Category: Trade

The August 2025 Outlook for U.S. Agricultural Trade provides a snapshot of the current challenges and opportunities in global markets (USDA, 2025a). The quarterly report has long been a valuable tool for understanding how international trends affect the U.S. farm economy. In the past, it included both data and written commentary to explain possible causes behind trade shifts. However, the May 2025 report sparked controversy when its release was delayed. The issue centered on explanatory text that linked rising agricultural trade deficits to tariffs (Ingwersen & Douglas, 2025). As a result, the USDA removed the commentary and now publishes only data tables. This change has raised concerns about transparency and the loss of expert interpretation that helped make sense of complex trade dynamics.

The August report shows that the U.S. will continue to import more agricultural goods than it exports. However, the projected trade deficit for fiscal year (FY) 2025—running from October to September—was revised downward from $49.5 billion in the May report to $47.0 billion. This adjustment was driven by an upward revision in forecasted exports, while the import forecast remained unchanged from May at $220 billion. For FY2025, exports are now expected to reach $173 billion, with imports holding at $220 billion.

These revisions raise important questions. Are they justified based on the available data? Most notably, is there clear evidence of increased export activity to support the upward revision? And given current trends, should the import forecast have been adjusted as well—either upward or downward? A closer look at recent trade is needed to assess whether these changes reflect actual market conditions or optimism. 

Year-to-date (October to June) export values are reported in Table 1. The data suggest that the value of agricultural exports will remain relatively flat. During the first three quarters of the fiscal year, export values increased slightly from $135.0 billion in 2024 to $135.7 billion in 2025, which is a modest 0.6% rise. However, the volume of exports grew significantly, increasing from 162.4 million metric tons (MMT) to 175.9 MMT, an 8.3% increase. This growth in quantity was offset by a 7.2% decline in average prices (unit value), which fell from $831/MT to $772/MT, suggesting lower prices per unit across many commodities. Depending on prices, the upward revision in the export forecast could be justified despite current trade tensions (USDA, 2025b). 

Assuming fourth-quarter imports in FY2025 will follow patterns seen in recent years, available data suggest that total imports could reach $223 billion. This supports the decision to hold the official import forecast steady at $220 billion given the small $3 billion difference (USDA, 2025b). If ongoing trade tensions continue, it would not be surprising if actual imports were lower than $220 billion. 

Figure 1. U.S. Agricultural Imports: FY2021-FY2025

Table 1. U.S. Agricultural Exports: FY2024 and FY2025 (year-to-date: October – June)

Exports	Oct. – June 2024	Oct. – June 2025	% Change
Value ($ billion)	$135.0	$135.7	0.6%
Quantity (MMT)	162.4	175.9	8.3%
Unit Value ($/MT)	$831.1	$771.5	-7.2%

Reference

U.S. Department of Agriculture (USDA). 2025a. Outlook for U.S. Agricultural Trade: August 2025. https://www.fas.usda.gov/sites/default/files/2025-08/AES-133.pdf

U.S. Department of Agriculture (USDA). 2025b. Global Agricultural Trade System (GATS). Foreign Agricultural Service, Washington, D.C. https://apps.fas.usda.gov/GATS/default.aspx

Ingwersen, Julie and Leah Douglas. 2025. “USDA redaction of trade analysis causes concern about report integrity” Reuters. https://www.reuters.com/world/us/usda-redaction-trade-analysis-causes-concern-about-report-integrity-2025-06-06/

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Muhammad, Andrew. “Outlook for U.S. Agricultural Trade in 2025: Exploring the Recent August Forecasts.” Southern Ag Today 5(36.4). September 4, 2025. Permalink

Since “Liberation Day” back on April 1, 2025, and even before that, trade has been a major news topic.  The current administration’s strategy to use tariffs and the size of the U.S. economy as leverage to change trade relationships with the rest of the world has generated a lot of uncertainty in the market.  Both ag and non-ag industries have reacted to the almost daily trade talk news. Arguments for and against tariffs are all over the place, with the main question being, who is going to pay for the tariff hikes? 

