The long-standing US trade surplus in farm goods will disappear in fiscal 2005 with agricultural imports of $56 billion matching exports, largely due to a weaker US dollar, the US Agriculture Department said on Monday. For years, the US farm community has boasted a surplus in agricultural trade that was one of the few bright spots in the overall American trade profile, where steep and growing deficits have economists increasingly worried.
American farmers will export $56 billion worth of agricultural products in fiscal 2005 which began on October 1, down from the $57.5 billion projected in August, the USDA said in its quarterly trade outlook.
Exports would drop mainly due to large US and foreign crops that have lowered the value of those goods and made for more intense competition among exporting countries, USDA said.
Agricultural imports will continue their "40-year upward trend that will result in balanced agricultural trade in 2005," the USDA said.
The weaker US dollar was largely to blame for pushing up the value of food imports, USDA said, while import volume forecasts were unchanged from earlier this year.
Even so, USDA said Americans would continue consuming increasing amounts of foreign fruits, vegetables, wines and beer, contributing to the new balance in agriculture trade.
In fiscal 2004, the United States imported $52.7 billion worth of farm goods, while exporting $62.3 billion worth, the USDA said.
USDA noted that prices of imported foods were pushed up also by higher energy costs for transporting those goods.
China's rapidly growing economy has been a magnet for US farm goods, especially soybeans and cotton, in recent years. But in its latest forecast, USDA predicted a downturn in exports to Asia, especially China.