The ag trade deficit “is a real thing” and shouldn’t be ignored, ag economists say

While tariffs have dominated the headlines recently, ag economists say the trade deficit is not something to ignore.

“Yeah, we do have a trade deficit overall in the U.S. economy, and we also have a trade deficit in agricultural and food products. The deficit of agriculture and food products is a story of very different worlds. On the one hand, we have a big surplus in major commodities like wheat, corn, soybeans, cotton, pork, and many other products, but we have a deficit in things like fruits, vegetables, and many processed products. So, again, those have impacts on different parts of U.S. agriculture, and to try and address that deficit is a high priority of the current administration,” said Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri.

Westhoff says while the tariff situation has calmed, they are still having a role in market action. He says there is no question that China will now look elsewhere for commodities like soybeans.

“With the current tariffs that are put in place by China, over 125 percent, that makes it almost impossible for the U.S. to sell soybeans to China. That market will be dominated even more than it already is by Brazil and a couple of other major players outside of the US. So, then the question becomes whether we were able to pick up enough markets elsewhere in the world to offset the loss of the Chinese market. A lot of people are hoping that the current very high levels of tariffs will not persist, that there be some sort of agreement that will at least bring those tariff levels down if not eliminate them entirely.”

Progress could be on the horizon. Bloomberg reports Chinese officials will come to the table if certain demands are met. So far, more than 100 countries have indicated they are willing to negotiate.

Related Stories
For producers, the next proof will be actual export sales, shipment pace, and buyer breakdowns.
Thailand will not replace major corn buyers overnight, but renewed access could create another outlet for U.S. corn demand.
Mike Steenhoek with the Soy Transportation Coalition joins us to discuss the proposed federal gas tax suspension, fuel cost pressures, and what the policy could mean for agriculture and transportation.
China’s soybean buying is shifting hard toward Brazil, leaving U.S. shipments at risk of slowing as South America’s record crop reaches export channels
Cattle analysts say the U.S. beef cattle herd rebuild still faces major hurdles despite some minor positive signals noted in certain regions.
President Trump and Treasury Secretary Scott Bessent are expected to discuss commodities, trade and regional stability during meetings in Asia.

LATEST STORIES BY THIS AUTHOR:

AFBF Economist Faith Parum discusses the financial challenges currently facing farmers and the Farm Bureau’s 2026 outlook for the farm economy.
From tariff talks in Europe to SCOTUS uncertainty and rising farm losses, analysts say policy and global supply will shape grain markets in the year ahead.
Ethanol and corn groups are not hiding their disappointment over new reports that the bill to allow year-round E15 sales failed as Congress forges ahead on government funding, with another shutdown looming.
While row crops are expected to see softer impacts, analysts say severe weather of this magnitude will not be as kind to cattle producers.
Cape Cod FarmHER Chloe Starr dives into the world of shellfish farming at one of the few oyster & clam hatcheries in the U.S.
University of Nebraska President Dr. Jeffrey Gold joined us to discuss seasonal affective disorder, winter mental health, and practical strategies for maintaining well-being in rural communities.