Trade Deficit Record Pt 1
From the Ag Information Network, I’m Bob Larson. USDA is projecting a record trade deficit next year at a time of sharply declining commodity prices.
And this is how USDA Chief Economist Seth Meyer sees the expected 2025 trade deficit hike …
MEYER … “A lot of this is tied to falling commodity prices.”
Other factors playing into the rising Ag trade deficit …
MEYER … “A slower Chinese economy, continued strength of the U.S. dollar, China diversifying its sources for trade, perhaps a little bit weaker on export competitiveness for ourselves.”
All that is leading to a bigger trade deficit despite rising exports …
MEYER … “Four billion dollars to 169 billion dollars for exports, an increase of eight billion dollars on imports, to a total of 212 billion dollars for fiscal year ’25, which means a rising trade deficit of 42.5 billion dollars forecast for fiscal year ’25.”
That’s a 12-billion-dollar hike from last year’s revised 30.5-billion-dollar trade deficit or a 34% increase. The USDA forecast comes amid declining economic conditions in farm country, compounded by the lack of a farm bill.
It also follows an intense policy debate over the value of free trade deals that the administration has moved away from, but both parties’ argue are a must to open export markets.
