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U.S. farm exports lag behind imports, creating a trade deficit
With the end of the fiscal year in sight, the United States is running an agricultural trade deficit of $3 billion, unusual for a sector that ordinarily runs a surplus, often in the tens of billions of dollars. The shift is apparently due to the coronavirus pandemic. Through June, with three months left in fiscal 2020, agricultural exports totaled $102.2 billion while imports tallied $105.2 billion, according to USDA data.
“The longer Covid-19 impacts consumers worldwide, the more unlikely it is that exports will make up for lost sales thus far,” wrote economist Veronica Nigh of the American Farm Bureau Federation. “Could 2020 be the first year in recent memory that U.S. agriculture experiences a trade deficit? Only time will tell.”
June was the fifth month of year to show an ag-trade deficit, said Nigh. The deficits have increased in size since March, when the coronavirus became a pandemic. “The effect on international trade is coming into focus,” she said.
USDA data show steep declines in corn and cotton exports in fiscal 2020 compared to the previous year — corn down 11 percent and cotton down 19 percent — with vegetables and prepared fruit exports also suffering. Meanwhile, imports of beef, veal, sugar and related products were up 13 percent apiece. In June, agricultural exports were worth $10 billion and imports were valued at $11.1 billion.
In May, the USDA forecast ag exports of $136.5 billion and imports of 130.2 billion for fiscal 2020. The USDA is scheduled to update its fiscal 2020 estimate and make its first forecast of fiscal 2021 agricultural exports on Aug. 26.