Ag Policy Blog

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 https://www.ers.usda.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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