USDA Projects $37 Billion Ag Trade Deficit in FY26

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Agri-Pulse’s Oliver Ward reported that “the Agriculture Department is projecting that the ag trade deficit will shrink in FY2026 even more than previously anticipated. USDA expects the trade deficit to fall from $43.7 billion in FY2025 to $37 billion in FY2026, according to its quarterly trade forecast published Tuesday. In its previous report issued in August, USDA had projected a trade deficit of $41.5 billion this fiscal year.”

“The U.S. recorded trade deficits of around $32 billion in FY2024 and $17 billion in FY2023, respectively,” Ward reported. “The quarterly trade forecast, published by the Economic Research Service, had been scheduled for publication last month, but was delayed due to the government shutdown.”

“Driving the adjusted outlook are larger-than-expected exports. USDA now expects $173 billion in ag exports for FY2026, up from the $169 projected in August. But even with the revision, exports are still set to contract year-over-year, after the U.S. recorded $175.6 billion in exports in FY2025,” Ward reported. “Ag imports are also set to fall from $219.4 billion during the last fiscal year to $210 billion in FY2026.”

“A significant portion of the better outlook can be attributed to improvements in the Chinese market. USDA revised U.S. ag export prospects to China upwards by $3 billion from the August to December releases,” Ward reported. “Exports to South Korea, Japan, Mexico and Southeast Asia also all posted small increases from August’s forecast.”

Overall Trade Deficit Narrowed in September

Bloomberg’s Mark Niquette reported that “the US trade deficit unexpectedly narrowed in September to the smallest since mid-2020 as exports surged. The goods and services trade gap shrank nearly 11% from the prior month to $52.8 billion, Commerce Department data showed Thursday. The median estimate in a Bloomberg survey of economists was for a $63.1 billion deficit.”

“The value of US exports rose 3% to the second-highest level on record, fueled by non-monetary gold and pharmaceutical preparations. Imports increased a more modest 0.6%. The figures aren’t adjusted for inflation,” Niquette reported. “…On an inflation-adjusted basis, the merchandise trade deficit narrowed to $79 billion in September, the smallest in nearly five years. Exports of consumer goods, after adjusting for price changes, were the largest on record.”

“The September report showed the US exported a record value of goods to Switzerland, leading to the largest-ever trade surplus with the European nation, according to the Commerce Department,” Niquette reported. “Meanwhile, the merchandise-trade shortfall with China, when adjusted for seasonal fluctuations, narrowed to the second-smallest in data back to 2009. The deficit with Mexico widened to a record, and the shortfall with Canada also grew.“