Q: You mentioned during the “Preparing for Meetings with Foreign Buyers” webinar on February 9^th that U.S.  Agricultural exports reached an all-time record high in 2021 and most of the top markets show double digit growth. I am surprised given all the supply chain container shortage issues. How about some more detail.

A: Indeed, you would think with all the transportation and distribution issues it looked like it could easily be a down year. Most of those problems were import related however, and because of the global economic recovery (world GDP growth came in at nearly 6%) and resumption of food service around the world 2021 was a tremendous year for the U.S. The forecast, at least for the “FY” or fiscal 2022 year is for continued growth.

The Results are in

Total U.S. agricultural exports reached a record high $177 billion in 2021, an increase of 18% from that of 2020.  The 2021 total also represents an increase of 15% from the former record high of $154.5 billion which happened in 2014. Back then we attributed a lot of that growth to a weaker dollar, which was not the case in 2021. All three of the bulk, intermediate and consumer oriented or “BICO” aggregates reached record highs in 2021.

Consumer oriented product exports totaled $77.9 billion, growth of 14% and 44% of the agricultural total. Bulk exports from the U.S. reached $65.5 billion, 37% of the agricultural total and growth of 24%. Much of that came from increased crop prices compared to the shipping volume. And intermediate product exports from the U.S. grew 18% to $33.5 billion. The high value-added processed food export aggregate that Food Export works in also set a record high for exports in 2021, totaling $49.2 billion, which was growth of 13% and nearly 28% of the agricultural total.

Top Export Product Categories

Top U.S. consumer food exports included $10.5 billion in beef and products, which grew 38% which is about $3 billion just in growth. Exports of tree nuts totaled $8.8 billion, growth of 6%, $8.1 billion of pork and products, up 5%. $7.6 billion in dairy products, up 19%, $5.8 billion in food preparations, which grew 15%, $5.2 billion in poultry meat and products, up 24%, $4.4 billion in fresh fruit with growth of 4%, $3.6 billion of bakery goods, growth of 1% as well as $2.7 billion in processed vegetables and $2.6 billion in fresh vegetables, which grew 9% and 4% respectively. 

Top U.S. bulk exports included $27.3 billion in soybeans which was up 7% in 2021, $18.7 billion worth of corn which grew a staggering 103%, $7.2 billion in wheat, up 15%, a rare 2021 decrease of 5% of cotton exports at $5.7 billion, and $2 billion of coarse grains which grew a healthy 47%. Exports of rice grew a modest 2% and added up to $1.9 billion.  

Top U.S. intermediate exports included $5.6 billion of soybean meal, growth of 20%, feeds, meals and fodders totaled $3.6 billion, up 13%, distillers grains exports reached nearly $3 billion and were up 29%, exports of non-beverage ethanol grew 21% to $2.7 billion, essential oil exports added up to 2.4 billion and growth of 18%.  Dextrins, peptones, & proteins exports were $1.9 billion, growth of 12%

Top U.S. processed food exports included “Other Processed Foods, Ingredients & Beverage Bases”, which added up to $10.2 billion, growth of 11%. The reason it is described as that and always leads processed food exports is that it is an aggregate of HS 2106.90 which is “miscellaneous food preparations” and includes canned and dried food items not specified elsewhere, drink mixes, fortified juices, sugar free confectionery, baking mixes and doughs, and cream and milk substitutes. The more HS codes added together, the higher the value will be.

Other U.S. processed food exports of note in 2021 included processed/prepared dairy products which totaled $5.7 billion (mostly condensed milk), which grew 21%, alcoholic beverages added up to $3.6 billion and growth of 18%, as distilled spirits, wine and beer all had record high growth, snack foods, up 8% to $3.5 billion, and non-alcoholic beverages up 6% to $3.5 billion, led by corn chips and savory snack foods. And congratulations to our pet food exporters who set yet another record high export value of just over $2 billion for the first time, growth of 20%. Exports of pet food to China increase another 122% thanks to Phase One and the removal of restrictions and non-tariff trade barriers. Pet food exports to China have grown – and this is not a typo – 24,289% since 2014 when they were less than $300,000k. Talk about being shut out of a market? Not any longer. Overall pet food exports are up 58% since 2014.  

Top U.S. Export Markets for Food Products

The top U.S. food markets for the agricultural total had some surprises among them. 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 continued its phenomenal purchasing, importing nearly $33 billion, growth of 25% which equals almost $6.6 billion. As recently as 2006, their entire years of agricultural imports were only $6.7 billion, and now that is just the growth in 2021. Also recall that in at the height of the “trade wars” with China, their imports dropped 53% to only $9.2 billion. Since then, they nearly tripled that value in 2020 at $26.3 billion, and with the 2021 total now have grown an incredible 69%. The Phase One Agreement with the U.S. and China has served U.S. exporters well, especially for meat and meat products. 

