Importance of Agricultural Trade for the US

Market Corner by Luis Ribera, C-FARE Board Member and Professor at Texas A&M University

Trade is very important to production agriculture in the United States. Over the last 12 years, 2011 to 2022, agricultural exports have accounted for over one-third of US gross farm income, 33.9 percent (USDA ERS and FAS). US gross farm income ranged from $399.4 billion in 2016 to $604.1 billion in 2022 while US agricultural exports ranged from $137.2 to $195.9 billion in 2015 and 2022 respectively. Moreover, in terms of volume, US agriculture exports over 20 percent of its production. However, for some commodities that number is considerably higher. In 2021, 83.6 percent of the US cotton crop was exported as well as 64.8 percent of US sorghum crop (Table 1). Soybeans, Wheat, and Rice producers also depend on exports for close to half of their production.

US consumers also benefit from agricultural trade as they have year-round supply of food products that either cannot be produced domestically or are highly seasonal such as fruits and vegetables.  Virtually all limes and bananas consumed in the US are imported and over 95 percent of the coffee consumed is not produced domestically (Table 2).  Orange juice and tomatoes are produced in the US commercially, however, US consumers depend heavily on imports for year- round supply of these products. 

Regardless of where the agricultural products are produced, domestically or overseas, all US consumers benefit.  Table 3 shows the ranking of the top 10 countries in terms of lowest to highest percentage of disposable income spent on food at home. US consumers spend on average 6.7 percent of their disposable income on food which makes it the lowest out of 104 countries where data is available.