Economic Tidbits

Trade Deficit for Two Years Running

The U.S. experienced a trade deficit in agricultural goods for the second consecutive year last year. Imports of agricultural goods exceeded exports by over $20 billion. This follows a deficit in 2022 of $2.0 billion, the first time in 63 years the U.S. had a deficit in agricultural trade. Falling exports, off 11 percent, to $174 billion were the underlying reason for the deficit. Imports were also down, but less so, falling just over $3 billion to $195 billion. 

Animal feed and oil meal was the only export category important to Nebraska to see growth in value last year, increasing 6 percent (Figure 1). The values of all other key Nebraska exports were down. The value of wheat exports was down 27 percent, corn fell 29 percent, soybeans were off 19 percent, and red meats (beef, pork, and lamb) were off 5 percent. The U.S. Meat Export Federation (USMEF) says the value of beef exports fell 15 percent to just under $10.0 billion, off from a record $11.68 billion in 2022. In contrast, pork exports surged 8 percent to hit a record of $8.1 billion. Last year was the first time in five years exports of red meats, wheat, and soybeans were down compared to the prior year.

Export volume was off as well in 2023, declining 17 percent (Figure 2). Corn exports were down 21 percent, wheat down 13 percent, and soybeans were off 15 percent. Exports of red meats were up slightly, 1 percent, due to a growth in pork tonnage of 6 percent. Beef tonnage, though, was down 12.5 percent.  

FIGURE 1. CHANGES IN THE VALUE OF U.S. AGRICULTURAL EXPORTS, 2019-2023

Source: USDA Economic Research Service

FIGURE 2. CHANGES IN THE VOLUME OF U.S. AGRICULTURAL EXPORTS, 2021-2023

Source: USDA Economic Research Service

Global competition, ample supplies, a stagnant global economy, a strong dollar, and geopolitical conflict were factors in last year’s falling exports. This year portends more of the same. The USDA projects agricultural exports in fiscal year 2024 (ends September 30) at $169.5 billion, lower than the prior fiscal year. The volume of corn exports is forecast higher, but the value will be lower due to lower prices. The value of wheat, feed, and soybean exports are also projected to decrease. Beef exports are expected to decline to 2.79 billion pounds due to tightening domestic supplies and higher prices. Increased beef production in competitors like Australia and Brazil will increase competition in several markets.

The value of agricultural exports each year equates to roughly 30 percent of Nebraska agricultural receipts. Declining exports last year hit producers’ bottom lines. This year looks like sluggish exports will result in more tough economic sledding.

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