Facing a back-to-back decline in food and ag exports, Agriculture Secretary Tom Vilsack said on Tuesday the USDA would provide an additional $1.3 billion to build overseas demand for U.S. products and an additional $1 billion for global hunger relief. The USDA currently spends a combined $2.5 billion a year on those objectives.
Farm groups applauded the new funding and said the new farm bill should double funding for two programs — the Market Access Program and Foreign Market Development — that provide USDA cost-sharing money to promote ag exports. Vilsack drew the $2.3 billion from a USDA reserve fund with the blessing of Senate Agriculture Committee leaders.
“With this additional support, we can strengthen U.S. agriculture’s presence in existing markets, open up new market opportunities, and build on our relationships and connections to ensure that high-quality American agriculture and food products reach where they are needed in the world,” said Vilsack in an announcement from the World Food Prize symposium in Des Moines.
U.S. farm exports were forecast at $172 billion in the fiscal year that opened on Oct. 1, down by $3.5 billion from fiscal year 2023 and by $24 billion from the record set in 2022. Commodity prices are trending downward, and the United States faces increased competition in the world market. Brazil, for years the world’s largest soybean exporter, has surpassed the United States as the No. 1 corn exporter and is narrowing the U.S. lead in cotton exports.
Vilsack said $1.3 billion would be spent on a new Regional Agricultural Promotion Program, the successor to a cost-sharing program created during the pandemic to develop new markets for U.S. food and ag products and to mitigate the impacts of tariffs and trade barriers to overseas markets. The money will be “spread over several years” and include work in non-traditional markets, he said. Africa and Southeast Asia are regions with a rising middle class with money to spend on U.S.-grown food, said a USDA official. Regulations for the new program were expected to be in place by the end of this year or in early 2024.
Warfare and natural disasters have heightened the need for food aid worldwide. The USDA will spend $1 billion to buy and donate U.S.-produced commodities to alleviate hunger, said Vilsack. The expenditure will have the side effect of bolstering the farm sector, said the USDA.
Food and ag imports are rising at the same time exports are waning, so the United States is running an agricultural trade deficit estimated at $27.5 billion in the current fiscal year. Half of this year’s imports are horticulture products, such as fruits, vegetables, nuts, wine, beer, and distilled spirits. The United States grows only a portion of the fruits and vegetables that it consumes.
Due to population growth and America’s preference for fresh foods year-round, the country will be a food importer in the long run, said USDA analysts in 2022. “The highest-growth commodity sector by value is expected to be horticultural products, which are projected to expand by around 5 percent per year,” the agency projected.
U.S. exports of horticulture products will be worth about as much as grain exports this year, at around $39 billion, according to USDA estimates.
Food and ag exports generate 20 cents of each $1 of U.S. farm income.