January 2018
Ag Insight

Ag Insight

U.S. Ag Exports Hit $140.5 Billion in 2017

U.S. agricultural exports were $140.5 billion in fiscal year 2017, climbing nearly $10.9 billion from the previous year to the third-highest level on record.

As it has done for well over 50 years, the U.S. agricultural sector once again posted an annual trade surplus, reaching $21.3 billion, up almost 30 percent from last year’s $16.6 billion.

"U.S. agriculture depends on trade," U.S. Secretary of Agriculture Sonny Perdue said. "It is great to see an increase in exports and we hope to open additional markets to build on this success."

China finished the fiscal year as the United States’ largest export customer, with shipments valued at $22 billion, followed closely by Canada at $20.4 billion. U.S. agricultural exports to Mexico reached $18.6 billion, a 6-percent gain from last year, and exports to Japan grew 12 percent, to $11.8 billion.

Rounding out the top 10 markets were the European Union ($11.6 billion), South Korea ($6.9 billion), Hong Kong ($4 billion), Taiwan ($3.4 billion), Indonesia ($3 billion) and the Philippines ($2.6 billion).

U.S. bulk commodity exports set a volume record of 159 million metric tons, up 11 percent from FY 2016, while their value rose 16 percent to $51.4 billion. The surge was led by soybean exports, reaching a record 60 million metric tons, valued at $24 billion.

Exports of corn, wheat and cotton all grew as well, with the value of cotton exports climbing 70 percent, to $5.9 billion. Wheat exports were up 21 percent, to $6.2 billion, and corn exports rose 6 percent, to $9.7 billion.

A number of other products saw significant export increases as well. U.S. dairy exports grew 17 percent, to $5.3 billion; beef exports were up 16 percent, to $7.1 billion; and pork exports rose 14 percent, to $6.4 billion.

Overall, horticultural-product exports increased 3 percent to nearly $33.9 billion; largely driven by an 8-percent increase in exports of tree nuts, reaching $8.1 billion, the second-highest total on record.

Exports are responsible for 20 percent of U.S. farm income.



Technology Drives Increase in Farm Output

Technological innovations in animal and crop genetics, chemicals, equipment and farm organization have enabled continuing output growth in U.S. agriculture while using less inputs.

As a result, even as the amount of land and labor used in farming declined, total agricultural output more than doubled from 1948 to 2015. During this period, agricultural output grew at an average annual rate of 1.48 percent, compared to 0.1 percent for total farm inputs (including land, labor, machinery and intermediate goods).

The major source of output growth is the increase in agricultural productivity, as measured by total factor productivity, the difference between the growth of aggregate output and growth of aggregate inputs.

From 1948 to 2015, TFP grew at an average annual rate of 1.38 percent, accounting for over 90 percent of output growth.


USDA Offers Help to Veterans

Perdue has announced the U.S. Department of Agriculture will offer resources to provide comprehensive and timely support to veterans interested in opportunities in agriculture, agribusiness and rural America.

The resources include a new website and a USDA-wide AgLearn curriculum to allow all employees to understand the unique opportunities offered to the nation’s veterans.

"Through these resources, USDA is committed to helping veterans in agricultural areas so we can strengthen the American economy and provide assistance for those who have served," Perdue said.

USDA supports veterans in the areas of the three E’s – employment, education and entrepreneurship – and pulls together programs veterans can use from the department’s 17 agencies.

Veterans interested in learning more about opportunities through USDA can visit www.usda.gov/veterans or visit their local USDA Service Center.



Broadband Service More Limited
in Nearly 800 Rural Counties

Internet service providers have been increasing access to broadband in rural areas by expanding DSL and cable technologies, wireless platforms, satellite systems and, to a lesser extent, fiber-optic systems.

Despite a slower growth rate in broadband subscriptions since 2010 compared with the previous decade, county-level data indicate that rural household connectivity continues to improve and expand geographically.

From 2010-2016, the number of rural counties with wired broadband subscriptions exceeded the rural average (60 percent or more of households) increased from 281 to nearly 1,200.

Rural counties newly above the 60-percent threshold for broadband are concentrated in the Northeast, Upper Midwest and the Intermountain West. Extensive parts of rural Appalachia also saw improvement in broadband access to above 60 percent.

Broadband service remains more limited in two types of rural regions: isolated, sparsely settled counties in the Great Plains, Nevada, New Mexico, Alaska and elsewhere; and high-poverty, high-minority regions such as on tribal lands in the West and stretching from southern Virginia to east Texas in the South.


School Meal Programs Affected by New Rule

The recently published School Meal Flexibility Rule makes targeted changes to standards for meals provided under USDA’s National School Lunch and School Breakfast Programs and asks customers to share their thoughts on the changes with the Department.

The interim final rule reflects USDA’s earlier commitment to work with program operators, school nutrition professionals, industry and other stakeholders to develop strategies to ensure school nutrition standards are both healthful and practical, said Perdue.

"These flexibilities give schools the local control they need to provide nutritious meals that school children find appetizing," Perdue noted.

The interim rule gives schools the option of serving low-fat (1 percent) flavored milk. Currently, schools are permitted to serve low-fat and non-fat unflavored milk as well as non-fat flavored milk.

States also will be allowed to grant exemptions to schools experiencing hardship in obtaining whole grain-rich products acceptable to students during school year 2018-19.

In addition, schools and industry will have more time to reduce sodium levels in school meals. Instead of further restricting sodium levels in SY 2018-19, schools that meet the current Target 1 limit will be considered compliant with USDA’s sodium requirements.

The rule will begin in SY 2018-19. USDA will accept public comments on these three flexibilities via www.regulations.gov before developing a final rule addressing the availability of these provisions in the long term.



Pear Production, Consumption Trending Down

USDA has forecast the 2017 U.S. pear crop will decline for a fourth consecutive year to 1.41 billion pounds, down 4 percent from the previous year.

If realized, production will be the smallest reported since 1980, pointing to stronger pear prices during the 2017/18 marketing season (July-June).

Due in large part to a long winter and cold spring, expected lower production (down 20 percent from the previous year) in Washington, the largest pear-producing state, is driving the smaller overall U.S. crop.

Declining production and higher prices also have translated into reduced per capita pear consumption, trending downward for most of the last 20 years except for a temporary resurgence in the mid-2000s.

Higher prices from lower pear output in 2017 are expected to diminish demand, leading to a projected per capita use of just over 2.5 pounds per person. This would be the lowest since 1984.