Category: Trade

  • U.S. Wood Pellet Exports Continue to Reach Record Levels

    U.S. Wood Pellet Exports Continue to Reach Record Levels

    Woody biomass now accounts for a major share of renewable energy in the European Union (EU) and United Kingdom (UK) due to recent climate and renewable energy policies. Imports of wood pellets – often used in converted coal fueled power plants – in the EU and UK have reached record levels, with imports mostly coming from the southeastern region of the U.S. Consequently, wood pellets are now the leading forest-product export for the U.S., surpassing oak lumber, pine lumber, and other major exports (USDA, 2023). This article is not about the efficacy of European climate policy or the use of woody biomass in reducing carbon emissions. The overall goal of this article is to simply document the phenomenal rise in U.S. wood pellets exports over the last decade, mostly due to demand in the UK and EU, and the potential for increased exports in the future.

    Since 2012, U.S. wood pellet exports have increased from $258 million to $1.5 billion, which is an increase of 498%. According to USDA (2023), Louisiana, Georgia, North Carolina, Virginia, and Florida have been leading states. Figure 1 shows U.S. wood pellet exports (in million metric tons [MT]) from 2012-2022 by destination (UK, EU, and Rest of World). Note that the UK has accounted for the major share of the overall rise in exports since 2012, while the EU has accounted for the major share of growth in more recent years (2021 and 2022). Since 2012, U.S. wood pellets exports have increased from 1.9 million MT (35% shipped to the UK and 57% shipped to the EU) to nearly 9.0 million MT by 2022 (59% shipped to the UK and 31% shipped to the EU). During this period, the UK accounted for as much as 90% of total U.S. exports (see 2016). The demand for wood pellets in Europe has significantly outpaced domestic production over the past ten years. This has resulted in increased imports from mainly the U.S., Russia, Belarus, and Ukraine. With the Russian invasion of Ukraine, wood pellet imports from Russia, Belarus, and Ukraine have been significantly impacted (Flach and Bolla, 2022), which likely explains the recent increase in U.S. exports to the EU and the increase in export prices from an average of $124/MT (2012-2020) to well over $150/MT in 2021 and 2022 (USDA, 2023).

    Figure 1. U.S. wood pellet exports by destination: 2012-2022

    Source: U.S. Department of Agriculture, Global Agricultural Trade System

    References

    USDA (2023) Global Agricultural Trade System. Foreign Agricultural Service. https://apps.fas.usda.gov/gats/default.aspx

    Flach, B., and S. Bolla (2022) EU Wood Pellet Annual. Report Number: E42022-0049. USDA, Foreign Agricultural Service.


    Muhammad, Andrew. “U.S. Wood Pellets Exports Continue to Reach Record Levels.Southern Ag Today 3(10.4). March 9, 2023. Permalink

  • Fresh Produce Imports from Mexico Continue to Rise

    Fresh Produce Imports from Mexico Continue to Rise

    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

    Source: Agricultural Marketing Service (AMS), USDA

    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

  • U.S. Agricultural Exports Set Another Record in 2022, but Higher Prices Appear to be the Cause

    U.S. Agricultural Exports Set Another Record in 2022, but Higher Prices Appear to be the Cause

    The 2022 data on U.S. agricultural exports are now available and it looks like another record year. U.S. agricultural exports were $196 billion in 2022, up $20 billion (up 11%) when compared to the previous year. Note that 2021 was also a record year for U.S. agricultural exports ($177 billion). It appears that record sales were more so due to higher commodity prices and global inflation than an increase in real export sales. That is, the U.S. did not necessarily sell more soybeans, grains, meats, or other products to the world, we simply sold the same or even lower volumes at higher prices.

    Figure 1 shows both the agricultural export value ($ billion) and volume (million metric tons [MT]), as well as the average export price or unit value ($/MT) for the U.S. Given the broad range of exported products, a total volume measure is clearly a representative equivalent. However, as long as the U.S. Department of Agriculture is consistent every year with how volumes are measured, comparisons over time can reveal what is driving recent export growth. In 2021, U.S. agricultural exports increased from $150 to $177 billion, which was an 18% increase. However, the export volume during this period increased by only 2%: 226 million MT in 2020 to 230 million MT in 2021. Given the larger increase in value, clearly, the record in 2021 was more so due to prices. However, albeit relatively smaller, the volume did increase. In 2022, however, the volume of U.S. agricultural exports (216 million MT) was down by 6%, despite the value being up by 11% to a record level. Note that the average export price or per-unit export value in 2022 ($906/MT) was up 18% when compared to the previous year ($768/MT). Thus, the most recent record is all due to higher prices.

