USDA lowers 2025 forecast but China demand weak
The United States Department of Agriculture has updated its quarterly trade outlook, lowering the projected farm trade deficit for fiscal year 2025 to $47 billion, down from $49.5 billion in June. The deficit is expected to narrow further to $41.5 billion in 2026, though still above 2024’s $32 billion.
USDA raised its 2025 export forecast from $170.5 billion to $173 billion but expects exports to fall to $169 billion in 2026. Imports are also projected to decline, from $220 billion this year to $210.5 billion in 2026. However, soybean exports are expected to drop sharply from $21.5 billion in 2025 to $18.3 billion in 2026, continuing a decline from $24.2 billion in 2024.
Soybean growers face particular strain due to trade tensions with China. USDA projects U.S. agricultural exports to China will fall from $17 billion in 2025 to just $9 billion in 2026 — the lowest since 2007. China, once the top U.S. market, is expected to drop behind the European Union, Japan, and South Korea, while Brazil strengthens its role as China’s primary supplier.
The first half of 2025 already saw a record $28.6 billion deficit, marking a sharp reversal after decades of U.S. agricultural surpluses. Experts note that while imports and exports often involve different products — such as the U.S. exporting bulk crops like corn and soybeans while importing fruits and vegetables — the trend reflects long-term challenges.
Former USDA chief economist Joe Glauber explained that the deficit may not be as troubling as it seems, since imports and exports serve different needs. Still, the numbers highlight the pressure facing U.S. farmers in global markets.
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