU, and Russia.   Moreover, forecasted exports for 2024 are expected to be $172 billion, $5.5 billion below 2023, and $23.9 billion below 2022 exports.

References

U.S. Department of Agriculture (USDA).  “Outlook for U.S. Agricultural Trade: August 2023.”  AES-125, August 31, 2023. https://www.ers.usda.gov/webdocs/outlooks/107311/aes-125.pdf?v=1152.5

Mexico is the largest agricultural trading partner for the United States totaling $71.9 billion (imports plus exports) in 2022.  U.S. agricultural exports to Mexico totaled $28.5 billion while imports from Mexico totaled $43.4 billion.  The main agricultural products imported from Mexico are fruits and vegetables, in fact 44 percent of the fruits and 48 percent of the vegetables imported by the U.S. are from Mexico. The United States imported $18.7 billion of produce from Mexico during 2022, including fresh, frozen, and processed fruits, vegetables, and nuts. Just over 98 percent of these imports entered the United States by land ports between Mexico and Texas, New Mexico, Arizona, and California. When considering only fresh fruits and vegetables, which is nearly 89 percent of total produce, imports totaled $16.6 billion. These imports were shipped in 590,906 forty-thousand-pound truckloads. About 55 percent of U.S. fresh fruit and vegetable imports from Mexico entered through Texas land ports, arriving in 325,467 truckloads and worth $11.6 billion. The most active single port for fresh produce import from Mexico in 2021 was Pharr, Texas with 197,253 truckloads followed by Nogales, Arizona with 144,027 truckloads. Laredo, Texas (75,409 truckloads) and Otay Mesa, California (73,580 truckloads) rounded out the top four. Although there was a small drop of the number of fresh produce trucks crossing from Mexico in 2022, the expectation is that the positive trend seen over the last decade will continue as U.S. consumers continue to demand year-round supply of fresh produce.

Figure 1. U.S. Imports of Fresh Produce from Mexico by Truck, 2012-2022

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Photo by PhotoMIX Company: https://www.pexels.com/photo/vegetables-stall-868110/

Ribera, Luis. “Fresh Produce Imports from Mexico Continue on the Rise.” Southern Ag Today 3(8.4). February 23, 2023. Permalink

The U.S. has been the top corn exporter for a long time averaging around 45 percent of the world corn exports since 2000 with a high of 67 percent in 2005 (Figure 1).  The one exception since the turn of the century was in 2012; the most severe drought since the 1950s reduced corn production by over 13 percent in the largest producing states.  On the other hand, Brazil has increased its corn exports rapidly through the years securing the number two spot.  Brazil’s participation in the corn export market is quite remarkable. In 2000, corn exports from Brazil accounted for only 8.2 percent of the world total and reached its lowest volume of exports in 2004 with less than one percent. Brazil bounced back after claiming the top spot in 2012 and challenged the United States.  Currently, Brazil exports reached 47 million metric tons compared to 48.9 million metric tons for the United States, accounting for 26.4 and 27.4 percent of total world corn exports, respectively. 

The top world corn importers are EU, China, Mexico, Japan, and South Korea accounting for 47.2 percent (Figure 2).  Similar to Brazil in the exporting market, China’s rise as a major corn importer is remarkable.  China had nearly zero corn imports from 2000 to 2008, then gradually increased its share reaching around five percent in 2011, 2014, and 2019, and finally exploding as a top market for corn in 2020 and 2021.  Currently, China occupies the number two spot between the EU and Mexico.  U.S. corn exports to China earlier this month were around 70 percent shorter than at the same point in the previous two years.  On the other hand, Brazil corn shipments to China last month reached over one million metric tons and is on track to repeat the same amount this month.  Although Brazil exports to China seem to be coming at the expense of the United States, China’s continued purchases are a good sign for the world corn market.

