WASHINGTON, D.C. (RFD NEWS) — The U.S. Department of Agriculture (USDA) says the U.S. agricultural trade deficit is narrowing as the department works to expand market access and turn new international trade agreements into sales for American farmers and ranchers.
USDA Under Secretary Luke Lindberg says the agricultural trade deficit is down 61 percent from last year, crediting a three-part strategy focused on opening new markets, promoting U.S. products overseas and converting trade agreements into actual purchases.
“The deficit this year is down 61% over last year,” Lindberg said. “That has really been the result of the three-point plan that the secretary and I launched.”
Lindberg said USDA has conducted a series of rapid-response trade missions to markets where President Donald Trump has signed new market access agreements. He has personally led nine trade missions, aimed at turning agreements reached on paper into contracts for U.S. agricultural products.
USDA has also provided $166 million in new funding to farmer-led organizations that promote American agriculture around the world. Those groups include the Washington Apple Commission, U.S. Soybean Export Council, U.S. Meat Export Federation and Wine Institute.
Lindberg said the administration has now secured nine trade agreements and nine additional framework agreements, creating what he described as a pipeline for further market access.
“Across the board, we’ve seen tremendous new wins for farmers and ranchers,” Lindberg said, adding that the U.S. is experiencing what he called its best year ever for agricultural exports.
Mexico Remains a Key Market for U.S. Corn
As the U.S.-Mexico-Canada Agreement (USMCA) review moves forward, the U.S. Grains and Bio Products Council is also focused on protecting North American demand.
New Council leader Jay Reiners said maintaining access to Mexico is one of his top priorities, particularly for U.S. corn.
“We have to protect and grow our largest market, which is Mexico,” Reiners said. “It’s over a billion-bushel corn crop that goes down to Mexico, and we need to protect that at all costs.”
Reiners also said Mexico could become a larger customer for U.S. ethanol. He is hopeful the country will establish an E10 ethanol mandate within the next six months, which could provide additional demand for U.S. ethanol producers.
He said expanding export opportunities will require looking beyond North America, particularly toward rapidly growing markets in Southeast Asia.
Reiners pointed to the Philippines and Vietnam as emerging opportunities for U.S. agricultural products and ethanol, while also highlighting Indonesia and Japan as potential growth markets.
“The middle-class populations are exploding, and the first thing they always seek out is higher-quality nutrition,” Reiners said. “I think the U.S. is very well positioned to help supply that.”
He added that expanding domestic ethanol demand will also remain a priority during his tenure.
China Remains a Wild Card
Despite progress on other trade fronts, China remains a major uncertainty for agricultural markets.
Commodity analyst Mike Zuzolo said he is taking a cautious view of future Chinese demand, particularly as U.S.-China trade relations continue to evolve.
“I’m kind of discounting China in terms of their demand,” Zuzolo said. “My assessment is that China’s demand is probably going to be less, not more, and that the trade frictions will increase, not decrease.”
Zuzolo said the direction of U.S.-China relations following an expected meeting between President Trump and Chinese President Xi Jinping in September could have significant implications for agricultural markets.
Weather Adds Another Layer of Uncertainty
Trade isn’t the only factor producers and traders are watching. Weather could also play a major role in agricultural markets over the coming months.
Zuzolo is monitoring the potential for a significant El Niño pattern, which could create additional volatility in global agricultural markets.
At the same time, drought continues to affect portions of farm and ranch country.
Angus producer and analyst Brady Huck of Empower Ag Trading said cattle producers in dry areas are evaluating pasture conditions and making decisions about herd management.
“We’re into that timeframe in cow-calf country where you’re evaluating your pasture conditions,” Huck said. “How dry is it out there? How much grass do you have?”
Huck said producers may need to consider pregnancy checking cows, culling animals or bringing additional cattle to market if pasture conditions deteriorate. In some areas, he said producers may also consider early weaning to reduce pressure on pastures and help maintain cow condition.
While some weather outlooks point toward drought relief in parts of the country, uncertainty remains over where and when significant moisture will develop.
