News in brief:
– The US is experiencing a record agricultural trade deficit in early 2025, with imports already exceeding exports by $19.7 billion in the first four months.
– This change is driven by strong demand for consumer-ready products and slowing exports as experts stress the need for broader market access and strategic policies to support American farmers.
The United States is facing its largest-ever agricultural trade deficit in early 2025, with imports outpacing exports by $19.7 billion from January to April, according to the USDA’s Outlook for U.S. Agricultural Trade: May 2025 report.
This marks the highest deficit on record for the first four months of any year and suggests the full-year shortfall could exceed the projected $49.5 billion, the most significant imbalance in US agricultural trade history.
After decades of steady surpluses, the US agricultural sector has faced continuous trade deficits since 2022, driven by strong domestic demand for imported consumer-ready products, such as fresh produce, wine, nuts, and coffee, many of which are not widely produced domestically or are seasonal.
Horticultural goods are expected to make up nearly half of all agricultural imports in FY 2025, reflecting consumer preferences for variety and year-round availability. Meanwhile, US exports have slowed due to a strong dollar, high labour costs, and competitive pressure from lower-cost producers like Brazil and Argentina.
Barriers such as tariffs and trade disputes have also reduced access to key international markets.
In contrast, a new trade agreement between the US and the United Kingdom, announced in May, removes significant UK tariffs on US beef and ethanol. The deal is expected to unlock new export opportunities, especially for meat and corn producers, even as it falls short of a full free trade pact.
As the US works to balance trade, experts emphasise the importance of strategic agreements and innovations in agricultural trade policy to maintain competitiveness and food security. The current deficit underscores the urgent need for broader market access and continued support for American farmers in an increasingly globalised food economy.
