This is the last of a three-part series on the impact of agricultural exports on the U.S. economy and the risks and promise for ag trade going forward.
Establishing international markets for U.S. agricultural products often involves splashy, high-profile announcements of trade agreements between countries. But trade can also evolve quietly, over time, with an eye toward helping other countries develop the ability to build businesses capable of buying our products. A win-win.
Farmer Mark Read has seen the latter happen, firsthand, as a district director for the Illinois Soybean Association and a representative for the U.S. Soybean Export Council. As he tells it, he was in Nigeria two years ago as part of the Soy Excellence Center’s program to teach classes in other countries in poultry production, aquaculture, and operating a feed mill, among other ventures.
During a discussion, a Nigerian farmer recounted how Read had presented him with his poultry production certificate following completion of classes in a prior year.
“I had 50 chickens then,” the farmer told Read. “Now I have 500 and you gave me my certificate.” The farmer then pulled out his phone and proudly showed Read a photo of the Illinois farmer handing him his class completion diploma.
Mark Read “His comments brought tears to my eyes,” says Read. “It hits me pretty hard when you hear stories like that.” Since 2019 an estimated 28,000 people in numerous countries have taken classes offered by the Soy Excellence Center.
As in Nigeria, these classes are often a “long-term play,” according to Read. “They just don’t have the money to be buying our soybeans.” The instruction — by Americans as well as local ag officials — helps instill in farmers the belief that they, or their countries, can become customers one day and have a favorable view of working with the U.S.
“We’re training the leaders that we’ll hopefully have a relationship with in the future,” says Read. Nigeria is not a big buyer of U.S. ag products, but it's the most populated country in Africa and one of the fastest growing as well, with more 400 million residents expected by 2050.
In the short term, it's likely no single country can take up the slack caused by the decrease in trade the past few years with China. But U.S. ag groups see good prospects for developing trade across Asia, Africa and other regions.
The stakes of this scramble for new markets are high for U.S. agriculture in the long term, too, given the expected increases in farm productivity and the softness of the Chinese market. Much of the projected population growth in coming decades will be in poorer regions, including sub-Saharan Africa. Fertility rates are falling in the higher-income regions – including North America, Europe and China – that have been the mainstay for American ag exports.
Africa’s population is projected to grow by around a billion people by 2050. Asia will also add around half a billion people to its already large population. Home to many of the fastest-growing economies today, both regions offer ample opportunities for U.S. farmers in the coming decades.
“Projected population growth is all in Africa and South Asia,” former USDA Chief Economist Joseph Glauber told Agri-Pulse.
Animal protein consumption in China grew in tandem with the country’s expanding consuming class. In 2000, only 4% of urban Chinese households were middle class. By 2012, that figure had surged to almost 70%, according to McKinsey and Company.
A similar phenomenon is underway in Southeast Asia today. As incomes have increased, there has been a notable shift in protein consumption from plant to animal proteins, according to an October 2024 study. This shift has brought new opportunities for U.S. meat exporters – who have seen their exports to the region grow from less than $60 million in 2000 to more than $665 million in 2021 – as well as feed and grain producers that provide inputs for animal feed.
Part 1 of Ag trade's uncertain future: Exports offer economic impact far beyond the farm gate
Private consumption of food and other goods is expected to increase 377% in the Philippines between now and 2040, and by 345% in Vietnam, 267% in India, and 227% in Malaysia, according to the Economist Intelligence Unit.
The Middle East and North Africa will also have to find 82 million metric tons of grains annually in 2034 to meet rising demand. U.S. soybean exporters, for example, have already made inroads in the region in an effort to diversify export markets.
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In the past two years, representatives of the National Association of State Departments of Agriculture have visited the Philippines, Vietnam, Kenya and Indonesia, among others, according to RJ Karney, NASDA’s senior director of public policy.
“We’re not going to make up any loss from China,” said Karney, “but we are focusing on southeast Asia and Africa. We’ve been doing a lot in Kenya.”
Virginia Houston, director of government affairs at the American Soybean Association said during a recent panel hosted by the American Association for the Advancement of Science, that her industry has done “a lot of work in the Middle East, North Africa, in Morocco and Egypt, working with aquaculture producers and poultry farmers in those countries to grow the demand for high-quality, high-protein U.S. soy as fish feed and as chicken feed.
"And we've seen that market grow exponentially since then,” she added.
The amount of foreign ag trade is always changing and has been growing. From 1998 to 2023, U.S. foreign ag trade more than tripled, from $57.3 billion to $174 billion. Since NAFTA was approved 30 years ago and the USMCA in 2020, trade with Canada and Mexico has more than quadrupled. China had 4% of U.S. trade in 2004. That grew to 15% by 2023.
Meanwhile, there has been a decline in export share to Europe and higher-income East Asia, such as Japan. In general, the share of U.S. ag exports has remained steady at about 20% of production since 2013. This despite the fact U.S. production continues to increase, using the same amount — or even less — land.
Comparing U.S. export trade in 1998 to 2023, the biggest increase in sales is in North America to Canada and Mexico — from 23.4% to 32.6% of all ag exports, according to USDA. The U.S. share of trade to the EU has declined from 15% of our ag exports to 7.2% in 2023.
The percentage of our exports to North Africa and the Middle East has declined, while trade with South America and the Caribbean has increased slightly during that time.
Could India be the next China?
