Major U.S. Agricultural Export Markets: China, Canada, and ...

Economics Report

Farm Credit Administration

Office of Regulatory Policy Agricultural and Economic Policy Team

March 26, 2018

Summary

U.S. agricultural exports totaled $138.4 billion in 2017. The top three markets were Canada ($20.5 billion), China ($19.6 billion), and Mexico ($18.6 billion). With a combined export value for the three countries equal to 16 percent of U.S. cash receipts (farm value), demand in these markets directly affects U.S. farm income.

Much of agricultural trade news in recent months involves these three countries. The agricultural community continues to express significant concerns over potential trade policy changes that could dampen U.S. exports or weaken ties with major U.S. markets.

China is a major market for U.S. agricultural products because each year it buys more than $10 billion of U.S. soybeans. China accounts for more than one-half of total U.S. soybean exports. Canada is a more diversified market than China because no single product dominates agricultural exports to Canada. Another difference is the consumerready nature of export flows--the top categories are prepared food, fresh vegetables, fresh fruit, and snack foods. For Mexico, the distinctive feature is that the United States ships a wide variety of bulk commodities (corn, soybeans, and wheat) and animal products (pork and dairy). In 2017, Mexico accounted for half of U.S. corn exports and between one-fifth to one-quarter of U.S. pork, dairy, and poultry exports.

Author Dennis A. Shields, Senior Economist, (703) 883-4056

Farm Credit Administration

Major U.S. Agricultural Export Markets: China, Canada, and Mexico

Much of the recent agricultural trade news involves China and the North American Free Trade Agreement countries of Canada and Mexico. These countries are the top three markets for U.S. agricultural products, accounting for a combined 42 percent of total agricultural exports. Each market received about $20 billion in products in 2017 (figure 1).

The agricultural community continues to express significant concerns over potential trade policy changes that could dampen U.S. agricultural exports or weaken ties with major U.S. markets. Potential impacts depend on the commodities exported to these markets, their shares of overall exports, and exports relative to U.S. production (as measured by cash receipts).

This report provides a graphical profile of U.S. exports to the top three markets using data from USDA's Foreign Agricultural Service and Economic Research Service.

Figure 1. Top U.S. agricultural exports markets are China, Canada and Mexico

2017 = $138.4 billion

China, $19.6

Other, $79.7

Canada, $20.5

Mexico, $18.6

$ bil.

2013 2014 2015 2016

160 140 120 100

80 60 40 20

0

China Canada Mexico Other

Source: FCA-ORP using USDA/FAS data,

.

2017 World

1

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China buys mostly soybeans from the United States

China is a major market for U.S. agricultural products because each year it buys more than $10 billion of U.S. soybeans. China's purchases represent more than one-half of total U.S. soybean exports. All other commodities categories are $1 billion or less. Other major commodities include cotton, hides and skins, sorghum, pork, and dairy products. For each of these commodities, China accounts for 10 percent or more of total U.S. exports.

Relative to a measure of U.S. farm production, the agricultural export value to China is equal to 5 percent of U.S. cash receipts (farm value). For individual commodities, the export-cash receipt ratio for soybeans is 29 percent, while the ratio is 51 percent for sorghum, making China a particularly important market for these crops.

Figure 2. U.S. agricultural exports to China in calendar 2017

Other Distillers Grains

Wine & Beer Processed Vegetables

Planting Seeds Processed Fruit Prepared Food

Corn Tobacco Fresh Fruit Tree Nuts Other Feeds/Fodders

Hay Wheat Other Intermed. Prod. Dairy Products Pork & Pork Products Coarse Grains (excl. corn) Hides & Skins Cotton Soybeans

0.4 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2

0.2 0.3 0.3 0.3 0.4

0.6 0.7

0.8 0.9 1.0

0

2

4

6

8

$ bil.

12.4

10

12

14

Hides Coarse Grains ?

All

Soybeans Cotton

&

sorghum

Pork Dairy Wheat Hay

Skins (excludes corn)

China's share of U.S. exports

14%

57%

17% 50%

78%

10% 11%

6%

27%

U.S. exports to

China / U.S.

5%

farm receipts

29%

22%

Not avail.

