China was less than $500 million ahead of Mexico as the leading customer for U.S. food and ag exports as the fiscal year entered its final months, according to USDA data released Wednesday. The agricultural trade deficit, forecast to set a record this year, was already at $18.8 billion, with three months to go.
Exports to China totaled $22.8 billion through June, roughly three-quarters as much as at the same point last year. Shipments to Mexico of $22.3 billion were 5 percent more than a year earlier.
The USDA has forecast that Mexico — and Canada — will push China into third place among export markets this year. Food and ag shipments to Canada totaled $21.5 billion through June. Fiscal years begin each Oct. 1.
China, the largest customer in 2023, was buying markedly smaller amounts of U.S. soybeans and corn this year, said USDA analysts in May. The drop-off has continued into early August, according to USDA export sales data.
Meanwhile, the USDA has estimated that Mexico and Canada will buy record amounts of U.S. farm exports this year. Corn, soybeans, dairy products, and pork are the leading U.S. farm exports to Mexico.
The agricultural trade deficit was $17.2 billion in fiscal 2023, the largest ever. It was forecast to nearly double this year, to $32 billion. Exports are falling for the second year in a row due to the strong dollar and slow global economic growth. Imports are on the rise, driven by consumer demand for fresh fruits and vegetables, wine, beer, alcohol, coffee, cocoa, and sweeteners. USDA economists say the trade deficit will decline in the near term as the rest of the world catches up with the U.S. recovery from the pandemic.
The nine-month total for food and ag exports was $135.3 billion, and the import total was $154.1 billion.
The USDA is scheduled to update its estimate of agricultural trade this year and make its first forecast of trade in fiscal 2025 on Aug. 27.