To better address this question, it is important to differentiate between short- and long-term effects as the market adjusts to news regarding tariffs. Tariffs are a tax imposed on imported goods and services.  Sellers will do their best not to pass the tax to the consumers as that will probably reduce the quantity demanded and potentially reduce their market share to competitors less affected by tariffs.  Therefore, to keep their market share, sellers might absorb some of the impact of the tariffs in the short run waiting for the results of trade negotiations.  However, if sellers believe that the new tariff rates will remain in place for the long run, they might decide to pass the cost of the tariffs to consumers as their profit margins are probably reduced.

To illustrate, Table 1 shows the monthly percent changes in CPI for all urban consumers, which shows that there has not been a major change in CPI after “Liberation Day.”  The latest figures for July 2025 show that the CPI for all items is 0.2 percent, while food remained unchanged and energy decreased 1.1 percent.  In addition, the un-adjusted 12-month CPI ending in July 2025 shows 2.7 percent for all items, which is within normal ranges, especially coming off a historic high inflation over the last couple of years.  Food items went up 2.9 percent, with the largest increase being in food away from home at 3.9 percent, while energy went down by 1.6 percent. Will this continue over the intermediate- and long-run? Only time will tell.

Table 1. Percent Changes in CPI for All Urban Consumers (CPI-U): U.S. city average

	Seasonally adjusted changes from the preceding month
	Jan. 2025	Feb. 2025	Mar. 2025	Apr. 2025	May2025	Jun. 2025	Jul. 2025	Un-Adjusted 12-month*
All Items	0.5	0.2	-0.1	0.2	0.1	0.3	0.2	2.7
Food	0.4	0.2	0.4	-0.1	0.3	0.3	0.0	2.9
Food at home	0.5	0.0	0.5	-0.4	0.3	0.3	-0.1	2.2
Food away from home	0.2	0.4	0.4	0.4	0.3	0.4	0.3	3.9
Energy	1.1	0.2	-2.4	0.7	-1.0	0.9	-1.1	-1.6
Energy commodities	1.9	-0.9	-6.1	-0.2	-2.4	1.0	-1.9	-9.0
Gasoline (all types)	1.8	-1.0	-6.3	-0.1	-2.6	1.0	-2.2	-9.5
Fuel oil	6.2	0.8	-4.2	-1.3	0.9	1.3	1.8	-2.9
Energy Services	0.3	1.4	1.6	1.5	0.4	0.9	-0.3	7.2
Electricity	0.0	1.0	0.9	0.8	0.9	1.0	-0.1	5.5
Utility (piped) gas service	1.8	2.5	3.6	3.7	-1.0	0.5	-0.9	13.8
All Items Less Food and Energy	0.4	0.2	0.1	0.2	0.1	0.2	0.3	3.1
Commodities Less Food and Energy	0.3	0.2	-0.1	0.1	0.0	0.2	0.2	1.2
New vehicles	0.0	-0.1	0.1	0.0	-0.3	-0.3	0.0	0.4
Used cars and trucks	2.2	0.9	-0.7	-0.5	-0.5	-0.7	0.5	4.8
Apparel	-1.4	0.6	0.4	-0.2	-0.4	0.4	0.1	-0.2
Medical care commodities	1.2	0.1	-1.1	0.4	0.6	0.1	0.1	0.1
Services less energy services	0.5	0.3	0.1	0.3	0.2	0.3	0.4	3.6
Shelter	0.4	0.3	0.2	0.3	0.3	0.2	0.2	3.7
Transportation services	1.8	-0.8	-1.4	0.1	-0.2	0.2	0.8	3.5
Medical care services	0.0	0.3	0.5	0.5	0.2	0.6	0.8	4.3
*Ended July 2025 Source: Consumer Price Index Summary, U.S. Bureau of Labor Statistics (BLS)

References

Bureau of Labor Statistics. “Consumer Price Index Summary.” Economic News Release. Published August 2025.

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Ribera, Luis, and Landyn Young. “How is the Consumer Price Index Impacted by Trade Talks.” Southern Ag Today 5(34.4). August 21, 2025. Permalink

Brazil is shifting from a bulk commodity supplier to a premium beef exporter. In June 2025, it reached a turning point: certification as free of foot-and-mouth disease (FMD) without vaccination (PAHO, 2025). The upgrade opened doors to high-value markets like Japan and South Korea. A Japanese delegation visited days later, and a deal with Vietnam quickly followed (Brasil, 2025).