51%

4%

2%

4%

5%

Source: FCA-ORP using USDA/FAS data for 2017 exports and USDA/ERS data for 2016 cash receipts.

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Canada buys prepared foods and many other U.S. agricultural products

Canada is a much more diversified market than China because no single product dominates U.S. agricultural exports to Canada. Another difference is the consumer-ready nature of export flows. The top categories are prepared food, fresh vegetables, fresh fruit, snack foods, and non-alcoholic beverages (excluding juices). The United States is highly dependent on exports to Canada, which in 2017 accounted for one-third to one-half of total U.S. exports of its top commodities.

Relative to a measure of U.S. farm production, the agricultural export value to Canada is equal to 6 percent of U.S. cash receipts. The export-cash receipt ratio for pork is 4 percent, while the ratio is 1 percent for beef.

Figure 3. U.S. agricultural exports to Canada in calendar 2017

Other Sugar, Sweeteners, Bev. Bases

Fruit & Vegetable Juices Breakfast Cereals

Poultry Meat & Prods. (excl. eggs) Processed Fruit Wine & Beer

Processed Vegetables Dairy Products

Dog & Cat Food Tree Nuts

Condiments & Sauces Chocolate & Cocoa Products

Pork & Pork Products Beef & Beef Products Non-Alcoholic Bev. (excl. juices) Other Intermediate Products

Snack Foods Fresh Fruit

Fresh Vegetables Prepared Food

0

0.4 0.4 0.4 0.5

0.5 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.8 0.8

1.1 1.2 1.3

1.6 1.9 1.9

0.5

1

1.5

2

2.5

$ bil.

3.2

3

3.5

Prepared

Fresh

Fresh Snack

Non-

Beef &

Pork & Pork

All

Food

Vegetables

Fruit

Foods

Alcoholic Beverages

Beef Products

Products

Canada's share of U.S. exports

15%

32%

75%

34% 51%

54%

11%

12%

U.S. exports to Canada / U.S. farm 6%

Not avail.

Not avail.

Not

Not

avail. avail.

Not avail.

1%

4%

receipts

Source: FCA-ORP using USDA/FAS data for 2017 exports and USDA/ERS data for 2016 cash receipts.

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Mexico buys U.S. corn, soybeans, pork, and dairy products

Compared with China and Canada, the distinctive feature of trade with Mexico is that the United States ships a wide variety of bulk commodities (corn, soybeans, and wheat) and animal products (pork, dairy, beef, and poultry). U.S. exports of each of these products totaled $0.9 billion or more in 2017. Mexico is major U.S. market for these products, accounting for nearly a third of U.S. corn exports and between one-fifth to one-quarter of pork, dairy, and poultry exports.

Relative to a measure of U.S. farm production, the agricultural export value to Mexico is equal to 5 percent of U.S. cash receipts. The export-cash receipt ratio is 10 percent for wheat, 8 percent for pork, and 6 percent for corn.

Figure 4. U.S. agricultural exports to Mexico in calendar 2017

Other Chocolate & Cocoa Products

Tree Nuts Planting Seeds

Rice Snack Foods Processed Vegetables Distillers Grains

Cotton Fresh Fruit Soybean Meal Sugar, Sweeteners, Bev. Bases Prepared Food

Wheat Poultry Meat & Prods. (excl. eggs)

Beef & Beef Products Other Intermediate Products

Dairy Products Pork & Pork Products

Soybeans Corn

0

0.2 0.3 0.3 0.3 0.3

0.3 0.4 0.4 0.6 0.6 0.7 0.7 0.9 0.9 1.0 1.1 1.3 1.5 1.6

0.5

1

1.5

2

$ bil.

2.8

2.6

2.5

3

All

Corn

Soybeans

Pork & Pork

Products

Dairy Products

Beef & Beef

Products

Poultry Meat

Mexico's share 13% 29%

7%

of U.S. exports

23%

24%

13%

22%

Wheat 14%

U.S. exports to

Mexico / U.S.

5%

6%

4%

farm receipts

8%

4%

2%

3%

10%

Source: FCA-ORP using USDA/FAS data for 2017 exports and USDA/ERS data for 2016 cash receipts.

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