Ag Trade Deficit Hit Another Record High in July

By Ryan Hanrahan

Bloomberg’s Gerson Freitas Jr. reported that “the U.S. agricultural trade deficit widened further in July, highlighting the challenge facing President Donald Trump as he vows to reverse the trend.”

“Agricultural exports lagged imports by $4.97 billion in July, a gap 9% wider than a year earlier and the largest on record for the month,” Freitas Jr. reported. “That pushed the sector’s deficit to an unprecedented $33.6 billion for the first seven months of the year, according to data released Monday by the U.S. Department of Agriculture.”

“The widening farm trade gap this year has been mostly driven by a jump in imports, just as Trump slapped tariffs on other countries in a push to shrink the overall deficit,” Freitas Jr. reported. “That further cements a shift that has been building since the president’s first term, with a sector that has long run major trade surpluses becoming a consistent net importer.”

“The change in fortunes comes as a result of limited capacity to expand crop and livestock production, increased competition overseas and Americans’ growing appetite for imported goods,” Freitas Jr reported. “Trump’s trade wars have also played a role, pushing China — the world’s largest crop importer — to rely more heavily on Brazil for its supplies. The U.S. is also processing more of its crops domestically to produce biofuel, reducing exportable surpluses.”

“The U.S. imported more than $132 billion in agricultural goods in the first seven months of 2025, almost 8% more than a year earlier,” Freitas Jr. reported. “Meanwhile, the sector’s exports slid 1.3% to $98.8 billion, according to USDA data.”

2025, 2026 Ag Trade Deficits Revised Downward Slightly

Agri-Pulse’s Philip Brasher reported at the end of August that “USDA’s quarterly trade outlook lowered the projected trade deficit for fiscal 2025 to $47 billion from the $49.5 billion estimated in June. The deficit is projected to drop to $41.5 billion for fiscal 2026, which starts Oct. 1, because U.S. ag imports are expected to fall even more than exports.”

“The estimated deficit for FY26 would still be higher than FY24’s $32 billion,” Brasher reported. “USDA raised its estimate for FY25 exports from $170.5 billion to $173 billion, but projected them to decline to $169 billion for FY26. Imports are projected to drop from $220 billion this year to $210.5 billion in FY26. Soybean exports are expected to drop from $21.5 billion in FY25 to $18.3 billion for FY26, down from $24.2 billion in FY24.”

“Soybean growers are being especially hard hit by Trump’s simmering trade war with China; the Chinese have yet to put in an order for this fall’s soybean crop,” Brasher reported. “ERS projects U.S. ag exports to China will drop from $17 billion in FY25 to $9 billion in FY26. As recently as FY24, China imported $25.7 billion worth of U.S. ag commodities.”

Lack of Soybean Sales to China Still Hurting Export Numbers

Fortune’s Dave Smith reported that “American soybean farmers are heading into harvest season without a single order from China, historically their largest customer, raising alarm bells about the agricultural sector’s stability and broader implications for the U.S. economy.”

“Caleb Ragland, president of the American Soybean Association and a ninth-generation farmer from Kentucky, issued a stark warning about the crisis facing the nation’s 500,000 soybean growers,” Smith reported. “‘Right now, we’re in a very dire situation,’ Ragland said in a TikTok video that has drawn national attention to farmers’ plight.”

“The absence of Chinese orders represents a dramatic departure from normal trading patterns,” Smith reported. “China typically accounted for over 25% of total U.S. soybean purchases, with roughly one-third of annual sales to the country normally booked by this point in the season. This translates to approximately 8-9% of the entire U.S. crop that would typically be sold to China by now currently sitting at zero.”

The University of Arkansas System Division of Agriculture’s Mary Hightower reported that “in the U.S. Department of Agriculture’s most recent ‘Export Sales’ report on Aug. 21, ‘the U.S. still had no sales of soybeans to China,’ said Scott Stiles, extension economics program associate for the Division of Agriculture. ‘A year ago, we had already sold them 2.9 million tons by this time.’”

Ag Trade Deficit Hit Another Record High in July was originally published by Farmdoc.