How important is US agriculture to the rest of the world? $137 billion worth, at least in FY 2011.  That is the latest estimate of US farm exports through the end of September, which is an increase of $1.5 billion from the last USDA estimate in February, and $28.3 billion above 2010 US ag exports.  Is the world hungry, are your commodities better than others or what is the reason for exports being a larger segment of the dollar you put in your bank account?  And should you care?

USDA’s latest Outlook on US Agricultural Trade continued to push higher the estimated value of farm commodities going into international trade.  While the value continues to rise, there are some commodities that are finding themselves more valuable than others. 
1) Grain and feed exports are lower compared to February by some $100 million, primarily because of wheat values.  Wheat exports will be down $600 million due to lower volume that stems from greater competition from Australia and Canada.  Corn exports will be $300 million higher because of tight supplies.  Feeds, including DDGS, will be up $100 million.
2) Oilseed exports remain steady at a $30.2 billion value.  However, higher soybean values will offset a lower soybean volume to be exported.  One of the dynamics is China, which will slow its imports after building up its soybean stocks.
3) Meat exports are raised to $26.5 billion, which is a record.  Beef and pork each will record a $500 million boost in business, particularly from Asia.  Global demand remains strong and international prices will remain at high levels.

The global economy is doing well, and will be able to afford increased volumes and values of food products, say USDA economists.  World trade volume in 2010 rose 13.6%, offsetting the drop in value seen in 2009.  For the current year, world trade is expected to grow 6.8%, with the help of the Chinese and Indian economies.

Inflation is up and the value of the dollar is down compared to the prior fiscal year.  Central banks in Asia, Europe and Latin America have boosted interest rates in an effort to slow inflation.  Those higher rates have supported local currencies over the dollar and it has fallen in value, something that will delay interest rate increases in the US.

The higher interest rates in many countries have the potential to curtail economic growth, and slower demand growth in an emerging market country could slow trade and curtail growth by the end of the fiscal year.  While the dollar is weak and interest rates are low, gains have been made in world growth for the year.

When the trade route is reversed, USDA reports that agricultural imports jumped 18% in the first half of the fiscal year.  Higher import prices made up the bulk of the increase, part of which is attributed to the lower value of the dollar.  Subsequently, imports are expected to reach $93 billion in the current year, some $5 billion above the February estimate.

Increased global demand for US farm commodities, including beef and pork, have pushed higher the export trade to $137 billion, up from the latest estimate in February, and more than $28 billion above 2010 totals.  Grain and feed demand declined slightly because of higher values, oilseeds remained steady, but beef and pork each gained $500 million in increased export values.  Ag imports also rose, but because that increase was more than exports, the balance of trade declined slightly.