While expanding access to Asia, Brazil also made significant inroads into the U.S. market. In May alone, it shipped 175 million pounds of beef to the U.S., five times the volume of May 2024. As shown in Figure 1, Brazilian beef exports more than doubled year-to-date, driving a 60% surge in total U.S. beef imports (USDA–ERS, 2025).

The U.S. imposed a 50% tariff on imports from Brazil in July. With existing duties, the effective rate jumped to 76.4%. Brazil’s top exporters, Minerva, JBS, and Naturafrig, paused shipments and redirected product to Asia and the Middle East (Reuters, 2025a). Industry losses could top $1 billion in the second half of 2025 (Reuters, 2025b). The U.S. also launched a Section 301 investigation into Brazil’s trade practices (USTR, 2025). Though nearly 700 Brazilian products were exempted, beef remained on the list (The White House, 2025).

At the same time, the U.S. reinforced its trade presence in Asia, signing new agreements with Japan, the Philippines, and Indonesia. Figure 2 shows Asia remains the top market for U.S. beef exports (USDA–ERS, 2025).

While U.S. beef continues to command a premium, high prices and limited supply may create openings for Brazil in select Asian markets. With lower costs and upgraded health credentials, Brazil could appeal to buyers seeking value without sacrificing quality. Brazil’s pivot toward premium exports positions it to compete on perceived value, not just price. Still, U.S. beef holds strong brand recognition, deep trade ties, and a track record of consistency, advantages that remain critical in Tokyo, Seoul, and Hanoi.

Figure 1. Year-to-date U.S. Beef Imports by Volume (million pounds) and Origin, January-May 2024 and 2025 

Figure 2. U.S. Beef Exports by Volume (metric tons) and Countries, 2020 to 2024 

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References

ASBIA – Associação Brasileira de Inseminação Artificial. (2025). Anuário ASBIA 2025. https://asbia.org.br/wp-content/uploads/Anuario/ASBIA_anuario_2025.pdf

Brasil. Presidência da República. (2025, April 1). President Lula announces opening of Vietnam’s market to Brazilian beef. https://www.gov.br/planalto/en/latest-news/2025/04/president-luiz-inacio-lula-da-silva-announces-opening-of-vietnams-market-to-brazilian-beef

Datamar News. (2025, July 31). Possible opening of Japanese market to Brazilian beef will apply only to five states. https://datamarnews.com/noticias/possible-opening-of-japanese-market-to-brazilian-beef-will-apply-only-to-five-states/

Office of the United States Trade Representative. (2025, July). USTR announces initiation of Section 301 investigation of Brazil’s unfair trading practices. https://ustr.gov/about/policy-offices/press-office/press-releases/2025/july/ustr-announces-initiation-section-301-investigation-brazils-unfair-trading-practices

Pan American Health Organization. (2025, June 6). Bolivia and Brazil certified free of foot-and-mouth disease without vaccination. https://www.paho.org/en/news/6-6-2025-bolivia-and-brazil-certified-free-foot-and-mouth-disease-without-vaccination

Reuters. (2025a, July 30). U.S. tariffs prompt Brazilian meatpackers to reassess beef exports. https://datamarnews.com/noticias/u-s-tariffs-prompt-brazilian-meatpackers-to-reassess-beef-exports-says-abiec/

Reuters. (2025b, July 29). Brazil beef-packers estimate $1 billion in losses if U.S. tariffs apply. https://www.reuters.com/world/americas/brazil-beef-packers-estimate-1-billion-losses-if-us-tariffs-apply-2025-07-29/

The White House. (2025, July 30). Addressing Threats to The United States by The Government of Brazil. The White House. https://www.whitehouse.gov/presidential-auctions/2025/07 /addressing-threats-to-the-us/

U.S. Department of Agriculture, Economic Research Service. (2025, July 17). Livestock, dairy, and poultry outlook: July 2025 (LDP-M-373). https://www.ers.usda.gov/publications/pub-details/?pubid=106890

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Calil, Yuri, and Felipe Martins Moreira. “U.S.–Brazil Beef Trade at a Crossroads.” Southern Ag Today 5(32.4). August 7, 2025. Permalink

In a recent Southern Ag Today article, Muhammad et al. (2025) explored whether Brazil can compete with the U.S. in Japan’s premium beef market. They found Brazil has the volume but questioned the quality. This article digs deeper, showing how advances in genetics and feeding systems may close the gap.

