The Agriculture Department on Tuesday projected that the U.S. agricultural trade deficit will widen this fiscal year to $45.5 billion, the largest on record and an increase from the August quarterly forecast, as imports grow faster than expected.
U.S. agriculture exports for fiscal 2025, which started Oct. 1, are set to fall from $174.4 billion last year, to $170 billion, according to USDA – a slight improvement on August’s estimate of $169.5 billion. Beef, dairy, corn, sorghum and fruit and vegetable exports are among the products revised upwards on the previous estimate, as corn and sorghum fetch prices higher than anticipated in global markets, and higher beef export volumes more than offset falling prices.
Exports to Asia, particularly China, are set to fall from their FY24 levels. Chinese buyers bought more than $25.7 billion worth of U.S. agriculture goods in FY24 but are projected to buy just $23.3 billion in FY25.
U.S. imports, meanwhile, are anticipated to grow more than initially projected. The U.S. is expected to import $215.5 billion of agriculture products in FY2025, up from $206.2 billion in 2024 and $3.5 billion more than projected in August. Increased projected imports of horticulture products, sugar and tropical products are responsible for much of the revision.
As the domestic citrus industry continues to feel the effects of hurricanes Milton and Helene, USDA anticipates orange juice prices will remain elevated and import values will remain robust. Improved growing conditions in Mexico are also likely to lead to fresh vegetable imports above FY24 levels. Rising global coffee prices will also spur U.S. coffee import values, USDA says, with imports jumping from around $9 billion in FY2024 to $9.8 billion this financial year.
Strong U.S. demand for biofuels – particularly those made from low carbon intensity feedstocks – expanded Canadian crush capacity and improved conditions for olive growing in Europe are likely to drive a $1 billion increase in vegetable oil imports from FY24 to FY25.
The lion’s share of the FY25 import growth is set to come from trading partners in the Western hemisphere, particularly Canada and Mexico. Imports from the U.S.’ neighbors are both set to rise by more than $2 billion. President-elect Donald Trump, however, has threatened to impose a 25% tariff on both countries’ products shortly after entering office. A separate 10% tariff, Trump says, will be added to all imports from China.
The United States began running an agricultural trade deficit in 2019 after China responded to tariff hikes introduced by then-President Trump by imposing new tariffs on U.S. ag exports and ending a decades-long U.S. trade surplus. The U.S. has since faced an agricultural trade deficit in four of the last six years. The FY24 trade deficit of $32 billion was the largest on record.
"As today’s forecast suggests, America’s farmers, ranchers and processors remain the best in the world and global demand for high-quality, safe and sustainable products are at or near record highs," Agriculture Secretary Tom Vilsack said in a statement on USDA's latest numbers. "Today’s forecast also shines light on the health of the American economy. A strong dollar and economy are evidenced by U.S. consumers’ demand for imports of high-value products such as spirits and coffee. The U.S.’s agricultural export numbers should remain strong unless retaliatory tariffs result in steep declines.”
