U.S. agricultural exports in fiscal year (FY) 2025 are forecast at $169.5 billion, down $4.0 billion from the revised forecast for FY 2024. This decline is primarily driven by lower unit values of soybeans, corn, and cotton, as well as lower volumes of beef.
Soybean exports are projected down $1.5 billion to $22.9 billion; corn exports are forecast to fall $900 million to $12.2 billion, as lower unit values more than offset higher volumes in both crops. Cotton exports are forecast $900 million lower to $4.5 billion due to softening unit values while volumes are unchanged.
Beef exports are forecast at $8.4 billion, down $1.0 billion from FY 2024, as lower U.S. production reduces exportable supplies. Overall livestock, poultry, and dairy exports are projected at $38.6 billion, down $100 million from FY 2024, as the decline in beef exports is mostly offset by higher exports of pork, poultry, variety meats, and dairy products.
Horticultural exports are projected to rise by $1.2 billion to a record $41.5 billion due to higher exports across all categories. Ethanol exports are forecast at $4.3 billion, unchanged from the revised FY 2024 projection.
Agricultural exports to Mexico are forecast at $29.2 billion, down $100 million from FY 2024. The export forecast to Canada is unchanged at $28.9 billion. Mexico and Canada are projected to remain the first and second largest U.S. agricultural markets, respectively. Agricultural exports to China are forecast at $24.0 billion, $3.0 billion lower than the revised FY 2024 estimate, driven by reduced import demand, strong competition, and lower unit values of key U.S. exports.
FY 2024 export forecast is at $173.5 billion, up $3.0 billion from the May projection, largely due to higher horticultural and grain exports.
U.S. agricultural imports in FY 2025 are forecast at $212.0 billion, $8.0 billion higher than the revised FY 2024 estimate, largely due to rising imports of horticultural as well as sugar and tropical products. For FY 2024, agricultural imports are forecast at $204.0 billion, up $1.5 billion from the May projection, buoyed by the continued strength of the U.S. economy into late FY 2024. The forecasts in this report are based on policies in effect at the time of the August 12, 2024, World Agricultural Supply and Demand Estimates (WASDE) release.
Economic Outlook: Widespread Economic Growth as Inflation Subsides
World per capita Gross Domestic Product (GDP) growth is expected to reach 3.2 percent in calendar year (CY) 2024 and continue at that pace through CY 2025. Much of the global economy sees easing inflation in goods and increasing wages supporting consumer spending. However, global GDP growth is subdued by continued strong inflation for services and continuing tight monetary policy as many central banks wait on the United States before relaxing interest rates to avoid shocks to investment that could adversely affect exchange rates. In the key emerging markets of Brazil, Russia, India, Indonesia, and China, per capita GDP growth is expected to accelerate to 4.9 percent on average in CY 2024, slowing slightly in CY 2025 to 4.4 percent.
The U.S. dollar is expected to continue to appreciate, on average, against other currencies by 2.2 percent in CY 2024 and 0.8 percent in CY 2025, maintaining downward pressure on U.S. exports. Further impacting trade are surging ocean freight rates. High rates have been mainly associated with containerized shipping, which are commonly used for the high value agricultural products that comprise many U.S. agricultural imports. Baltic Dry bulk freight rates have been less impacted. The surge in rates is due to a limited supply of containers caused by rerouting around the Red Sea and Panama Canal, relatively strong global demand, and an early busy season as purchasing lead times increase to avoid potential supply chain delays, and anticipatory purchases are made to curb uncertainty regarding potential imposition of new tariffs. Labor talks at U.S. ports on the East Coast and Gulf of Mexico are another risk for shippers already grappling with longer transit times and higher costs.
U.S. GDP is expected to rise 2.7 percent in CY 2024. However, growth is forecast to slow to 1.9 percent in CY 2025. CY 2024 growth has been buoyed by robust consumer spending with low unemployment and wage growth that outpaces inflation. The unemployment rate in CY 2024, which was measured at 4.3 percent in July 2024 by U.S. Department of Labor, Bureau of Labor Statistics (BLS), has been rising steadily from 3.9 percent in January. The U.S. Department of Labor, BLS reported that the annual inflation rate for the United States was 2.9 percent for the previous 12 months ending in July 2024, down from 3.0 percent reported the previous month. Though inflation is waning, it is slow to move and still above the 2-percent target. The U.S. Federal Reserve has stated that they see inflation as normalizing and are now returning focus to their dual mandate of optimizing employment as well as inflation in setting the Federal Funds Interest Rate which has been unchanged since August 2023 at 5.3 percent. U.S. GDP growth is expected to decline in CY 2025 as interest rates remain high, inhibiting business investment and employment growth.
In other North American countries (i.e., Canada and Mexico), the expected real GDP growth is lower relative to the United States in CY 2024. Mexico’s GDP growth forecast for 2024 is unchanged from last quarter at 2.4 percent. However, tightening fiscal policy, slowing job growth, and increasing unemployment are expected to result in a slowing of GDP growth in CY 2025 to 1.4 percent. Rising interest rates continue to have a lagged effect on Canada’s economy, leading to lower GDP growth relative to the United States. As such, the real GDP growth forecast for Canada in CY 2024 is 1.2 percent. The CY 2025 forecast suggests more aggressive growth especially in relation to the rest of North America at 2.3 percent.
Real GDP growth in Asia and Oceania is expected to be 4.5 percent in CY 2024 and 4.3 percent in CY 2025 with China and India accounting for almost half of the global GDP growth according to the International Monetary Fund. Uncertainty still looms as China’s economy shifts from growth based, mainly on production and exports, to domestic demand with slowing population growth leading to reduced production capacity. Japan’s economy, which had been insulated from inflation relative to the rest of the globe, has started to tighten monetary policy to combat the recent depreciation of the yen.
The Eurozone and Central Asia’s economies are forecast to continue to grow on average, but at a slightly slower pace than other regions at 1.2 percent in CY 2024 and increasing to 1.8 percent in CY 2025 as wage growth promotes steady inflation for services even though prices for goods are moderating. Unemployment in the Eurozone is reported at 6.5 percent for June 2024, stable with the previous year according to the European Commission.
As has been the case in recent years, the forecast for South America is the result of widely varying expectations for its constituent countries. Tight monetary policy in Argentina appears to be easing inflation, which is down from the year-over-year high of 292.2 percent in April 2024 to 263.4 percent in July 2024. Assuming this trend of recovery will continue, GDP growth is expected to increase from –2.8 percent in CY 2024 to 5.0 percent in CY 2025. Alternatively, Brazil, which has become one of the United States’ most prominent competitors in agricultural exports, is expected to have moderate GDP growth of 2.2 percent in CY 2024 and 2.1 percent in CY 2025 after steady annual slowdowns from a recent peak of 4.8 percent growth in CY 2021.
The Middle East and North Africa are expected to grow at 2.8 percent in CY 2024, a forecast tempered by the Organization of the Petroleum Exporting Countries (OPEC) and participating non-member countries’ agreement to extend cuts to oil production by 2.2 million barrels per day through September 2024 and 3.7 million barrels per day through December 2025. Considering the end of the first production cut and strong economic output for other sectors in the region, GDP is expected to grow by 4.2 percent in CY 2025. Sub-Saharan Africa is forecast to increase GDP by 3.8 percent in CY 2024 and 4.0 percent in CY 2025 as many countries ease monetary policy in response to disinflation.