USDA forecasts record decline in exports to China

The US Department of Agriculture (USDA) has improved the country’s trade deficit forecast, but soybean exports and shipments to China continue to show a sharp decline amid trade conflicts.

USDA experts presented an updated quarterly forecast, which states that the US trade deficit in fiscal 2025 will be at $47 billion, which is $2.5 billion less than the previous estimate in June.

The positive dynamics are expected to continue in fiscal 2026. In the period that begins on October 1, the deficit may decrease to $41.5 billion. The main reason is the expected decline in US agricultural imports, which will outpace the rate of decline in exports.

Despite the overall optimism of the forecast, certain sectors are experiencing a serious crisis. The most striking example is soybean exports. According to forecasts, their value will collapse from $24.2 billion in fiscal 2024 to $18.3 billion in 2026.

The main reason is said to be the protracted trade war with China. According to reports, Chinese buyers have not yet placed orders for the new crop of soybeans. As a result, U.S. agricultural exports to China are forecast to collapse from a record $25.7 billion in 2024 to a disastrously low $9 billion in 2026.

This figure would be the worst since 2007 and will lead to China, once the largest market, losing ground not only to Mexico and Canada, but also to the European Union, Japan and South Korea.

The new forecasts come amid disappointing data for the first half of 2025. As previously reported, the U.S. agricultural trade deficit reached a record $28.6 billion in that period, up 14% from the previous year. This underscores the profound structural changes in global trade and the declining dominant role of American farmers.

Experts say the window of opportunity to turn around soybeans is limited. Traditionally, 80 to 90 percent of exports to China occur between November and April. Without urgent purchases from China, U.S. exporters will struggle to catch up before the Brazilian supply season begins, and they will face a long winter with no sales prospects.

Tags: China, soybean, imports