U.S. agricultural exports for fiscal year 2011 will reach $135.5 billion by Sept. 30, breaking the U.S. one-year record by $20.6 billion, the Agriculture Department said Thursday at its annual Agricultural Outlook Forum.

USDA chief economist Joe Glauber also announced that China is expected to succeed Canada as the country’s No. 1 export destination in fiscal year 2011, which ends September 30. China is taking $20 billion in exports while Canada is taking $18.5 billion. Glauber said 60 percent of U.S. soybean exports, 40 percent of cotton exports and 20 percent vegetable oil exports are going to China this year.

Food inflation, which has been low since the recession, is expected to rise, he said. The current high commodity prices should be viewed in the light of 60 years of declining real commodity prices due to productivity increases, he said.

“In the short run, much uncertainty remains and with tight markets, price volatility is expected for most markets,” Glauber concluded. “Whether the current period marks a turning point will depend largely on whether over the long run productivity gains will continue to offset the growth in demand caused by rising population and income.”