Near the top of the U.S. trade wish list is India, with its nearly 1.5 billion people. India is known for being very protectionist, with a byzantine, multi-layered bureaucracy, but the U.S. has worked long and hard to increase trade there. The U.S. is that country’s fifth largest supplier, exporting $1.73 billion worth of agricultural goods in 2023. India primarily buys U.S. cotton, soybeans, ethanol, forest products and seafood, according to USDA.
Earlier this year, the U.S. Trade Representative announced India had reduced tariffs on products such as frozen turkey and duck, blueberries and cranberries. Last year India agreed to remove retaliatory tariffs on certain U.S. products such as chickpeas, lentils, almonds, walnuts, and apples.
There are indications India could seek more trade, according to the Foreign Agricultural Service. “India is already confronting production problems resulting from depleted water reserves, soil degradation, increasingly erratic weather, and labor migrating to urban areas,” FAS said in a report earlier this year. India has already negotiated free trade agreements, or is working on them, with Australia and the United Kingdom.
The Indian market, with its vast population, rising incomes and emerging middle class, offers perhaps the closest economic parallel to China, said former USDA Chief Economist Joe Glauber.
But Glauber, who is now a senior research fellow in the International Food Policy Research Institute’s markets, trade and institutions unit, warned that India may not follow the same dietary shifts observed in China and Southeast Asia.
Some 80% of India’s population are Hindu and India’s National Sample Survey Office estimates that less than 10% of the population eat beef.
“Poultry and dairy consumption is growing but we have yet to see the big transformation that we saw in China regarding animal production,” Glauber said.
The standard of living in India has gone up dramatically in recent years, but not necessarily across the board, according to Peter Friedmann, executive director of the Agriculture Transportation Coalition. “Many of their citizens can afford better food and want more goods,” he says. For example, India is a continuously growing market for U.S. almonds, pistachios and walnuts.
“These are not bulk foods required for bare sustenance, rather they are foods demanded by a higher socioeconomic market,” Friedmann said.
There was a time 15 years ago when almost all that was talked about at nut growing conferences was “China, China, China,” said Matt Woolf, a specialty crop analyst with Terrain Ag who follows the nut, fruit and produce industries. From the marketing years of 2015-2016 to 2023-2024, California almond exports to India more than tripled. “Given their current per capita consumption [much lower than the U.S.] … there’s likely more room for growth,” he says.
Clarice Turner, president and CEO of the Almond Board of California, noted at the industry’s annual conference that both the European and Indian markets were showing growth. Sales to India jumped 21% in the latest crop years, while sales to western Europe were up 3%.
Turner said India has by far the most growth potential, even with the risk of reviving retaliatory tariffs, although the industry also is exploring new markets such as Morocco, Indonesia and Turkey.
Economic struggles may ultimately limit Africa
In sub-Saharan Africa opportunities abound for U.S. grain producers. The region’s growing grain production will likely be unable to keep pace with its swelling population. By 2034, the region is likely to need over 100 million metric tons more grain than it can produce. Imports are likely to fill that shortfall.
But many African countries lack the financial resources to buy foreign goods or the infrastructure to efficiently move products.
“There are lots of opportunities in Africa,” said Andrew Brandt of the U.S. Grains Council. “But they have unique challenges with many countries landlocked. How do you get the product there? They need ports and roads.”
The U.S. has a long relationship with Morocco, which, among other things, buys corn from the U.S. The council has an office in Tunisia, in north Africa, that serves the entire continent of Africa and the Middle East. “It takes time to develop robust new demand. It takes time to build relationships and infrastructure,” Brandt said.
In Africa, the potential seems to never be fulfilled, according to Friedmann.
“I am not bullish on Africa,” he said. “They say it is untapped, but it’s been untapped for decades and decades.” China has invested in Africa’s infrastructure, but they bring in their own workers and seem to be more comfortable with officials who may take bribes to keep projects on track, according to Friedmann.
US faces competition for global markets, too
USDA's latest ag trade forecast, which shows a $45.5 billion deficit for fiscal 2025, underscores the headwinds facing U.S. farmers and ranchers as they aim to develop new markets.
The department estimates that deficit will continue through 2033 but narrow in size. A large part of the deficit is the growing U.S. consumer demand for fresh fruits and vegetables that are increasingly grown in countries with lower labor costs and fewer regulatory pressures. Another factor in the growing deficit is the declines in prices for corn, soybeans, cotton and other commodities that have lowered the value of U.S. exports.
But export volumes of some commodities also have been down or flat since 2021. The United States is projected to export 59 million metric tons of corn in fiscal 2025, the same amount as FY24 and down from 68.2 million metric tons in FY21.
Moreover, an increasing supply of grains and oilseeds from South America coupled with changing trade patterns worldwide is expected to weigh on U.S. exports, particularly in the short term, according to USDA.
Still, demand for grain is expected to continue growing globally over the next decade.
USDA estimates that sub-Saharan Africa will need 102 million metric tons additionally by 2034, while South Asia will need 89 million metric tons more. Demand in the Middle East and North Africa is projected to grow to 82 million metric tons by 2034.
Glauber said that finding potential export markets isn't the only challenge facing U.S. agriculture in the near term. Scaling up U.S. production to capitalize on growing global demand is another.
“Most of the growth in U.S. export quantities will be constrained by yield productivity where suppliers like Brazil have the advantage of both yield growth and increased area,” Glauber said. “This is not to say that the U.S. is not competitive—its exports will grow but they will be limited just because their arable crop base is capped.”
Oliver Ward and Brad Hooker contributed to this report.