US agriculture faces unprecedented deficit as imports soar to record high

In a recent article, Bloomberg reveals that the US, once a global leader in agricultural exports, is now facing a dramatic shift in its food trade landscape, with imports reaching new heights.

According to the latest trade outlook report from the US Department of Agriculture (USDA), shipments of key products like avocados, coffee, and sugar are set to push the nation's agricultural trade deficit to a record $49 billion this year.

This development highlights a sharp contrast for a country that once used its surplus of food as a strategic tool in diplomacy. The US now finds itself grappling with the reality of a future dominated by persistent agricultural trade deficits. Since 2023, the US has imported more food than it has exported each year. The only previous instances of annual trade deficits occurred in 2019 and 2020 during President Donald Trump’s trade war with China and several years prior to 1960.

Adding to the tension, President Trump has pledged to impose a 25 per cent tariff on goods from Mexico and Canada starting in March, along with an additional 10 per cent tax on Chinese goods. These new tariffs could exacerbate the situation by driving up the cost of food imports, especially if these countries retaliate and agricultural products are caught in the crossfire.

The USDA forecasts that US imports of agricultural products will increase by 6.5 per cent in the year ending September 30, reaching $219.5 billion. Much of this increase is driven by rising imports of avocados, orange juice, and coffee. At the same time, US agricultural exports are expected to decline by 2.2 per cent to $170.5 billion.

Avocados from Mexico, the US largest agricultural import by volume, are projected to increase due to strong demand and improved growing conditions. Similarly, the rising prices of cocoa and sugar are contributing to the higher import bill.

While some grain exports are expected to grow, the appeal of traditional American crops on the global market has been dwindling. Russia has overtaken the US as the world’s top wheat exporter, and Brazil has surpassed the US in the export of corn, cotton, and soybeans.

The USDA’s forecast is based on policies in effect as of February 11, and it does not account for the estimated 70 to 100 million eggs the US is expected to import due to record prices and the ongoing avian influenza outbreak, which has further disrupted domestic production.

This new trend signifies a major shift for US agriculture and poses challenges not only for American farmers but also for the broader economy as the US faces a growing trade deficit in its most critical industry.

By Naila Huseynova