Coronavirus agriculture

A ship docks at United Grain Corporation in the Port of Vancouver on the Columbia River. The export terminal reopened July 1 after being shut down for five days after two workers tested positive for COVID-19.

The value of U.S. farm goods exported from Washington ports declined by 21.3% through the first three months of 2020 compared to the previous year, one of many ways the coronavirus has slowed the economy, the state Economic and Revenue Forecast Council reported Tuesday.

The council's director and chief economist, Steve Lerch, attributed the drop in agricultural exports to lingering trade disputes and reduced demand for agricultural products in the wake of the global pandemic.

"We've had, essentially, trade conflicts with China, which is Washington's biggest export market for a number of products, including a lot of agricultural products," he said. "The pandemic has reduced the demand for U.S. exports in China and in other countries, so I think those are both things that would play into that."

The economic report documented record unemployment and lower incomes in Washington over the past three months. For state lawmakers, the outlook on the private-sector economy foreshadowed a gap between tax revenue and government spending plans.

The state tentatively projects a $4.1 billion revenue shortfall over three years. Lerch will present a revenue forecast on June 17 that will give lawmakers their first official number to hang on the deficit.

The lead Republican on the Senate budget committee, John Braun of Centralia, said the economic report should motivate lawmakers to act quickly in a special session to cut spending.

"The sooner we stop digging, as they say, the easier it will be to put all this together later in the year or next year in the regular session," he said.

From January to March, the value of U.S. farm goods exported from Washington totaled less than $2.3 billion, compared to more than $2.9 billion last year, according to the World Institute for Strategic Economic Research, a data and analytics company the state relies on for its economic outlook.

The values of four of the five top farm products exported through Washington were down compared to the same period in 2019. Declining exports largely reflected global events, affecting commodities shipped from Washington but not necessarily grown in the state.

Soybean exports were down 45%; corn was down 43%; flour, meal of oil and olives were all down 20%; and fresh apples, pears and quinces were down 11%. The only category in the top five with a higher export value compared to last year was wheat and meslin, a mixture of wheat and rye, which were up 35%.

The USDA on Friday projected that U.S. farm exports will total $136.5 billion in the federal fiscal year ending Sept. 30. The forecast was $3 billion lower than USDA's projection in February. If accurate, 2020 exports would still surpass 2019, when $135.5 billion worth of farm goods were exported.

USDA lowered by $1 billion to $13 billion expected farm exports to China. The agency attributed much to the decline to China buying more soybeans from Brazil, spurred by a weak Brazilian currency.

The fiscal year forecast for wheat exports was revised downward by $300 million to $6.1 billion as "larger global supplies and uncompetitive U.S. pricing reduce prospective volume," according to the USDA.

A big harvest and weak domestic demand for ethanol are expected to drive down corn prices and export income by $500 million, the USDA projected.

The pandemic has reduced foreign demand for cotton, reducing projected exports by $1 billion, according to the USDA.

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