Two key forces shape beef quality: genetics and nutrition. Historically, Brazil relied on grass-fed Nellore cattle (Bos indicus), which yield leaner, less marbled meat. However, change is underway.

Crossbreeding with British breeds such as Angus is increasing rapidly. Angus semen accounted for 49% of all beef semen sales in 2021 (USDA–FAS, 2021). In 2024, British breeds made up a third of sales, driven by demand for marbling and tenderness (ASBIA, 2024).

Meanwhile, Nellore genetics are also improving. Breeding programs have targeted carcass quality for over two decades. In 2024, more than 14.6 million beef cows, 22.3% of the national beef herd (Figure 1), were artificially inseminated (ASBIA, 2025). Over 420,000 purebred Zebu calves were registered that year, reflecting long-term investments in breeding (ABCZ, 2024).

Nutritional gains have kept pace with advancements in genetics. Brazil rapidly expanded its feedlot systems, especially in the central-west and southeast regions. These enable grain finishing, improving marbling and consistency, key traits for markets like Japan. In 2024, Brazil had over 8 million head in feedlots (Figure 2), representing a 25% increase in five years (DSM-Firmenich, 2024). In 2023, feedlot-finished cattle made up 21.3% of all beef slaughter, underscoring the growing role of confinement (CNA, 2024). Advances in mineral nutrition, feed conversion, and precision feeding have further improved carcass yield and quality.

Brazil is no longer just a volume player. Upgrades in genetics, nutrition, and feedlot systems are reshaping its beef industry. It’s increasingly meeting premium standards. The U.S. still leads, but Brazil is narrowing the gap on quality.

Figure 1: Number and Percentage of Beef-Breeding Cows Inseminated in Brazil 2014-2024 

Figure 2. Cattle on Feedlots in Brazil 2014-2024

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Referneces

ABCZ – Associação Brasileira dos Criadores de Zebu. (2024). Estatísticas do Registro Genealógico – RGN. https://www.abcz.org.br/produtos-e-servicos/area-tecnica/registro-genealogico/estatisticas

ASBIA – Associação Brasileira de Inseminação Artificial. (2024). Index ASBIA 2024 – Beef cattle semen sales by breed. https://asbia.org.br/index-asbia/

ASBIA – Associação Brasileira de Inseminação Artificial. (2025). Anuário ASBIA 2025. https://asbia.org.br/wp-content/uploads/Anuario/ASBIA_anuario_2025.pdf

CNA – Confederação da Agricultura e Pecuária do Brasil. (2024, August 5). Expectativa de retorno do confinamento em 2024 frente ao cenário de custos [Technical report]. https://www.cnabrasil.org.br/publicacoes/expectativa-de-retorno-do-confinamento-em-2024-frente-ao-cenario-de-custos

DSM-Firmenich. (2024). Panorama do Confinamento 2024 [Unpublished report].

Muhammad, A., Martinez, C., & Hossen, M. D. (2025, March 6). Market showdown: U.S. beef faces new challenges in Japan amid Brazilian reentry. Southern Ag Today, 5(10.4). https://southernagtoday.org/2025/03/06/market-showdown-u-s-beef-faces-new-challenges-in-japan-amid-brazilian-reentry/

U.S. Department of Agriculture – Foreign Agricultural Service. (2021). The Brazilian bovine genetics market and U.S. exports [PDF]. https://usdabrazil.org.br/wp-content/uploads/2021/03/The-Brazilian-Bovine-Genetics-Market-and-US-Exports_Brasilia_Brazil_03-01-2021-1.pdf

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Moreira, Felipe Martins, and Yuri Calil. “Will Brazil Close the Quality Gap with U.S. Beef in Japan?” Southern Ag Today 5(30.4). July 24, 2025. Permalink

