Agricultural trade deficit could soon reach record highs. Is there cause for concern?

For the third time in five years, agricultural trade in the United States will be at a deficit — meaning it imports more than it exports.

As of November 2023, the U.S. imported $20 billion more in agricultural products than it exported this year, which would set a record for biggest deficit in a calendar year in nearly a century if the trend continues through the last month of 2023.

For some farmers, the year’s big deficit is a sign that trade has taken a hit and that other countries may be outtrading the U.S. However, some economists argue there are logical explanations behind what has created such an eye-popping deficit — including rising imports, a strong American dollar and basic supply and demand.

“Trade deficits aren’t something we should be inherently worried about,” said Bill Ridley, a professor at the University of Illinois Urbana-Champaign, who studies international trade.

Over the past five years, agricultural exports have climbed from $141 billion in 2019 to nearly $196 billion in 2022, according to data from the U.S. Department of Agriculture. In both 2020 and 2021, agricultural trade was at a surplus, with exports exceeding imports.