Effect of Japanese earthquake on U.S. agricultural imports mixed
Intermediate to long-term impacts of the Japanese earthquake likely will result in more U.S. exports to Japan as the country rebuilds critical infrastructure and resumes food production, according to a Texas AgriLife Extension Service economist.
The Japanese earthquake could have a large effect on U.S. grain and beef exports, but likely will have only a minor effect -- if any -- on cotton prices, according to Texas AgriLife Extension Service economists.
“Japan is a major buyer of grain from the United States,” said Dr. Mark Welch, AgriLife Extension grain marketing economist. “They buy a lot of wheat; they are our No. 1 buyer of corn, and we are a major contributor to their livestock industry. They are a big, big, customer.”
However, if there is good news, it’s the major port facilities in the southern part of Japan may have escaped the worst of the damage, Welch said.
“If those facilities are still intact -- in terms of just the logistics of getting in grain and other food supplies -- it does not appear at this point that it’s going to be a severe (long-term) limitation,” Welch said. “We’re still trying to get information, but port facilities will be a key factor.”
Meanwhile, there has been little effect on markets, he said.
“Originally, there was not a huge response,” Welch said. “Yesterday [March 15], we were actually a little stronger in the grains. However, today we seem to be seeing a lot of investors pulling out commodities, equities, and other financial instruments on a broad-based level -- it seems to be so across the board.”
Welch said producers were already beginning to see some retracement (pull-back on prices) in grains.
“Which is to be expected,” he said. “Such things happen all the time.”
But supplies for most grains are tight, including corn and soybeans, particularly so for corn worldwide. Wheat prices soared after the drought in Russia last summer cut world wheat supplies. Prices from now until harvest will be driven by moisture and crop prospects in the United States, Russia, and other major exporting countries, Welch said.
As for cotton, Japan used to be a major textile producer, and U.S. producers used to export a lot of cotton to them, said Dr. John Robinson, AgriLife Extension cotton marketing economist.
However, Japan is a major manufacturer of other goods, and there is likely to be a large ripple effect on the world economy, he said.
But the effects likely will be more on manufactured goods than agricultural, Robinson said.
And the long-term impacts on U.S. exports will be different from the short-term, said Dr. Parr Rosson, AgriLife Extension agricultural economist specializing in international trade and marketing.
“Near-term impacts will disrupt trade flows to and from Japan, resulting in lower U.S. exports of grains and oilseeds,” Rosson said. “Intermediate to long-term impacts will likely result in more U.S. exports as Japan rebuilds critical infrastructure and resumes food production.”
AgriLife Extension district reporters compiled the following summaries:
AgriLife Extension district reporters for the Southwest District, including Wilson, Gonzales, Guadalupe, and Bexar counties, reported the region remained very dry. Total cumulative rainfall since Aug. 1, as measured in Uvalde, was about 7 inches below the long-term average for the same period. High winds further dried out soils and grasses, and increased the incidence of roadside fires. Wildlife road-kill increased as more wildlife sought grazing along roadsides, usually at night. Irrigated corn and sorghum fields were planted, with some corn already emerged. Dryland crops will need rain very soon. Growers expected to start planting cantaloupes and watermelons soon. Despite the warmer weather, pastures and rangeland grasses remained dormant, most likely because of the lack of moisture. Forage availability was below average. Ranchers were busy caring for recently born calves, lambs, and kids.
AgriLife Extension district reporters for the Coastal Bend District, including Karnes County, reported dry conditions persisted; soil-moisture levels were short. Farmers were planting corn. In the southernmost part of the district, producers were planting grain sorghum and cotton, even though soil moisture at the planting depth was disappearing. Some farmers delayed planting to wait for rain. Livestock producers continue to supplement cattle with hay and protein.
Compiled from Texas A&M University and Texas AgriLife Extension Service reports.