Back in 1989, prior to NAFTA, Mexico actually imported more agricultural products from the U.S. than Canada did. Mexico imported $2.7 billion, and Canada imported $2.2 billion. That never happened again until 2021 when Mexico became the #2 market after China and increased imports 30% to $25.5 billion. Mexico now imports over $490 million of U.S. agricultural products per week. U.S. exports of agricultural products grew 7% to Canada and were $25 billion, so for now, Canada is the #3 market.

Japan came in at #4 with 5% growth and $14.2 billion. Rounding out the “Top 10” U.S. export markets, the rest of the countries except for one had double digit growth. That included #5 South Korea with an impressive 34% growth and $9.3 billion, #6 Taiwan with 10% growth at $3.8 billion, #7 Philippines had growth of 23% and $3.5 billion, #8 Vietnam with whopping growth of 50% and $3.4 billion. #9 Colombia had 38% growth and imported $3.2 billion, and finally at #10 Indonesia imported $2.9 billion and grew 1%.

The export growth to Vietnam and Colombia has been especially impressive. If you go back 10 years to 2011 both Egypt and Turkey were in the Top 10, Vietnam was ranked 16^th   with $1.6 billion in imports and Colombia was ranked 26^th with $1.1 billion. Growth since then for Vietnam has been over 10% per year at 109% and that is with no Free Trade Agreement like we have with Colombia. Duties in Vietnam average 20% on a CIF basis. Exports to Colombia have grown 204% in 10 years, so over 20% per year. In 2012 The U.S. Colombia Trade Promotion Agreement (CPTA) entered into force. By 2014 the value of the TPA was quite evident as exports grew 124% to $2.4 billion, and by 2021 they have now grown the most of any top ranked market since 2012 when they reached $3.2 billion, at an incredible 210%. And which is the market with the 2^nd highest growth since 2012? That is Vietnam at 110%.      

Top U.S. Processed Food Export Markets

There is some overlap between consumer-oriented food products and those that are processed. You may have noticed that dairy products were $7.6 billion in dairy products in the consumer-oriented category. Then “processed/prepared dairy products listed as a processed food, totaling $5.7 billion. That number was part of the consumer oriented total but is almost $2 billion less, meaning that amount is not considered high value added “processed/prepared”.

You would think the top agricultural or consumer-oriented markets would also be top processed food markets. That is true to an extent but the ranking changes and more importantly this is where you find the top markets for processed foods. Those countries that have the highest percentage of processed food in the agricultural total are the highest potential for value added food exporters. Some processed foods such as fish and seafood are not agricultural products, so countries that import a lot of seafood may actually import more processed products than consumer, and in some rare cases, even agricultural products.  

Canada is the top U.S. market for processed food exports at $14 billion, growth of 7% from that of 2020. Their agricultural import total was $25 billion which means 56% of their imports were processed. This is what makes Canada a premier food export market. Mexico, ranked #2 as a processed food destination at $7.2 billion, astounding growth of 27%, is about half the size of Canada, and compared to their agricultural total of $25.5 billion that is only 28.2%, indicative of their reliance on bulk and intermediate products as well. Canada does not rely on the U.S. for commodities as they are mostly self-sufficient. Japan is the #3 market at $2.8 billion and growth of 10%, which is less than half of that of Mexico and 20% compared to Canada. Their percentage of the agricultural total though, of $14.2 billion is 20% of their agricultural total.

Korea is the #4 destination for processed foods at $2.4 billion and modest growth of 4%.  That is 25% of the agricultural total. China in this case has dropped to #5 from by far being the largest agricultural export market in total. They imported $2.1 billion in 2021, and like Mexico growth of 27%, which is only 6.3% of the total. Many processed food products have very high duties on them as a result of the “trade wars” to this day, and most of their growth has been in meat products which are not processed. Philippines imported $1.7 billion in 2021; growth of only 3% but their share of processed food imports was 49% which makes them a very attractive market, ranking #6.

Netherlands is #7, growth of 25% (although their agricultural total is down 13%) and they imported $1.1 billion of processed foods in 2021, 38% of their agricultural total. The U.K. is #8 as a U.S. processed food market and their $991 million was 55% of their $1.8 billion agricultural total. They rank 15^th as an agricultural export market and move up to #8 as a processed food market. That is only 1% less than Canada, so an excellent market for food exporters. The U.K. consumer-oriented food export market was $1.1 billion, so over 99% of that total was processed.

Australia makes the “Top 10” as a processed food export market and they are #21 as an agricultural export market which shows their processed share is high and it is at $919 million, 66% of their $1.4 billion total. And finally, Vietnam at #10 as a processed food market imported $801.6 million in 2021, and had growth of 59% which was the highest of any of the top markets. Their share of processed to agricultural total was 23.5% and helped them become a top U.S. export market.   

Of course from this analysis you can drill down much further to the HS/Schedule B level and find out specifically what the markets are importing and what the demand is. For some visual assistance with that process you can watch the recorded webinar “You Can’t Manage What You Can’t Measure: Market Research Using USA Trade Online which is available at www.foodexport.org