The U.S. trade deficit for fresh produce will widen to $16.3 billion for fiscal year 2020, up 3% from fiscal year 2019 and up 15% compared with fiscal year 2018.
The U.S. Department of Agriculture issued its report on the Outlook for U.S. Agricultural Trade on Nov. 25. The USDA projected U.S. fresh produce exports for the year ending Sept. 30 2020 will reach $7.1 billion, while imports of fresh fruits and vegetables will reach $23.4 billion.
For all of U.S. agriculture, the USDA projects total exports for fiscal year 2020 at $139 billion, while U.S. imports of agricultural projects will reach $132 billion. That results in a projected trade surplus of $7 billion for fiscal year 2020, up from $4.5 billion in fiscal year 2019 but well off from $15.9 billion in fiscal year 2018.
The $7.1 billion forecast for fresh produce exports is steady compared with the August estimate, as the USDA said Canada and Mexico have been stable markets for U.S. shippers.
The USDA said a $1.7 billion gain in expected fiscal year 2020 imports compared to the agency’s August forecast was due to increased shipments of avocados, berries, and melons from Mexico.
Global growth slows
The forecast for world gross domestic product growth for 2020 has been revised downward to 1.5% from 1.6% in the August forecast, according to the USDA. U.S. growth forecasts remain unchanged, with 1.6% growth expected in 2019 and 1.3% for 2020, according to the report.
“Despite positive consumer sentiment, low unemployment rates, and strong year-over-year wage gains, growth has been moderated by continuing uncertainty in U.S.-China trade, Brexit, and slowing trade and investment globally,” the USDA report said.
With USMCA waiting for ratification in Canada and the U.S., the report said Canada and Mexico face “modest to unfavorable” per capita growth prospects in the near term.
In Canada, per capita growth is pegged at 0.1% for 2019 and at 0.4% in 2020. Meanwhile, the USDA said per capita growth in Mexico is forecast at -0.8% in 2019 and flat for 2020.
Ratification of USMCA will boost economic prospects for both Canada and Mexico, according to the USDA.
Latin American per capita growth is forecast for -0.4% in 2019 and 0.7% in 2020. The USDA predicts per capita growth in Asia and Oceania at 3.4% for 2019 and 3.3% for 2020, both 0.3% lower than the August forecast. Per capita GDP growth in the Euro Zone is forecast at 1% for 2019 and 0.9% for 2020