Ag Trade Deficit Reaches Record High $20 Billion Through April

The American Farm Bureau Federation’s Faith Parum reported that “the U.S. agricultural trade deficit is widening in 2025, driven by shifting global trade dynamics and rising import demand. USDA’s May 2025 Outlook for U.S. Agricultural Trade report provides projections for exports and imports, offering insight into current trade trends.”

“From January through April, the U.S. imported $78.2 billion in agricultural products while exporting just $58.5 billion,” Parum reported. “This $19.7 billion deficit is the largest ever recorded for the first four months of a year and signals that the 2025 deficit could surpass previous records.”

“After decades of consistent trade surpluses, U.S. agriculture has been in an agricultural trade deficit since 2022,” Parum reported. “In fiscal year (FY) 2023, the trade gap reached $16.7 billion and nearly doubled in FY 2024 to $31.8 billion. USDA now forecasts the FY 2025 deficit will rise to approximately $49.5 billion, which would mark the largest agricultural trade imbalance on record.”

What’s Behind the Ag Trade Deficit?

Parum reported that “the U.S. imports products to ensure year-round access to fresh produce and goods not widely grown domestically. Coffee, for example, is almost entirely imported, since production is limited in Hawaii and Puerto Rico.”

“While some seasonal producers face competition from imports, many imported goods do not directly compete with U.S. crops or are made using U.S.-grown ingredients. In other cases, imports complement domestic production,” Parum reported. “Oranges are a good example. Most oranges consumed in the winter and spring are grown in the U.S., but during the off-season, imports help meet consumer demand and keep shelves stocked.”

“In FY 2025, USDA projects that horticultural products, including fruits, vegetables, nuts, wine, and other alcohols, will account for approximately 49% of total agricultural imports by value,” Parum reported. “These products reflect consumer preferences for variety and year-round availability and highlight the role of trade in maintaining a stable food supply. Strong U.S. demand for high-value, consumer-ready products, many of which are not widely produced domestically, has driven up import values, while a large share of U.S. exports remain lower-value bulk commodities, contributing to the growing trade imbalance.”

U.S. Lacks Strategic Response to the Trade Deficit, Industry Says

Pro Farmer Editors reported at the beginning of June that “at the core of the (ag trade deficit) problem is a rapidly evolving global marketplace that the U.S. appears increasingly ill-equipped to navigate. From shifting supply chains to aggressive trade strategies by key competitors like Brazil, Australia, and the EU, the landscape for ag exports is changing fast — and the U.S. is falling behind.”

“‘We have no plan — none — to deal with this growing trade gap,’ said one senior industry executive,” according to Pro Farmer Editors. “‘It’s not just bad policy; it’s no policy at all.’”

“While the U.S. remains focused on retaliatory tariffs and domestic protectionism, its competitors are signing trade agreements, investing in port infrastructure and aggressively promoting exports. Brazil has ramped up grain exports to China,” Pro Farmer Editors reported. “The EU is pushing organic and sustainable branding. Canada and Australia are capitalizing on open market access via the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.”

Agriculture Secretary Brooke Rollins, however, has seemingly made expanding trade and market access for U.S. producers a key area of the first few months of her leadership at the USDA.

Some Analysts Believe Trade Deficit Has Reached its 2025 Peak

AgWeb’s Rhonda Brooks reported that “while the (trade deficit) forecast is concerning, Stephen Nicholson, Rabo AgriFinance global sector strategist for grains and oilseeds, says he is hopeful the agricultural trade deficit for 2025 has already reached its peak.”

“‘My expectation is that we should see that trade deficit in agriculture come back a little because we have all this food in our warehouses now, ready for consumers,’ Nicholson told Farm Journal on Monday,” according to Brooks’ reporting. “Essentially, Nicholson says, many buyers made and imported larger food purchases than usual this spring to get those products into the U.S. ahead of potential trade tariffs the Trump administration announced would be imposed on Liberation Day, April 2.”

“‘You know, when we saw that chart [from President Trump on the planned tariffs], I think a lot of us were pretty taken back by some of the eye-popping numbers we saw there. And then, of course, we came back a week later and they were cut in half,’” he said, Brooks reported.

Ag Trade Deficit Reaches Record High $20 Billion Through April was originally published by Farmdoc.