    In closing, record export sales in the last two years being more inflationary than representative of real export growth is not necessarily a bad thing and is in fact, quite laudable. Most important, higher values do suggest higher revenues for U.S. producers regardless of the quantities being sold. When taking a longer view, there is another positive takeaway. Note that export volumes significantly decreased with rising prices in past years (e.g., 2010 – 2013), resulting in negligible increases in export values. Whereas in the last two years, export volumes have remained relatively stable despite significantly higher prices.

    Figure 1. U.S. Agricultural Exports (Volume, Value, and Unit Value): 2010-2022

    Source: USDA, Foreign Agricultural Service, Global Agricultural Trade System (GATS) (2022)

    References

    US. Department of Agriculture. 2023. Global Agricultural Trade System (GATS). Foreign Agricultural Service, Washington, DC.


    Muhammad, Andrew. “U.S. Agricultural Exports Set Another Record in 2022, but Higher Prices Appear to be the Cause.Southern Ag Today 3(6.4). February 9, 2023. Permalink

  • Brazil Challenging U.S. Corn Export Top Spot

    Brazil Challenging U.S. Corn Export Top Spot

    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

    Source: Production, Supply, and Distribution (PS&D); USDA-FAS

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

    Source: Production, Supply, and Distribution (PS&D); USDA-FAS

    Author: Luis A. Ribera

    Professor and Director

    Center for North American Studies

    Texas A&M University


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

  • China’s imports of U.S. Beef continue to increase. But how does the U.S. compare to other competing countries?

    China’s imports of U.S. Beef continue to increase. But how does the U.S. compare to other competing countries?

    In a previous article, I highlighted that China’s demand for beef is breaking records and imports have increased to unprecedented levels in recent years. Since 2010, Chinese beef imports increased from about $100 million to nearly $16.6 billion by 2022 (nearly a 16,000% increase), making China the world’s largest beef importing country (Trade Data Monitor®, 2023; UN Comtrade, 2022). In years past, beef was not a major protein source in China, but economic growth and exposure to western diets has increased beef awareness. Due to several factors (higher incomes, health awareness, protein shortages due to African swine fever), Chinese consumers have diversified their diets away from pork, the traditional animal protein. Beef demand is outstripping supply in China, resulting in rising imports. As mentioned in the previous article, U.S. beef exports to China have significantly increased as a result. But how does the U.S. compare to other beef exporting countries in the Chinese market?

    Figure 1 shows the value (in billions) of China’s beef imports by major exporting source: Argentina, Australia, Brazil, New Zealand, Uruguay, United States, and Rest of WorldRest of World is an aggregation of all other countries. Note that Chinese imports of U.S. beef products in 2022 were $1.7 billion, making China a leading destination market for the U.S. From the Chinese perspective, however, this was about 10% of China’s total imports, making the U.S. China’s 4th leading supplier ahead of Australia ($1.5 billion, 9%) and New Zealand ($1.4 billion, 8%). The figure shows that South American countries are more dominant in the Chinese market (Argentina – $2.5 billion, 15%; Uruguay – $1.8 billion, 11%). This is especially true for Brazil. In 2022, China imported nearly $7.0 billion of beef products from Brazil. No other country comes close (40% of China’s beef imports). What’s interesting is that both Brazilian and U.S. beef were banned in China due to animal disease issues (e.g., FMD, BSE). While the U.S. recovery since 2017 has been noteworthy, Brazil’s recovery since 2014 has been quite extraordinary.

    Figure 1. Chinese beef and beef product imports by exporting source: 2010-2022

    Source: Trade Data Monitor®

    References

    UN Comtrade (2022). UN Comtrade Databasehttps://comtrade.un.org/

    Trade Data Monitor (2023). https://www.tradedatamonitor.com/

    Muhammad, Andrew. China Emerges as a Leading Destination for U.S. Beef Exports. Southern Ag Today 2(49.4). December 1, 2022. https://southernagtoday.org/2022/12/china-emerges-as-a-leading-destination-for-u-s-beef-exports/

    Author: Andrew Muhammad

    Professor and Blasingame Chair of Excellence

    The University of Tennessee


    Muhammad, Andrew. “China’s imports of U.S. beef continue to increase. But how does the U.S. compare to other competing countries?Southern Ag Today 3(2.4). January 12, 2023. Permalink