The fact that the United States is in recession was officially announced this week. Also there was a very, very sharp decline in our export forecast according to Agriculture Department Outlook Board Chairman Gerry Bange.
Three months ago the board was predicting U.S. agricultural exports for the new 2009 fiscal year to be huge at $113 billion, but it has been slashed to $98.5 billion: the first yearly decline for U.S. ag exports in 10 years.
"First off prospects continued in the global economic downturn, which I think we can safely call a recession at this point," Bange says. "Clearly this is not only affecting the U.S. but is affecting economies globally. On the basis of that we've got weaker falling demand and we've had a precipitous decline in prices. Then on top of all of that we've got a stronger dollar."
Another issue is the much bigger crops of feed quality wheat around the world, which Bange says means our course grain exports have strong competition from elsewhere in the world, leading to a big decline in U.S. ag sales to other countries.