trade advisory

Several Factors Contributing to Decreased Agricultural Trade Values

Brian GermanAgri-Business, Trade

The U.S. is experiencing a significant shift from decades of agricultural trade surpluses to substantial trade deficits, with a projected record deficit of $32 billion for fiscal year 2024. American Farm Bureau Federation (AFBF) Economist Betty Resnick highlighted the issue in a recent Market Intel report. The change in trade conditions is reportedly due to rising imports and declining export values.

Agricultural Trade

Imports of horticultural products, especially fruits and vegetables, have surged due to higher consumer demand and a strong U.S. dollar, which makes imported goods cheaper. Meanwhile, domestic production of these crops has decreased, partly because of high labor costs and urban encroachment. The strong U.S. dollar and falling commodity prices have also hurt exports, making U.S. products less competitive globally. Additionally, the lack of new free trade agreements since 2012 has allowed other countries to gain market advantages.

It marks the fourth trade deficit in six years, highlighting a significant change from the historical trend of agricultural trade surpluses. To address these challenges, AFBF suggests policy changes are needed to reduce labor costs, negotiate better trade deals, and increase funding for international market promotion.

Listen to the report below.

Brian German
Ag News Director / AgNet West