According to the most recent data on U.S. and China reciprocal tariffs, as reported by the Peterson Institute for International Economics (Bown, 2023), U.S. tariffs on imports from China currently stand at 51.1%, while Chinese tariffs on U.S. goods are at 32.6%. This is an improvement compared to the tariff levels in late April and early May that exceeded 100%. However, these tariffs have had a significant impact on U.S. agricultural exports to China. China is among the top five export destinations for U.S. agricultural exports (Mexico, Canada, China, Japan, and South Korea). China experienced the most significant decrease among the top markets, with exports plummeting by 55.0%, from $11.1 billion in 2024 (YTD: January – May) to just $5.0 billion in 2025 (See Table 1). This sharp drop highlights the impact of geopolitical tensions, tariff disputes, and shifting global supply chains.

This Monday (July 7, 2025), President Trump announced on Truth Social that the U.S. will impose a 25% tariff on imports from Japan and South Korea, effective August 1^st (Fortnam, 2025). This move marks a significant shift in trade policy, targeting two major allies and the 4th and 5th largest destination markets for U.S. agricultural exports. While the tariffs are intended to address bilateral trade deficits and protect U.S. industries, this decision is likely to strain diplomatic relations and could have a significant impact on U.S. agricultural exports similar to what we have experienced with China. Unlike China, U.S. agricultural exports to Japan and South Korea showed positive growth in 2025 YTD. Japan’s imports increased by 6.0%, rising from $5.5 billion to $5.8 billion in 2025. South Korea had the highest growth among the top markets, with a 15.8% increase, from $3.8 billion to $4.4 billion in 2025 (See Table 1). This surge reflects South Korea’s expanding market for U.S. agricultural goods, driven by favorable trade agreements and growing consumer demand. 

U.S. agricultural exports to Japan and South Korea totaled $11.9 billion and $8.5 billion in 2024, respectively. Japan is a major market for U.S. corn ($2.7 billion), beef products ($1.9 billion), pork products ($1.4 billion), and soybeans ($1.0 billion). South Korea is a significant market for U.S. beef products ($2.2 billion), pork products ($0.7 billion), and corn ($0.7 billion) (USDA, 2025). If President Trump imposes a 25% tariff on imports from Japan and South Korea, U.S. agricultural trade with these countries could face significant challenges. Japan and South Korea are the 3rd and 4th largest markets for U.S. agricultural exports, showing positive growth in recent years. The tariffs could lead to reduced demand for U.S. products, harming American farmers. Additionally, Japan and South Korea might retaliate with their own tariffs on U.S. goods, further exacerbating the situation and disrupting established trade relationships.

Table 1. U.S. Agricultural Exports, Total and Top Destinations: 2024 and 2025 (January – May)

Country	2024	Jan – May 2024	Jan – May 2025	% Change
	$ billion
World (total)	$176.4	$74.2	$72.2	-2.6
Mexico	30.2	12.5	12.3	-1.7
Canada	29.5	12.0	11.6	-3.2
China	24.4	11.1	5.0	-55.0
Japan	11.9	5.5	5.8	6.0
South Korea	8.5	3.8	4.4	15.8
Source: U.S. Department of Agriculture (2025)

For more information:

Bown, C.P. (2025). US-China Trade War Tariffs: An Up-to-Date Chart. Peterson Institute for International Economics. https://www.piie.com/research/piie-charts/2019/us-china-trade-war-tariffs-date-chart

Fortnam, B. (2025). “Trump tells Japan, Korea he’s imposing 25 percent tariffs as of Aug. 1.” Inside U.S. Trade (July 7, 2025) https://insidetrade.com/daily-news/trump-tells-japan-korea-he-s-imposing-25-percent-tariffs-aug-1 (subscription required for access).

U.S. Department of Agriculture (USDA) (2025). Global Agricultural Trade System. Foreign Agricultural Service. https://apps.fas.usda.gov/gats/default.aspx

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Muhammad, Andrew. “U.S. Agriculture Could Face New Challenges with President Trump’s Proposed Tariffs on Japan and South Korea.” Southern Ag Today 5(28.4). July 10, 2025. Permalink