Figure 1. Major World Exporters of Corn, MY 2012/13 – MY 2022/23

Figure 2. Major World Importers of Corn, MY 2012/13 – MY 2022/23

Author: Luis A. Ribera

Professor and Director

Center for North American Studies

Texas A&M University

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Ribera, Luis. “Brazil Challenging U.S. Corn Export Top Spot.” Southern Ag Today 3(4.4). January 26, 2023. Permalink

Recently the importance of agricultural trade for the United States was discussed which accounts for over one-third of U.S. gross farm income.  However, the benefits of trade freedom or having less trade barriers go well beyond a specific industry or country as seen in the graph below.  Countries are divided into three trade freedom groups, lowest, middle, and highest.  The areas compared for each trade freedom group are higher average per capita national income, food security, political stability along with violence and terrorism, and the environment. Countries with more trade freedom have higher average per capita national income, $28,947, compared to $8,513 and $3,769 for the middle and lowest trade freedom groups, respectively.  Moreover, countries with higher trade freedom scored higher in terms of food security.  This is an interesting point as some people believe that in order to have food security most of the food must be produced domestically, which is not necessarily the case.  Countries should produce agricultural products in which they have comparative and competitive advantages and import the ones that they do not or cannot produce them year-round.

Countries with higher trade freedom experience more political stability and less violence and terrorism. Something very important for law-abiding citizens that just want a peaceful life for themselves and their families. Finally, countries with more trade freedom also have healthier environments and less polluted ecosystems.  As in the area of food security, trade freedom allows countries to be more efficient in the use of their resources by producing those products that they are competitive and import the rest.

Trade is very important to production agriculture in the United States. Over the last decade, 2011 to 2020, agricultural exports have accounted for over one-third of U.S. gross farm income, 33.7 percent (USDA ERS and FAS).  U.S. gross farm income ranged from $399.4 billion in 2016 to $470.3 billion in 2014 while U.S. agricultural exports ranged from $137.2 to $154.5 billion in 2015 and 2014 respectively. Total agricultural exports reached a record in 2021 at $177 billion, but gross farm income data for 2021 is not out yet.  Moreover, in terms of volume, U.S agriculture exports over 20 percent of its production.  However, for some commodities that number is considerably higher.  In 2021, 83.6 percent of the U.Ss cotton crop was exported as well as 64.8 percent of U.S. sorghum crop (Table 1).  Soybeans, Wheat, and Rice producers also depend on exports for close to half of their production.  Also, the top five crops in Table 1 are very important crops in the South.

Table 1. U.S. Agricultural Exports as Percentage of Production, 2021

Commodity	Percentage of Production Exported
Cotton	83.6%
Sorghum	64.8%
Soybeans	48.7%
Wheat	48.6%
Rice	43.5%
Pork	25.4%
Poultry	16.5%
Corn	16.2%
Beef	12.3%

U.S. consumers also benefit from agricultural trade as they have year-round supply of food products that either cannot be produced domestically or are highly seasonal such as fruits and vegetables.  Virtually all limes and bananas consumed in the U.S. are imported and over 95 percent of the coffee consumed is not produced domestically (Table 2).  Orange juice and tomatoes are produced in the U.S. commercially, however, U.S. consumers depend heavily on imports for year- round supply of these products.

Table 2. U.S. Agricultural Imports as a Share of Domestic Consumption, 2021

Commodity	Percentage of Consumer Expenditures
Limes	99.9%
Bananas	99.9%
Coffee	95.1%
Orange Juice	57.8%
Tomatoes	41.2%
Beef	12.5%
Pork	7.0%

Regardless of where the agricultural products are produced, domestically or overseas, all U.S. consumers benefit.  Table 3 shows the ranking of the top 10 countries in terms of lowest to highest percentage of disposable income spent on food at home and does not include eating out. U.S. consumers spend on average 7.1 percent of their disposable income on food which makes it the lowest out of 104 countries where data is available.

Table 3. Percent of Consumer Expenditures Spent on Food Consumed at Home, 2020.

	Country/Territory	Share of Consumer Expenditures
1	USA	7.1%
2	Singapore	7.9%
3	United Kingdom	9.4%
4	Austria	9.7%
5	Switzerland	10.2%
6	Ireland	10.3%
7	Canada	10.6%
8	Australia	10.8%
9	South Korea	11.6%
10	Germany	11.7%

Ribera, Luis. “Importance of Agricultural Trade for the U.S.“. Southern Ag Today 2(35.4). August 25, 2022. Permalink