American farmers have benefited from a weak U.S. dollar which has lead to a strong export market for ag commodities including corn, soybeans, wheat, dairy products and meat, according to USDA Department of Agriculture Deputy Secretary Chuck Conner.
"We can't lose sight on what impact exports are having on the farm sector. We wouldn't have prosperity in agriculture without exports," Connor said.
According to Connor, the USDA is projecting $109 billion in farm exports in 2008. That's up from $89.9 billion in 2007 and $70.9 billion in 2006. USDA figures indicate farm exports from January to June 2008 have risen 47.7% over farm exports between the same period in 2007.
"Agriculture is benefiting from a low-valued dollar," he continued. "Not every segment of the economy benefits from a cheap dollar, but it is helping agriculture."
Conner spoke to a group of 150 National Farmers Union members at the USDA offices in Washington, D.C., on Monday. The farmers are in Washington this week attending their group's national annual fly-in.
The USDA deputy secretary said the farm sector is helping boost the overall U.S. economy largely due to exports.
"We had a 3.3% growth in our economy the last quarter," Conner said. "About 40% of that is due to exports, and a lot of those exports are coming from agriculture."
Wisconsin Farmers Union President Sue Beitlich, cautions that while the value of farm exports has risen sharply during the past year, the quantity of exports has not risen sharply.
"Just a few years ago, we were importing more commodities than we were exporting and now with the weakening dollar, our products are more desirable and affordable throughout the world," says Sue Beitlich, president of the Wisconsin Farmers Union. "As a result, export dollars have increased. But while the dollar value of commodities is up appreciably, the quantity has not changed much."
Farm imports are also on the rise. According to the USDA, farm imports in 2008 have increased 13.3% over 2007.
Near-record corn crop
Despite flooding in June across much of the Corn Belt and a 17% increase in the number of acres planted to soybeans this year, Conner said farmers will harvest a large corn crop this fall.
"With all of our exports and our domestic needs for corn, we needed a big corn crop," Connor said. "We saw a substantial shift this year from corn to soybeans. But our information shows we are going to have a great crop. Once again the American farmer is going to deliver. We're anticipating the second largest corn crop in history, despite some horrible growing conditions this year."
Tight corn supplies in 2008 will lead to more of the same in 2009, USDA Chief Economist Joe Glauber told the farm group.
"Next year, we're again going to be watching a tight situation," Glauber said. "In terms of existing supplies, we're looking at a similar situation in 2009. That's going to require additional corn acreage to meet our corn needs for ethanol, feed and exports."