New monthly trade data from the Department of Agriculture shows a record monthly trade deficit for agriculture. Veronica Nigh, American Farm Bureau Federation Senior Economist, shares the numbers.
“Well, the new trade data puts us out through August of 2023. And in August, we had the largest monthly trade deficit that we’ve ever had in US agricultural trade. We had almost 12 and a half billion dollars in exports, a little over 16 billion in imports, which means we had a trade deficit of over $3.6 billion in a single month.”
Nigh says the strong U.S. dollar is behind the deficit.
“The strong interest rates that we’ve seen in the United States over the last year and a half trying to combat inflation is really leading to a strong U.S. dollar. And that strong U.S. dollar makes imports relatively less expensive, but it makes it difficult for our exports to compete globally because our products are priced in a relatively expensive dollar.”
Nigh adds that the strong dollar means agriculture export values are lower, and an increase in some imports.
“Overall, U.S. ag export value is down by about nine percent. But when we break it out, what we see is that the vast majority of that decreases in major bulk products which are down 16 percent relative to the same time last year, whereas high value products are only down by four percent. When we look at imports and where we’re seeing those import numbers pop is in fresh and frozen vegetables, which are up over 15 percent this year compared to last year.”