Sep 10, 2024USDA forecasts $4 billion drop in ag exports in FY 2025
U.S. agricultural exports are forecast to drop $4 billion in fiscal year 2025 from a revised FY 2024 estimate, according to an August report from the USDA’s Economic Research Service (ERS).
The decline is mainly driven by lower unit value of soybeans, corn and cotton, as well as lower volumes of beef, according to the report.
USDA’s initial outlook for FY 2025 forecasts a record agricultural trade deficit of $42.5 billion.
“This growing deficit highlights the importance of the U.S. restarting agricultural trade negotiations with major trading partners,” Ted Tschirky, National Potato Council vice president of trade affairs, said in a statement from NPC. “As other countries benefit from low tariffs in key markets, the U.S. lags behind through our own failures to take action.”
Fresh vegetable imports are forecast to grow by $700 million, or 5%, in FY 2025 to $13.5 billion, according to the report (.pdf). Volumes are forecast to grow by 200,000 metric tons.
“These increases are partially associated with expectations of improved growing conditions in Mexico, the largest import supplier,” according to the report. “Processed vegetables are expected to grow $400 million to $9.1 billion, and volumes are increased 200,000 metric tons over FY 2024. Frozen french fries are a major import and Canada’s large potato stock coupled with relatively low prices are expected to facilitate another strong year of imports.”
By the numbers
The report, released in late August, forecasts U.S. FY 2025 agricultural exports at $169.5 billion and imports at $212 billion.
For FY 2024, ag exports are predicted at $173.5 billion, up $3 billion from a May projection, largely due to higher horticultural and grain exports.
In 2025, horticultural product exports are expected to hit a record $41.5 billion, up $1.2 billion from 2024.
Fresh fruits and vegetables are forecast $100 million higher to $7.6 billion due partly to rising apple shipments to India following last year’s lifting of retaliatory tariffs that had been in place since 2019.
Processed fruits and vegetables are predicted $300 million higher to $8.3 billion on rising exports to Canada, Mexico and Europe.
The 2024 estimate for horticultural products jumped $1.3 billion to $40.3 billion. Fresh fruits and vegetables are $400 million higher at $7.5 billion. Stronger strawberry shipments to Canada helped boost processed fruit and vegetables $300 million to $8 billion.
FY 2025 horticultural imports are 4% higher over the previous year, with fresh fruits the largest component, growing by $800 million or 4% to $20.3 billion.
Fresh vegetable imports expect to expand by $700 million or 5% in 2025 to $13.5 billion. Processed vegetables are predicted to grow $400 million to $9.1 billion.
FY 2025 imports from Canada are projected to be $42.1 billion, 3% higher than 2024. Canada’s crop production is expected to be broadly favorable, providing ample supply for FY 2025 exports of grains, oilseeds and horticultural crops including potatoes. This should facilitate continued growth of prepared fruit and vegetables exports, as well as other processed foods, according to the USDA.
Imports from Canada in 2024 were lowered $200 million to $40.9 billion, a 3% increase over 2023. A strong U.S. dollar coupled with strong domestic demand continues to bolster import values of prepared foods, beverages, baked goods and livestock products as well as horticultural products, particularly frozen potatoes and other vegetables.
In the Western Hemisphere, where Mexico and Canada are the largest U.S. ag trade partners, higher prospects for horticultural products balance out lower exports of beef.
FY 2025 agricultural imports are estimated to be $8 billion higher than previous estimates, following rising imports of horticultural as well as sugar and tropical products, according to the report.
Japanese market
Gaining full access to the Japanese market for U.S. fresh potatoes has been a focus of the potato industry for decades.
The topic is expected to be a main point of discussion during meetings between U.S. and Japanese agricultural officials the week of Sept. 16 in Idaho Falls, Idaho. Representatives from the USDA’s Animal and Plant Health Inspection Service (APHIS) and Japan’s Ministry of Agriculture, Farming and Fisheries (MAFF) will gather in the U.S.’s top potato-producing state.
Ahead of those meetings, Idaho Farm Bureau spokesperson Shaun Ellis talked with Idaho Ag Today about those ongoing efforts — a subject NPC CEO Kam Quarles revisited with Spudman last month.
Although the U.S. has held market access to Japan for chipping potatoes since 2006, it is seeking market access for all fresh potatoes, including table stock. Already the second largest market for U.S. potatoes, a fully opened Japanese market is estimated at $150 million to $200 million annually.
“Gaining full access to the Japanese market for U.S. fresh potatoes has been a focus of the potato industry for at least two decades, yet Japan continues to stall and delay the negotiations,” Quarles said in a news release ahead of the bilateral meetings. “The U.S. potato industry urges our partners at USDA to require Japan to uphold their international obligations. Securing access will help to reduce the U.S. agricultural trade deficit, benefitting American workers throughout the supply chain and Japanese consumers alike.”
