Ag Exports in ’23, Part 1: 10% Decline & Long Run Shifts

U.S. ag & related exports totaled $190.7 billion in 2023, down 10% from 2022’s record of $212.9 billion. Given lower commodity prices and China’s general pullback, the downturn doesn’t come as a surprise. That said, it’s essential to consider the factors behind the decline.

Total ag exports

Figure 1 plots the value of U.S. ag and related products exported since 2010. Despite the 10% decline, activity in 2023 was still historically strong and – in nominal terms – outpaced activity before 2021. While the 10% decline is eye-catching, exports posted big gains in 2021 (+19%) and 2022 (+11%). Also, double-digit declines aren’t uncommon as exports dropped 14% in 2009 (not shown) and 11% in 2015.

Figure 1. Value of U.S. Ag Exports, 2010-2023. Data Source: USDA GATS.

Adjusting for inflation, Figure 2 shows U.S. ag exports since the late 1960s. A couple of points stand out. First, history fans will recognize the doubling of exports in the early 1970s (corresponding with the Russian Grain Robbery), followed by a second jump to $150 billion by the decade’s end. Of course, by the mid-1980s, ag exports had collapsed to $77 billion. In just six years, inflation-adjust exports fell by 48%. It wasn’t until 2007 that ag exports bested the 1980 highs.

Second, the value of ag exports in recent years has frequently exceeded $200 billion. In 2014, exports peaked at $220 billion. In 2019, the trade war and low commodity prices reduced exports to just $186 billion. Activity in 2022, at $225 billion, is the highest level observed.

As an aside, the 10% nominal decline in 2023 (Figure 1) was more like a 13.5% decline using inflation-adjusted dollars.

Figure 2. Real Value of U.S. Ag Exports, 1967-2023. 2024=100. Data Source: USDA GATS and Calculations.

U.S. ag exports, by partner

While the specific rankings have shuffled in recent years, Canada, China, and Mexico are the top three destinations for U.S. ag exports (Figure 3). In 2023, the trio represented 49.4% of total ag exports, the highest collective share observed.

These data are also a reminder that these are fairly new trade partners. Canada, China, and Mexico collectively represented less than 20% of activity before 1994. China, which accounted for 19% of trade in 2022, was less than 5% of activity before 2003.

Figure 3. Distribution of U.S. Ag Exports – By Select Partners, 1967-2023. Data Source: USDA GATS and Calculations.

U.S. ag exports, by type

Earlier this year, many headlines noted the U.S. has lost export market share to global competitors. The focus was on bushels of grain exported, which the USDA categorized as “bulk” exports. In recent years, however, the other ag exports categories have been growing the most.

Before the mid-1980s, bulk exports accounted for at least 60% of the value of U.S. ag exports (Figure 4). Since the 1990s, however, bulk has accounted for closer to 30% of activity. At the same time, “Consumer-Oriented” goods – such as meat, dairy, and fruit/nuts/vegetables – have increased from 20% to 40% of activity.

Figure 4. Distribution of U.S. Ag Export – By Type, 1967-2023. Data Source: USDA GATS and Calculations.

Figure 5 shows the inflation-adjust dollars’ worth of U.S. ag exports by type. With these data, it’s clear how strong bulk export activity was during the 1970s. Despite all the soybeans exported to China in recent memory (and corn in 2021 and 2022), bulk exports in the last two decades have failed to top the activity seen in the 1970s. Instead, consumer and intermediate goods have largely driven U.S. export growth.

In other words, part of the story of the U.S. losing bushels of exports (bulk) to other countries has been indirect exports of those bushels as meat or distillers grain as consumer or intermediate goods.

Figure 5. Real Value of U.S. Ag Export – By Type, 1967-2023. Data Source: USDA GATS and Calculations.

Wrapping it up

Top-line ag exports in 2022 were historically high before dipping in 2023. The favorableness of the 2023 condition depends on how many years of data are considered and if nominal or real data are considered.

While China captures much of the attention, Canada and Mexico are also significant trade partners. In 2023, the three countries accounted for nearly half of U.S. ag exports, a level that would have seemed unimaginable just three decades ago.

In addition to shifting trade partners – the U.S. hasn’t exported wheat to Russia in a long time – the composition of ag exports has also shifted. On a dollar basis, consumer-oriented goods captured 42% of export activity in 2023, the largest category. Bulk exports have lost share and inflation-adjusted dollars of activity.

In conclusion, U.S. ag exports remain important to the farm economy, but underlying trends have shifted over the decades.