USDA Explores Ag Market in China

The USDA recently released an analysis of the agricultural market in China that illustrates the potential and perils of the relationship.

Over the past two decades, China’s prosperity and increased consumer demand has contributed to record growth in U.S. agricultural exports. From fiscal years 2000 to 2015, the value of U.S. agricultural and related exports to China rose from $1.7 to $25.9 billion dollars, the USDA reported. Today, nearly 17% of all U.S. agricultural exports are destined for the Chinese market.

However, China’s economic slowdown, subsequent reforms, and recent decline in U.S. exports to China have raised legitimate concerns among agricultural stakeholders about the potential impact on the U.S.

China’s Gross Domestic Product (GDP) growth is projected to drop to 6.1% in 2016, its lowest level since 1990. Moreover, China is pursuing a variety of economic and regulatory policies that promote agricultural self-sufficiency and protect domestic industries. And, a majority of U.S. agricultural exporters have experienced severe decreases in sales to the region over the last year. Farm exports to China for the 2015 fiscal year are down approximately $4 billion, or 13%, compared to 2014. They are expected to drop further in 2016.

Collectively, these events have created uncertainty within the global agricultural marketplace. The USDA will focus on this topic during its 2016 Agricultural Outlook Forum in Arlington, Va., in February. S