The United States Department of Agriculture (USDA) has revised its 2023 agricultural exports forecast, reducing it by $3.5 billion to $181.0 billion compared to its previous estimate in February. The decrease is primarily attributed to declines in corn, wheat, beef, and poultry exports. Concurrently, the USDA projects imports to reach $198.0 billion in 2023, down $1.0 billion from the previous forecast. This decline is primarily driven by reduced imports of horticultural, livestock, dairy, and poultry products. Notably, this year's trade deficit is the first since 2020.
USDA Chief Economist Seth Meyer stated that the trade gap is expected to be around $17 billion, with a significant portion attributed to horticultural products. Fresh vegetable and fruit products in the winter, when they may not be produced domestically, account for $99 billion of the trade deficit, according to the USDA.
The forecast for grain and feed exports stands at $40.5 billion, down $3.3 billion from the February projection. On the other hand, the forecast for oilseed and products exports has been increased by $100 million to $43.5 billion.
The USDA anticipates corn exports to amount to $14.5 billion, a decrease of $2.1 billion from the previous forecast, driven by lower unit values and volumes. Brazil's projected record corn production has contributed to eased global prices, making Brazilian corn more price competitive than that of the United States.
Soybean exports are projected to increase by $300 million to $32.3 billion, primarily due to slightly higher volumes. Soybean meal export volume has also increased, resulting in a $100 million rise in export value to $6.3 billion.
However, the outlook for livestock, poultry, and dairy exports has been lowered by $1.2 billion to $39.3 billion. The decrease is primarily driven by lower estimates for beef and poultry exports, although gains in dairy partially offset the decline. Beef exports experienced the largest decrease, down $700 million to $9.3 billion, primarily due to weaker unit values for beef muscle cuts. USDA maintained the forecast for pork exports at $6.3 billion, while poultry and products exports were reduced by $300 million to $6.7 billion.
USDA also highlighted emerging economic growth challenges as monetary conditions tighten and inflation persists. Global real gross domestic product (GDP) is projected to increase by 2.8% in 2023, while the United States' real GDP growth projection has been raised to 1.6%, up from 1.4% in February.
Despite resilient U.S. consumer spending, the April 2023 Consumer Price Index (CPI) showed a 4.9% increase in prices over the past 12 months. The Federal Reserve, responding to above-target inflation and a low unemployment rate of 3.4% in April, has reaffirmed its plan to continue with scheduled interest rate hikes.