Farm Bureau raises possibility U.S. ag will have negative trade balance in 2020
The value of U.S. agricultural exports has exceeded imports for decades, but in the first six months of 2020, there is a $2.955 billion negative balance, the American Farm Bureau Federation said in a Market Intel report late last week.
This balance is down sharply from January-June 2019, when the balance was positive $27 million, Farm Bureau economist Veronica Nigh wrote.
“The difference between the trade balance for the first six months of 2020 and that same time period in 2017 is negative nearly $9.4 billion,” Nigh wrote.
“This is a relevant statistic because 2017 is largely regarded as the last ‘normal’ year in agricultural trade, before the U.S. and various trade partners, including China, began trade retaliatory tariffs. the year-over-year decline from January-June 2020 was fueled by a decrease of $2.1 billion, or 3%, in exports, while imports rose $842 million, or 1%.”
“For an industry accustomed to achieving a trade surplus year after year, a trade deficit of nearly $3 billion over the first six months of 2020 is eye-popping,” Nigh concluded.
“The longer COVID-19 impacts consumers worldwide, the more unlikely it is that exports will make up for lost sales thus far. Could 2020 be the first year in recent memory that U.S. agriculture experiences a trade deficit? Only time will tell.”