Oh, Canada!

Successful Farming - - FIRST CUT -

The run­ner-up for most of this decade, Canada re­placed China as the top mar­ket for U.S. farm ex­ports in the fis­cal year that ended on Septem­ber 30 be­cause of the Sino-U.S. trade war. USDA econ­o­mists say China slipped to third place, be­hind Mex­ico, in fis­cal 2018 and will fall to No. 5, trail­ing the EU and Ja­pan in the new year.

“Agri­cul­tural ex­ports to China are fore­cast down $7 bil­lion from fis­cal 2018 to $12 bil­lion, as soy­bean sales are ex­pected to be sharply lower due to re­tal­ia­tory tar­iffs, which also curb de­mand for other prod­ucts,” says USDA in its first fore­cast of ag ex­ports in fis­cal 2019. In May, USDA fore­cast $21.8 bil­lion in sales to China in fis­cal 2018; the up­dated es­ti­mate for 2018 is $19 bil­lion.

While ex­ports to China plunge, Canada and Mex­ico would re­main steady cus­tomers de­spite their own trade dis­putes with the U.S. The North Amer­i­can neigh­bors ac­count for one third of U.S. food and ag trade flow. Pres­i­dent Trump says he will pro­ceed with a trade agree­ment with Mex­ico “and with Canada, if it is will­ing,” to re­place NAFTA.

Over­all, U.S. farm ex­ports to­taled $144 bil­lion in fis­cal 2018, says USDA – the sec­ond-best year ever. Sales would creep up­ward to $144.5 bil­lion in fis­cal 2019, fu­eled by strong eco­nomic growth world­wide. Pat Westhoff of the FAPRI think tank says the USDA fore­cast of strong 2019 sales is a re­minder that trade “de­pends on a lot more than trade pol­icy.”

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