US Ag Trade Deficit Widens to $32 Billion

The United States agricultural trade deficit is projected to increase once again to $32 billion in fiscal year 2024, an increase of $1.5 billion from the February projection, according to the USDA Economic Research Service’s May 2024 Outlook for U.S. Agricultural Trade report, which is released quarterly.

“U.S. agricultural exports in fiscal year (FY) 2024 are projected at $170.5 billion, unchanged from the February forecast,” the report says. “Higher exports of livestock and dairy, as well as increased ethanol sales largely offset reductions in grains and feeds, oilseeds, and horticultural products. … U.S. agricultural imports in FY 2024 are forecast at $202.5 billion, a $1.5-billion increase from the February projection that is predominantly driven by higher horticultural products as well as livestock and dairy imports.”

“Horticultural product imports are forecast up $1.5 billion to $99.6 billion, led by increases in fresh fruits and vegetables,” the report says. “Livestock, poultry, and dairy imports are up $600 million to $28.7 billion, buoyed by higher dairy and livestock projections.”

Top Export Markets Change

While the U.S. agricultural export forecast for fiscal year 2024 is unchanged this month at $170.5 billion, Mexico is now projected to be the largest market for United States agricultural exports in 2024, taking over the top spot from China — which has fallen to third — according to the ERS report.

“At $27.7 billion, China is projected to fall below Mexico and Canada as the third largest U.S. agricultural market,” the report says. “The export forecast for China is cut by $1.0 billion from the previous quarter largely due to continued strong competition on soybeans and corn. Exports to Mexico are forecast to rise by $300 million to $28.7 billion, whereas exports to Canada are forecast up $400 million to $28.4 billion, both record highs.”

The report said that for Mexico, “strong sales of sweeteners, rice, pulses, beef, and pork are the primary drivers behind the higher forecast.” For Canada, the increase is “largely driven by higher corn demand and increased shipments of cocoa products, food preps, and fresh fruits.”

For China, “compared with FY 2023, year-to-date U.S. soybean and corn volume shipments to China were down 23 percent and 67 percent, respectively, while Brazil’s shipments of these commodities surged,” the report said. “Lower unit values also contributed to the reduced forecast. Partially offsetting the reduced soybean and corn outlook are higher sales of sorghum and record exports of tree nuts.”

Import Forecasts by Product

The ERS import forecast of $202.5 billion in fiscal year 2024 is “$7.1 billion more than the $195.4 billion recorded for FY 2023 and $1.5 billion higher than the February forecast,” the report said.

“The May FY 2024 imports forecast is 3.6 percent above the FY 2023 imports, which is well above the 0.6-percent growth from the previous year,” the report said. “However, it remains below the average annual import growth rate of 5 percent between FY 2010 and FY 2020, the 10-year period before the pandemic’s disruption.”

For fiscal year 2024, “livestock, dairy, and poultry imports are raised $600 million to $28.7 billion,” the report said. “Dairy imports are up $400 million to $5.6 billion due to higher unit values and volumes of cheese from the EU. Pork imports are raised $200 million on rebounding imports from the EU and robust import growth from Brazil. Live cattle imports are up $200 million largely on stronger expected cattle and calf prices. Beef imports are up $100 million on higher volumes, as U.S. import demand remains robust. Live swine import values are unchanged. Poultry and products are lowered $100 million to $1.1 billion on weaker-than-expected shipments of poultry meat from Chile.”

“Grains and feed imports are unchanged from the February Outlook at $22.4 billion, which is 5 percent above FY 2023,” the report said. “The forecast for total oilseeds and oilseed product imports in FY 2024 is unchanged from the February forecast at $19.7 billion, remaining $500 million above FY 2023.”