The recent USDA Trade Outlook has U.S. ag trade running in the red for 2024 and 2025. Betty Resnick, an economist with the American Farm Bureau Federation, says the updated forecast doesn’t give us much better news.

"I feel like a broken record, but last week's USDA trade outlook confirmed once again, that both fiscal years 2024 and 2025 are going to be record trade deficits in agricultural products," Resnick said. "The fiscal year ‘24 deficit ended up being $31.8 billion. And fiscal year ’25, which started on October 1, is now forecasted at $45.5 billion. Mexico and Canada are leading the charge as the top destinations for US export markets."

Resnick says there are multiple factors driving the negative forecast.

"Fiscal year 2025, the USDA currently projects the third year in a row of declining exports by value, which combined with continuously climbing imports, exasperates the ag trade deficit. Declining exports by value are mostly still on sliding commodity prices with volumes of bulk commodities projected to stay steady year over year," Resnick said. "Of course, any projections made now are still educated guesses, as we'll have to wait and see how the next administration's trade agenda shakes out."

A new report from the Department of Commerce shows the larger U.S. economy at a deficit as well.

"The October trade data was just published, and overall, the U.S. economy has a smaller trade deficit than forecasted in October, mostly on falling imports. Now, this drop in October imports may be related to a rush of imports in September before October's potential port strikes across the entire east coast," Resnick said. "Now, while overall exports fell in October, agricultural exports have had a year-to-date peak, which is pretty typical this time of year with large after-harvest exports."