Record ag trade deficit on course to be halved in five years

The U.S. agricultural trade deficit, forecast at a record $30.5 billion this fiscal year, will narrow in the near term as exchange rates improve and trading partners gain economic strength, said the Agriculture Department in its 10-year agricultural baseline. The deficit will would shrink to $14.7 billion in 2028 and hold steady after that.

“Ongoing trends, such as growing domestic demand for both high-value agricultural goods and year-round availability of produce, are expected to continue to bolster imports to the United States,” said USDA analysts. “Due to the relative strength of the current U.S. economy, the trade deficit is expected to be largest in 2024 at $30.5 billion and then narrow as conditions, such as moderating exchange rates, facilitate the slowing of imports.”

After years of surpluses, accompanied by proclamations that the United States was feeding the world, food and ag trade has posted a deficit in four of the past five years. The deficit is forecast to surge to $30.5 billion this year, fall to $25.6 billion in fiscal 2025, and then taper to $14.7 billion in 2028, with deficits continuing through 2033.

“Though a measure of interest to many, the agricultural trade balance ignores several important issues,” said the USDA. “These include increased access to products not adequately produced in the United States, such as tropical products, and perishable products provided in the off-season. Further, trade allows access to lower-cost processed foods and specialty high-value products.”

Some 64% of U.S. food and ag imports are horticultural products, such as fruits, vegetables, wine, malt beer and distilled spirits, and sugar and tropical products, such as coffee and cocoa. Those imports are forecast to be worth $127.8 billion this year. The same categories for U.S. exports would total $46 billion.