USDA Forecasts Narrower Agricultural Trade Deficit Heading into FY2026

The U.S. Department of Agriculture is projecting a narrower agricultural trade deficit in fiscal year 2026, supported by stronger-than-expected export performance and modest declines in imports—an outlook that carries implications for U.S. pork and livestock producers navigating global markets.

According to USDA’s latest quarterly trade forecast, the ag trade deficit is expected to decline to $37 billion in FY2026, down from $43.7 billion in FY2025. That projection is an improvement from USDA’s August outlook, which had pegged the FY2026 deficit at $41.5 billion.

The forecast was published by USDA’s Economic Research Service following a delay related to the federal government shutdown.

Export Outlook Improves, Though Year-Over-Year Declines Remain
USDA now expects U.S. agricultural exports to reach $173 billion in FY2026, up from the $169 billion projected in August. Even with that upward revision, exports are still expected to fall slightly year over year after totaling $175.6 billion in FY2025.

On the import side, USDA forecasts agricultural imports to decline to $210 billion in FY2026, down from $219.4 billion the previous year. The combination of improved exports and softer imports is driving the narrower trade deficit outlook.