The United States typically exports more agricultural goods by value than it imports, but the value of imports has grown more rapidly than exports over the past decade, contributing to a negative trade balance in some years.
The U.S. was an annual net exporter of agricultural products from at least the 1970s through 2018, but since then has mostly been a net importer, and the gap is widening.
Agriculture has become more concentrated in large corporate farms rather than small independent farmers.
Is that trend responsible for the trade imbalance?
An extremely important open question. My guess is that it does.
E.g. Los Angeles up into the 70’s was surrounded by fields of citrus, wine grapes, and uncountable forms of “truck farms” growing everything from artichokes to zucchini (oh lord the glorious local tomatoes and strawberries of those days!!!). Los Angeles County was for decades one of the agricultural superpowers of the USA. Between the gross simplicity necessary to Agro-industry (plastic tomatoes if grown at all) and suburban conversion of stunningly rich lands to homes, that has vanished.
I edited this into this post as an example of Los Angeles once making far far more from agriculture than from Hollywood or Aerospace (warning, the jingle is wonderfully dangerously hooky)
Hard for me to see a correlation in that. In fact, farm productivity in the US has been increasing constantly (about 2% per year for decades) even as the number of family farms has diminished (indeed, I see a correlation there!)
The problem is that the value of, say, soybeans doesn’t increase apace with the value of, say, an iPhone or an EV from Korea. 2% a year is nice, but it can’t compare with the value of imports like flat screen TVs, microwaves, or all the pharma products now produced overseas with cheaper labor - especially in the ever increasing numbers that keep coming in and populating our store shelves.
I’d like to see the agri-giants tamed a bit, if only for cultural and historic reasons, but the truth is that farming itself is a big, expensive business. You can’t get into it now without a couple million dollars worth of combines, trucks, land, labor, and buildings. The real “family farm” of a few years ago is no more equipped to compete than is the assemble-cars-by-hand shop of the 1900’s
The leading U.S. agricultural exports are grains and feeds, soybeans, livestock products, tree nuts, fruits, vegetables, and other horticultural products.
Grains and feeds, soybeans…
Perhaps we should rethink the current practice of converting 40% of the US corn crop into ethanol? If there is a reduction in exports, it isn’t because of a lack of domestic production.
Corn prices basically increased up to 2014, then dropped by half until covid and then Ukraine. The value of US ag exports increased until 2014, dropped or went sideways until 2021 when they went up again.
In reply to no particular person, I heard a guy on the radio yesterday that was a soybean farmer in IL. He stated that the US tariffs had previously caused China, our largest soybean export market, to switch much of their buying to Brazil.
This farmer was very worried that additional tariffs were going to kill soybean exports and ruin soybean farming.
A related document:
Brazil’s 2023 soybean exports reached a record of 3,744 million bushels, up 29% from the previous year as Brazilian production hit a new record. Meanwhile, the United States’ shipments declined 14% to 1,789 million bushels in the same period. The United States and Brazil are major competitors and together supply over 80% of soybean global exports, while China accounts for about 60% of total soybean imports.
Thanks for the link. Some tidbits of interest in it on US soybeans:
Over the past two decades, U.S. soybean exports have increased 94%, from 922 million bushels in 2004 to 1,789 million bushels in 2023…The roughly doubling of exports occurred over the first decade and stagnated in the second decade…
The decreased prominence of the U.S. in global soybean markets reflects in part the growth of domestic soybean demand. Soybean crush capacity in the United States has been steadily growing since 2021…
This expansion is primarily fueled by the increasing demand for soybean oil, particularly from the renewable diesel sector. The US Environmental Protection Agency (EPA) continues to enforce biofuel blending targets for refiners and gasoline or diesel fuel importers, further driving this demand.
As Pete wrote about corn, “If there is a reduction in exports, it isn’t because of a lack of domestic production.”
I think we know China will respond to tariffs by putting tariffs mostly on US agriculture. Especially soybeans and pork but on most others too including beef, poultry, corn, etc. They will buy instead from competitors and US agriculture will lose export markets. Prices will fall a bit.
But if they buy from Brazil or Argentina, their other customers may end up buying from the US. Perhaps a new balance will be achieved.
Labor costs have to be a major consideration. US farm land remains very productive and mechanized farming often helps keep labor requirements down for many crops. But not for all crops. But tariffs help protect domestic producers.
Global Soybean Stocks Declined on Lower Production and Higher Crush in South America
Global soybean stocks in marketing year (MY) 2024/25 are forecast down 4.0 million metric tons to 124.3 million metric tons on lower production. Soybean production is lowered to 420.8 million metric tons with decreased production in both Argentina and Paraguay. Soybean yields were cut due to unfavorable weather conditions in the major soybean growing regions during January. Brazil’s soybean production forecast is unchanged and stands at 169.0 million metric tons.
Gonna need more stills to make a LOT MORE CORN WHISKEY !! Get the retail price down to $2 per box (remember the historic image of booze in a box?). ROFLMAO !!!
The situation predates a 20% tariff. As noted above, US soybean exports have been level for the last decade while production has increased. We’ve been using our soybeans and corn for fuel.
It isn’t about our production, it is about the lack of demand for exports. As the farmer stated, he is concerned that this will DECREASE production. China has been growing their imports of soybean - from Brazil. They still import some from us but retaliatory tariffs are likely to reduce that further.
Indeed, it could. But you and I are focused on different things. You are talking about current tariffs and proposed tariffs. The graph in the OP shows that the value of US ag exports basically leveled off after 2011, 14 years ago.
Increased tariffs by China can switch who supplies China, but it doesn’t change global demand and it doesn’t change US fuel demands.
If world production is constant if China’s tariffs shift their use to another supplier, US product goes to their former buyers.
The problem comes when Brazil or others take the opportunity to increase production. Probably by converting jungle to farm land. Then the US farmer loses market share.
Increasing demand in China encourages investors to finance increased production.
World production is not constant. Heck, demand is not constant. Chinese demand has significantly increased (as stated up thread) but all that extra demand is going to Brazil.
Look, I am not a famer but when a “deep red” farmer says they are worried, I take his word for it. He certainly knows his business better than any of us on this thread.
Farmers are always worried.
If production is low then they won’t have much to sell. If production is high then prices drop.
True, and in general the trend for both is up. Here in the US production is up over the last decade but exports aren’t. However, what is up here in the US is demand for corn and soybeans used as fuel.
That article was from 2019. Just a few years later (with tariffs still in place, IIRC) we read about record levels:
