Trade Winds in Agriculture November 2, 2018 Dr. Scott Brown MU-CAFNR: Director of Strategic Partnerships brownsc@missouri.edu http://amap.missouri.edu
Overview Trade uncertainty has increased as past trade agreements are renegotiated New USMCA agreement awaiting ratification Other trade discussions ongoing Tariff escalation with China remains front and center Disease outbreaks and other events can cause abrupt effects
Billion Dollars U.S. Agricultural Trade: A Two-Way Street 180 160 140 120 100 80 60 40 20 0 1980 1985 1990 1995 2000 2005 2010 2015 Exports Imports
Index, 1990-95 avg. = 1.0 Trade: Why is it Important? 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Corn+Soy+Wheat Prod. Beef+Pork+Chicken Prod. U.S. Population
Index, 1990-95 avg. = 1.00 Trade: Why is it Important? 1.40 1.35 1.30 1.25 1.20 1.15 1.10 1.05 1.00 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 U.S. Population ROW Population
Index, 1990-95 avg. = 1.0 Trade: Why is it Important? 2.2 2.0 1.8 1.6 1.4 1.2 1.0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 U.S. Real GDP ROW Real GDP
Percent Value of Ag Exports / Farm Receipts 36 34 32 30 28 26 24 22 20 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Top Commodity Exports, 2008-2017 Billion $ % of total Soybeans 201.5 15.4% Corn 99.2 7.6% Wheat 77.9 6.0% Other Feeds & Fodder 60.4 4.6% Cotton 52.1 4.0% Misc Hort Products 48.0 3.7% Beef & Veal 45.7 3.5% Pork 42.2 3.2% Soybean Meal 41.9 3.2% Almonds 35.2 2.7%
Top Commodity Imports, 2008-2017 Billion $ % of total Coffee 59.6 6.0% Wine 50.7 5.1% Cocoa and Products 43.7 4.4% Malt Beverages 40.1 4.0% Beef & Veal 38.5 3.9% Misc Hort Products 31.3 3.1% Biscuits & Wafers 30.5 3.0% Other Grains 26.6 2.7% Other Beverages 26.5 2.6% Essential Oils 24.2 2.4%
Top Export Destinations, 2008-2017 Billion $ % of total China 198.5 15.2% Canada 193.7 14.8% Mexico 171.9 13.1% Japan 123.1 9.4% European Union 105.8 8.1% South Korea 59.0 4.5% Hong Kong 32.8 2.5% Taiwan 32.7 2.5% Indonesia 25.0 1.9% Philippines 21.9 1.7%
Index 2012 = 1.00 U.S. Exchange Rate Versus Major Trading Partners 1.50 1.40 1.30 1.20 1.10 1.00 0.90 0.80 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Percent U.S. Soybean Exports 80 70 60 50 40 30 20 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 as % of U.S. production as % of world exports (p)
Percent U.S. Corn Exports 90 80 70 60 50 40 30 20 10 0 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 as % of U.S. production as % of world exports (p)
Percent U.S. Beef Exports 20 18 16 14 12 10 8 6 4 2 0 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 as % of U.S. production as % of world exports
Percent U.S. Pork Exports 40 35 30 25 20 15 10 5 0 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 as % of U.S. production as % of world exports
Million Metric Tons Major Soybean Importers 180 160 140 120 100 80 60 40 20 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 China EU ROW U.S. exports (p)
Million Metric Tons Major Soybean Exporters 90 80 70 60 50 40 30 20 10 0 2000 2003 2006 2009 2012 2015 2018 (p) U.S. Brazil Argentina ROW
Million Metric Tons Major Corn Importers 180 160 140 120 100 80 60 40 20 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 (p) Japan Korea Mexico ROW U.S. exports
Million Metric Tons Major Corn Exporters 70 60 50 40 30 20 10 0 2000 2003 2006 2009 2012 2015 2018 (p) U.S. Brazil Argentina ROW
Million Metric Tons Major Beef Importers 9 8 7 6 5 4 3 2 1 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 (p) U.S. Japan Russia ROW U.S. exports
Million Metric Tons Major Beef Exporters 5.6 4.9 4.2 3.5 2.8 2.1 1.4 0.7 0.0 2000 2003 2006 2009 2012 2015 2018 (p) Australia Brazil India ROW
Million Metric Tons Major Pork Importers 9 8 7 6 5 4 3 2 1 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 (p) China Japan Mexico ROW U.S. exports
Million Metric Tons Major Pork Exporters 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2000 2003 2006 2009 2012 2015 2018 (p) U.S. EU Canada ROW
Million Metric Tons World Skim Milk Powder Production 6 5 4 3 2 1 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 (p) EU US India New Zealand Australia ROW
Million Metric Tons World Whole Milk Powder Consumption 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 (p) China Brazil EU Algeria Indonesia ROW
Percent China Tariffs for Selected Products 70 60 50 $39,921M Value of exports since Jan 2015 (Million U.S. $) $748M $630M $240M $70M 40 30 20 10 0 Soybeans Swine offal frozen Swine cuts frozen Hams bone-in frozen April 2 increase July 6 increase current applied rate Bovine meat
November 2018 Soybean Futures
Dollars per Cwt. Ham Primal Value 95 90 85 80 75 70 65 60 55 50 45 1 5 9 13 17 21 25 29 33 37 41 45 49 2018 2017 2013-16 avg. 2018 + tariff
Million $ U.S. Pork Export Value to China/HK 1,200 1,000 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017 Including Variety Meat Not Including Variety Meat
Summary Future consumption growth comes from outside the U.S. Different risks come from export markets versus domestic markets New trade restrictions always possible Effects that shutoff access to countries Economic growth Negotiating trade agreements can create uncertainty Production growth depends on strong domestic and international demand