Agriculture is a perennial bright spot in the U.S. balance-of-trade picture because ag exports are consistently larger than imports. But that reliable trade surplus is forecast to narrow to $14.5 billion in fiscal 2019, which would be the smallest surplus since the $12.2 billion of 2007, say USDA economists in Amber Waves magazine.
“Significant declines in projected exports to China” are a key factor for the shrinking surplus, write economists Alex Melton and Bryce Cooke. China is forecast to buy $9 billion worth of U.S. ag exports this year, down by $3 billion from the August estimate and far below the $16.3 billion of fiscal 2018 and the $21.8 billion of fiscal 2017. The Sino-U.S. trade war began last summer, during the final months of fiscal 2018.
Meanwhile, U.S. food and ag imports are forecast to hit a record $127 billion. “The high U.S. imports are supported by strong consumer spending and favorable business investments, which are expected to continue through 2019,” say Melton and Cooke. Horticultural products, such as fruits, vegetables, nuts, wine, and flowers, make up nearly half of all U.S. ag imports.