USDA Lifts 2026 Ag Export Outlook but Offers Little New Analysis
China, South Korea, and EU Forecasts Shift as Report Again Lacks Narrative Context
USDA modestly raised its outlook for U.S. agricultural exports in fiscal year (FY) 2026 in its December 2025 Outlook for U.S. Agricultural Trade, while trimming the projected trade deficit. However, as in several recent editions, the report again provides virtually no narrative commentary or analytical discussion, relying almost entirely on tables and forecasts rather than explaining the drivers behind revisions or how assumptions differ from prior years.
Headline Revisions from August
USDA now forecasts FY 2026 agricultural exports at $173.0 billion, up from $169.0 billion in the August outlook.
Imports are projected at $210.0 billion, down slightly from August, narrowing the agricultural trade deficit to $37.0 billion, compared with $41.5 billion previously.
Of note: While the topline changes are modest, the regional reallocations beneath the surface — particularly involving China, South Korea, and the European Union — are more notable.
China: Upward Revision, Still Structurally Lower
USDA raised its FY 2026 export forecast to China to $12.0 billion, compared with $9.0 billion in August. The increase reflects stronger expected shipments of corn, soybean meal, and pork as China’s feed demand stabilizes and domestic production constraints persist.
Even so, the report offers no discussion of policy factors, stock levels, or import behavior changes that would justify the revision. China’s forecast remains far below historical highs, underscoring that USDA still views Chinese demand as structurally weaker rather than temporarily depressed.
South Korea: Incremental Strength Without Explanation
Exports to South Korea are now projected at $9.8 billion, slightly higher than the $9.6 billion forecast in August. The increase likely reflects steady demand for U.S. beef, pork, and feed grains, but again, the report provides no explicit rationale for the adjustment.
South Korea continues to stand out as a relatively stable, high-value market at a time when other developed economies show softer growth.
European Union: Downward Adjustment
In contrast, USDA trimmed its FY 2026 export forecast to the EU-27 to $14.1 billion, down from $14.9 billion in August. Slower economic growth, currency effects, and competition from EU suppliers are likely factors, but none are discussed directly in the report.
The EU remains an important destination for U.S. soy products, tree nuts, and ethanol, yet the absence of commentary leaves readers to infer why USDA sees weaker momentum.
Broader Regional Shifts
• Asia overall was revised higher from August, reflecting stronger China and Southeast Asia assumptions.
• Western Hemisphere exports, particularly to Mexico and Central America, remain broadly stable versus August, continuing to anchor U.S. export volumes.
• Africa and the Middle East saw modest upward adjustments, largely tied to grain demand and food security imports.
A Continuing Pattern of Minimal Analysis
As in recent years, the December report largely recycles the same table-driven structure with updated numbers but offers no forward-looking narrative, policy context, or market interpretation. Unlike earlier editions of the Outlook for U.S. Agricultural Trade — which routinely included written analysis explaining macroeconomic assumptions, trade policy risks, and commodity-specific dynamics — the current report leaves those connections implicit.
Analysis: USDA’s December outlook does not signal a breakout year for U.S. agricultural trade, but it does show incremental improvement from August, driven by selective gains in Asia — especially China and South Korea — while Europe softens slightly. For producers and traders, the update reinforces a theme likely to persist into 2026: export growth will depend less on a single dominant buyer and more on diversified, region-specific demand gains. But for producers, traders, and policymakers, the continued lack of commentary means the report functions more as a statistical update than an analytical outlook, requiring readers to supply much of the interpretation themselves.
