Ag trade deficit continues to soar as food imports grow
The U.S. is importing more food than ever, while exports of traditional crops such as soybeans and wheat are losing ground to global competitors, contributing to a negative trade deficit.
According to the U.S. Department of Agriculture (USDA), between Fiscal Years (FY) 2013-23, U.S. agricultural exports expanded at a compound annual growth rate of 2.1 percent.
During the same period, U.S. agricultural imports experienced a notable increase of 5.8 percent.
This growth in demand for imports can largely be attributed to the strong U.S. dollar and consumers’ preferences for a variety of produce available year-round.
Consequently, the agricultural trade balance has reflected some challenges, as it has been negative three out of the last 10 fiscal years.
Deficit may continue
Most recently, USDA released its trade outlook report, noting inbound shipments of everything from avocados to coffee are expected to drive the country’s agriculture trade deficit to a record $49 billion in 2025, and at the same time, U.S. staple crops have been trailing overseas markets over the past decades.
On Feb. 27, Northwest Horticultural Council President Mark Powers voiced concern at the 2025 USDA Outlook Forum, stating, “What we’re seeing is not reassuring when it comes to increasing our reliance on a small number of markets.”
During his presentation, he adds, “We’re in a nongrowth mode because our growers are under such duress and financial constraints.”
In response, the USDA’s February 2025 U.S. Agricultural Trade Outlook reports U.S. agricultural exports in FY25 are projected at $170.5 billion, up $500 million from the November 2024 forecast, as higher grain and feed exports offset reductions to the oilseed outlook.
“U.S. agricultural imports in FY25 are forecast at $219.5 billion, an increase of $4 billion from the November 2024 projection which is largely driven by higher import values of horticultural products, as well as sugar and tropical products,” the report reads.
Explanation
The USDA report notes grain and feed exports are projected at $37.7 billion, up $1.2 billion from November 2024, influenced by higher corn exports which increased $1.4 billion on higher volumes and unit values.
“Along with higher feed and fodder exports, these increases more than offset moderately lower wheat, sorghum and rice exports,” the USDA states. “Oilseed and product exports are forecast at $32.4 billion, a $1.1 billion reduction from the previous quarter, primarily due to lower soybean unit values resulting from strong South American competition.”
It’s been reported cotton exports are forecast down $200 million to $4.1 billion on lower volumes, as exports of livestock, poultry and dairy are forecast up $400 million to $39.7 billion on increases to beef and dairy products.
Horticultural product exports remain steady at $41.7 billion, as ethanol exports are projected to be $4.2 billion, unchanged from the November 2024 forecast, as increased volumes compensate for lower export unit values.
Mexico is anticipated to maintain its status as the leading market for U.S. agricultural exports, with a remarkable forecast of $30.2 billion.
This marks an increase of $300 million from earlier projections, attributed to robust sales in dairy, wheat and various other products during the first quarter.
USDA adds, “Exports to Canada are forecast down $800 million to $28.4 billion due to weaker-than-expected shipments to date, while exports to China are cut by $1.3 billion to $22 billion, largely due to reduced prospects for U.S. soybeans, grains and cotton.”
Export details
The USDA further reports corn exports are projected to reach $13.8 billion, fueled by robust sales and shipments so far this year.
However, an anticipated downward revision in U.S. corn production for January 2025, combined with strong domestic demand, has significantly boosted corn prices.
“Sorghum exports are forecast at $1 billion, down $200 million from November 2024 on lower volumes and unit values as demand from China has been weak, while wheat exports are forecast at $5.8 billion, down $100 million from the previous forecast,” reads the report. “Rice exports are forecast down $200 million to $2.1 billion on weaker sales to markets in Latin America.”
Soybean meal and cotton exports are both forecast down $100 million for FY25 from the November 2024 report.
On a positive note, beef exports are up $300 million to $9.1 billion on higher volumes and increased unit values, while dairy is forecast up $100 million to $8.5 billion on increased price competitiveness for U.S. exports of cheese and butter, with especially strong demand for those products in North America, South America, the Middle East and North Africa.
USDA announces, “Pork exports are raised $100 million to $7.6 billion as continued strong demand in Mexico and Central America supports U.S. exports, and poultry products are unchanged at $6.8 billion.”
Broiler meat exports are expected to rise by $100 million, as increased prices more than compensate for reduced volumes.
However, this increase is offset by declines in turkey meat, other poultry products and eggs and egg products.
The report notes beef and pork variety meats remain unchanged at $2.2 billion, as higher pork variety meat exports help offset lower beef variety meat exports.
Additionally, hides and skins are forecasted to be virtually unchanged.
Import details
According to the latest USDA report, U.S. horticultural product imports are forecast $2 billion higher than the previous quarter at $107.6 billion, a six percent increase over FY24.
The largest component of the horticultural imports category – fresh fruits – are up by $800 million.
“For example, avocado imports from Mexico, the largest commodity in terms of import volume, are expected to increase on strong demand and improved growing conditions,” states USDA.
The FY25 forecast for processed fruits has been revised upward by $600 million, bringing the total estimate to $9.7 billion.
Within this category, fruit juices, which are the largest segment, have been adjusted upward by $400 million, reaching a total forecast of $4.2 billion. This 16 percent increase over FY24 is mostly associated with continued high prices, especially for orange juice.
The report continues, “FY25 livestock, poultry and dairy imports are forecast $200 million higher to $30.5 billion amid higher imports of beef, poultry and dairy products.”
Beef imports are projected to increase by $700 million, reaching a total of $12 billion, primarily due to tight domestic supplies.
In contrast, live cattle imports are expected to decrease by $700 million, bringing the total down to $2.3 billion, which is attributed to lower volumes resulting from the protocols imposed on cattle imported from Mexico.
In the pork market, pork imports are projected to decrease by $100 million, as lower volumes are expected to outweigh marginally higher unit values, and live swine imports remain unchanged due to continued strong U.S. demand for live hogs.
Sugar and tropical products import values are projected at $32.7 billion for FY25, up $1.7 billion from the previous quarter and 12 percent higher than FY24.
The FY25 grains and feed import value is adjusted upward from the previous report by $300 million to $24.2 billion, and the oilseeds and products import forecast is adjusted down by $100 million, three percent above the FY24 value.
Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
