Lower crop prices + limited beef supplies + increased competition from Brazil = a record projected U.S. agricultural deficit, according to the USDA. And that deficit reflects a rapid escalation from one year ago.
2024 Fiscal Year estimated trade deficit
$30.5 billion
2025 Fiscal Year estimated trade deficit
$42.5 billion
The increase in the annual deficit reflects an anticipated 40% jump. And it isn’t because U.S. producers aren’t increasing harvests. Quite the opposite.
U.S. producers could see record corn and bean harvests. But a drop in prices for those commodities makes the difficult math equation right now. And that increased competition from Brazil doesn’t help, which further expands supply options for other countries.
RELATED: Farm CPA Report lead author Paul Neiffer expects challenging years for farmers for the next several years but also feels optimistic about the long-term future of agriculture. He explains why he sees difficulties for growers and producers now and why he expects agriculture to recover in this American Farmland Owner interview.
Overall, the USDA expects exports to drop by $4 billion from the current fiscal year to the next, while agriculture imports will increase by $8 billion year-to-year. Those two numbers heading in opposite directions illustrate why the agricultural trade deficit is growing.
More fresh fruits and vegetables, sugar, cocoa, coffee, and wine are among the higher imports for the U.S.
RELATED: The Congressional Budget Office expects the new proposed Farm Bill by the U.S. House Agricultural Committee, led by Republicans, would add $33 billion to the federal budget deficit over the next decade.
Here is a breakdown of those costs from the CBO: “This would include a net increase of about $43.4 billion over nine years for commodity support programs; a net decrease of $1.8 billion for conservation programs; a net decrease of $20.6 billion for the domestic nutrition programs by limiting future increases to the Thrifty Food Plan (TFP) that is used to determine Supplemental Nutrition Assistance Program (SNAP) benefit levels; and an increase of $12.0 billion for other titles.”
Here is a breakdown of some of the expected export declines:
Soybeans: -$1.5 billion
Corn: -$900 million
Cotton: -$900 million
Beef: -$1 billion
Livestock/poultry/dairy: -$100 million
Horticulture: +$1.2 billion
Ethanol: Unchanged
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