Ag Policy Blog

USDA Forecasts Lower Ag Exports, Record Imports and Higher Ag Trade Deficit

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A ship loading with soybeans for exports. USDA cut the forecast for U.S. agricultural exports by $3.5 billion overall, including a $2.4 billion decline in soybean exports. Agricultural imports are higher, driven partially by a strong dollar, which hurts exports and helps imports. (DTN file photo)

USDA on Tuesday projected a $9 billion agricultural trade deficit in Fiscal Year 2023 as the Economic Research Service forecasts lower exports than earlier forecasts.

U.S. agricultural exports are projected at $190 billion for FY 2023, a $6.4 billion drop from FY 2022 farm exports.

The export forecast for FY 2023, which runs from October 2022 to the end of September 2023, was lowered by $3.5 billion from the August trade forecast.

Agricultural imports are forecast at a record $199 billion, a $2 billion in increase from the August forecast.

One element in the adjustment in trade numbers comes from a strong U.S. dollar, "while a headwind to the export forecast, is partially responsible for higher import demand," USDA's report stated.

All of that leads to a projected $9 billion trade deficit, compared to a $2.4 billion positive trade balance in 2022.

Ag had a stretch of trade deficits of $1.3 billion in 2019 and $3.7 billion in 2020. As recently as 2017 and 2018, the agricultural sector had positive trade balances of $17.6 billion and $12.1 billion, respectively.

The trade balance for agriculture has swung dramatically over the past decade when the American agriculture was used to seeing positive trade balances averaging over $30 billion in 2011, 2012 and 2013.

USDA cited reductions in soybean, cotton and corn exports.

-Soybeans now are projected to have $2.4 billion lower sales to $32.8 billion "due to smaller production and increased competition from South America."

-Cotton exports are forecast as down $1 billion to $6 billion based on lower values and lower demand.

-Corn exports also are forecast down by $600 million to $18.5 billion on lower export volumes.

On the positive side of the ledger, livestock, poultry and dairy exports are forecast to increase $300 million to $41.4 billion Beef exports are up $500 million to $10.3 billion, driven by higher prices. Beef, poultry and variety meat sales will offset declines in pork and dairy exports.

Ethanol exports are expected to stay steady at $4.2 billion, the same as the August forecast and will be a record if realized.

Horticultural products are expected to come in at $39.5 billion.

For imports, USDA cited higher projected imports driven by horticultural products, sugar and tropical products, as well as grain and feed products.

The full ERS report can be found at…

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