Author’s Note: The U.S. Census Bureau in collaboration with USDA’s Foreign Agricultural Service released the latest agricultural export data to FAS’ online Global Agricultural Trade System platform this morning, compiling total calendar year estimates for 2021 agricultural trade. There is a lot to unpack from this latest data update, but we’ve cherry picked the highlights for you. Enjoy!

U.S. agricultural exports soared to a record-breaking $177 billion during the 2021 calendar year, besting the previous record of nearly $155 billion set in 2014. It represented an increase of 18% from 2020 export sales receipts on soaring commodity prices and robust international food and feed demand.

“Worldwide exports of many U.S. products, including soybeans, corn, beef, pork, dairy, distillers grains and pet food, also reached all-time highs,” in 2021, according to USDA.

Grain and feed export sales soared 41% higher in 2021 to $43.5 billion as corn export receipts more than doubled on the heels of a four-fold increase in Chinese purchases and competing demand from Mexico and Japan. It was the first time on record that the value of grain and feed exports exceeded that of oilseeds.

But on an individual product basis, soybeans continue to reign supreme. Soybeans were at the top of the international shopping list in 2021, with 1.9 billion U.S. soy bushels worth $27.4 billion sold last year. Soybean shipping volumes trailed 2020’s record of nearly 2.4 billion bushels but the $27.4 billion sales receipt bested 2012’s haul of $24.8 billion as the highest on record.

Corn export volumes rose by over a third from 2020 to a record-breaking 2.7 billion bushels. The haul was worth $18.7 billion, more than doubling the value of 2020 corn exports over the course of the year. It was the largest value of corn exports since the prior record of $13.7 billion was set in 2011.

China – the no. 1 U.S. ag export buyer

According to a statement accompanying the data release from USDA this morning, “the United States’ top 10 export markets all saw gains in 2021, with six of the 10 – China, Mexico, Canada, South Korea, the Philippines and Colombia – setting new records.”

China snapped up a record $33 billion of total U.S. ag sales in 2021, besting last year’s purchases by $6.6 billion, to record a second consecutive year as the top destination for U.S. agricultural shipments. China unseated Canada last year as the top buyer of U.S. ag products. Mexico ($26B) and Canada ($25B) were the second and third, respectively, largest buyers of U.S. ag exports in 2021.

Unsurprisingly, China was the top destination for U.S. soybeans in 2021. China’s soy purchases of 1.00 billion bushels of U.S. soy in the 2021 calendar year was actually a 20% decline in annual soybean export volumes from the 1.26 billion bushels shipped in 2020.

However, China paid over $14.1 billion for U.S. soybean purchases last year, a $24-million increase from 2020 soybean sales.

China increased its investment in U.S. corn in 2021, booking 2.7 times 2020 corn volumes in 2021 for a total of 741 million bushels worth $5.1 billion. During the year, China’s corn purchases surpassed 2020 values by an eye-popping $3.9 billion (+316%).

Phase 1 trade comparisons

It is impossible to not reconcile these figures against Phase 1 trade agreement volumes. The trade deal, ratified with China in January 2020, expired at the beginning of 2021 largely unnoticed. China has increased its domestic grain supplies as diplomatic relations between the U.S. and China remain murky at best, deteriorating at worst.

The 2020 agreement stipulates that Chinese purchases of U.S. ag goods would be $12.5 billion over the 2017 baseline in 2020 and $19.5 billion over the same benchmark in 2021. China purchased $24 billion of U.S. ag products in 2017, placing the 2020 target at $36.5 billion and 2021 goal at $43.5 billion.

Other interpretations of the Phase 1 text specify that a total of $80 billion in Chinese purchases of U.S. ag products would be made over the next two years, for an average of $40 billion in purchases per year following the agreement’s nullification. The interpretations, timing stipulations and enforcement of the Phase 1 deal have been unclear from the get-go.

China bought $26.4 billion worth of U.S. ag products in 2020 and now $33.0 billion in 2021, totaling $59.4 billion over the past two years. By any metric, China’s purchases of U.S. ag exports fall short of Phase 1 goals. In fact, the purchases miss the $80 billion cumulative mark by 26%.

High commodity prices in 2021 helped stave off a larger deficit over the past two years. But U.S. farmers, traders and government officials are seemingly at an impasse with how to handle trade matters with China going forward, especially as global tensions between the world’s two largest economies continue to mount following the U.S.’s diplomatic boycott of the ongoing Beijing Winter Olympics.

"Because we inherited this deal, we engaged the (People's Republic of China) on its purchase commitment shortfalls, both to fight for U.S. farmers, ranchers and manufacturers and give China the opportunity to follow through on its commitments. But our patience is wearing thin," an unnamed U.S. official told Reuters over the weekend.

It seems likely that China will complete its domestic stockpiling plans this year while simultaneously increasing crop acreage for the 2022/23 marketing campaign. While domestic livestock feed usage will remain high in China, the likelihood of another year of high grain import volumes into China seems less likely in 2022 than in 2021 based on current stock volumes as well as these factors.

And if diplomatic relations between the U.S. and China continue to deteriorate, those purchases could dry up much more quickly.

"For the specific problems which emerge in economic and trade relations between the two countries, both sides should appropriately solve them in the spirit of mutual respect, equality and consultation," Zhao Lijian, a spokesman for China's foreign ministry, said in a news conference in Beijing on Sunday evening.

Tomorrow’s WASDE reports and next week’s 2022/23 export estimates at USDA’s annual Agricultural Outlook Forum will provide more insight into if Chinese demand for U.S. grains and oilseeds will fall in the coming months.

Other highlights: Ethanol ends year mixed

Despite a resurgence in domestic ethanol production in the latter half of 2021, annual ethanol export volumes slipped 5% from 2020 to 4.7 billion liters. It marked the third consecutive year of smaller ethanol export volumes.

Thankfully, higher fuel prices offset the smaller shipping volumes of the fuel additive. Total ethanol export values rise nearly 21% from last year to $2.8 million in 2021.

Other highlights: Soybeans – December 2021 volumes

Soybean export volumes tapered off in December 2021, falling by nearly a quarter from month prior volumes to 298 million bushels. The total value of December 2021 soybean exports fell accordingly, settling at $4.24 billion after notching a record-setting $5.5 billion in November 2021.

Falling shipment volumes to China was the chief driver of the smaller soybean shipments for the final month of 2021, purchasing nearly 3 billion fewer bushels in December 2021 than the prior month as Chinese buyers awaited the early harvest of Brazil’s soybean crop, which began around Christmastime.

Other highlights: Corn – December 2021 volumes

Corn export volumes rose 8% from the previous in December 2021 to 196 million bushels, fueled in large part by increased shipments to China, Japan and Canada. The sales volume totaled $1.34 billion, marking the highest monthly gross export revenue value for corn since peak export season ended last July.

Corn export volumes have been particularly robust despite lower purchase volumes from China. Droughts last summer in Canada and Mexico have increased local needs for the feedstuff and thus propelled corn export volumes to unseasonal highs this past fall.

Other highlights: Wheat – December 2021 volumes

High wheat prices and strong global wheat cravings during December 2021 helped offset lower U.S. export volumes. For the month, wheat export shipments drifted 6% lower from November 2021 to 49 million bushels.

But wheat export values did not suffer as severe a decline as volumes because prices rallied to multi-year highs during the reporting period. December 2021 wheat export revenues cashed in at $524 million, down 0.3% from the prior month.