The U.S. agricultural trade surplus will shrink to $13.5 billion this fiscal year, the smallest in at least six years, as exports stagnate at $141.5 billion and imports tick upward to $128 billion, said the USDA in a quarterly forecast. Farm exports are a consistent bright spot in the U.S. trade picture and generate at least 20 cents of every $1 in farm receipts.
The export forecast, which was unchanged from a November estimate, shows the impact of the trade war with China. Sales would be down slightly from the $143.4 billion of fiscal 2018, when the trade war began. China was forecast to import $9 billion worth of U.S. farm goods this year, compared to its average of $21 billion a year before the trade war. Although exports are down, 2019 still would rank as the No. 3 year for exports.
Horticultural products account for roughly half of U.S. ag imports and are the primary reason the USDA raised its forecast of ag imports by $1 billion from the November forecast. The USDA raised its forecast of fresh and processed fruit by $700 million, to $19.4 billion. Meat imports were also projected to be larger. Mexico and Canada are the two largest sources of U.S. food and ag imports, generating more than $1 of every $3 in sales.