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TUESDAY, AUGUST 4, 2026   |   SPECIAL REPORT & ANALYSIS

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Fiscal 2026 Ag Trade Deficit Cut by More Than Half with One Quarter to Go — Falling Imports, Not Booming Exports, Doing the Heavy Lifting

October–June deficit narrows to $15.3 billion from $33.2 billion a year earlier as imports drop 9.9% and exports edge up 0.9%; USDA’s forecast for the full fiscal year is $29 billion.

Analysis  ·  August 4, 2026

Nine months into fiscal 2026, the U.S. agricultural trade deficit has been cut by more than half. Just-released GATS data covering June put October–June agricultural exports at $137.3 billion, up 0.9% from the same period of fiscal 2025, against imports of $152.7 billion, down 9.9%. That leaves the cumulative deficit at $15.3 billion — down 54% from $33.2 billion a year earlier, with one quarter left in the fiscal year that ends Sept. 30. For June alone, exports of $14.9 billion against imports of $17.4 billion left a monthly gap of $2.5 billion.

The export side is essentially flat, and the reason is the fiscal calendar: the October–June window captures the fourth quarter of 2025, when China’s absence crushed the soybean harvest-season program. Soybeans remain the top export at $15.5 billion but are down 19.3% on the fiscal year — even though calendar-2026 shipments are running 33% ahead. Corn is the offsetting muscle at $14.6 billion (up 13.8%), with tree nuts ($10.2 billion, up 19.6%), dairy ($7.7 billion, up 13.3%), soybean meal ($5.2 billion, up 10.4%) and ethanol ($4.1 billion, up 18.4%) all posting solid gains. Beef is down 6.9%, pork and wheat are flat.

The import side is doing nearly all of the work — and the declines are concentrated in tariff-sensitive and price-spiked categories: distilled spirits down 41.6%, raw sugar down 35.0%, avocados down 28.6%, live animals down 26.6% (the screwworm-related cattle stoppage from Mexico), wine down 21.9% and cocoa beans down 20.3%. Unroasted coffee, up 1.8% at $7.5 billion, is the exception among the big-ticket tropicals. The big mover the other way: beef imports surged 22.8% to $12.9 billion — already within about $1 billion of fiscal 2025’s record full-year total — as tight domestic supplies pull in foreign lean beef. More on that below.

Perspective: a deficit narrowing driven mainly by import contraction is not the same as export-led growth — consumers still buy what tropical suppliers ship, and fiscal 2025 imports hit a record $219.2 billion. Nor will the year-to-date pace simply hold: the July–September quarter is seasonally the weakest for exports and heaviest for the deficit, which is why USDA’s May outlook still pegs the full fiscal 2026 gap at $29 billion — down by a third from fiscal 2025’s record, but nearly double the nine-month figure. The August outlook update lands later this month; July trade data are due Sept. 3.

Sources: USDA/FAS GATS BICO reports, June 2026 (released Aug. 4); USDA Outlook for U.S. Agricultural Trade (May 2026).

Ethanol Exports Worth $2.76 Billion Through June — 21% Ahead of Last Year’s Record Pace

Calendar-year export value of $2.76 billion is up 21%; on a fiscal-year basis shipments total $4.07 billion, up 18.4% — with volumes at 1 billion gallons through May, led by Canada and the EU.

U.S. ethanol exports keep rewriting the record book — on both calendars. On a calendar-year basis, GATS data through June show non-beverage ethanol export value of $2.76 billion for the first half of 2026, up 21.0% from $2.28 billion a year earlier and comfortably ahead of the pace that produced calendar 2025’s record $4.74 billion. On a fiscal-year basis, October–June shipments total $4.07 billion, up 18.4% — already 89% of fiscal 2025’s record full-year $4.59 billion with a quarter still to run. Ethanol imports are shrinking on both clocks: down 41% calendar-year, down 50% fiscal-year.

On a volume basis, exports reached the 1-billion-gallon mark through May — 11% ahead of last year’s record pace, per Renewable Fuels Association analysis. May shipments of 189.7 million gallons were up 11% from April, with Canada taking a six-month-high 76.3 million gallons and the European Union 39.1 million, led by the Netherlands; together they accounted for 61% of the month’s shipments. Nigeria, Colombia, Vietnam and the Philippines were active buyers, while Brazil and India — two markets the industry is watching for trade-deal breakthroughs — took essentially nothing. RFA’s June volume detail is expected in its trade monitor in the coming days.

RFA CEO Geoff Cooper notes that 2025’s record 2.2 billion gallons meant one of every eight gallons of U.S. ethanol production went overseas; at the current pace, 2026 exports would approach 2.5 billion gallons — a meaningful demand outlet at a time of thin domestic blending margins.

Table 2. U.S. ethanol-complex trade on calendar- and fiscal-year bases. Source: USDA/FAS GATS, June 2026.

Sources: USDA/FAS GATS BICO reports, June 2026; Renewable Fuels Association trade monitor (July 2026).

DDGS Exports Climb on Both Calendars — Up 20% Calendar-Year, 10% Fiscal-Year — as Feed Buyers Stock Up

Calendar-year export value of $1.55 billion is up 20.5%; on a fiscal-year basis, October–June shipments of $2.24 billion are up 9.9% — with volumes through May up 14% at 5.06 million metric tons, led by Mexico, South Korea and Southeast Asia.

Exports of distillers grains — the ethanol industry’s main coproduct — are running well ahead of last year on both value and volume. GATS data through June put calendar-year export value at $1.55 billion, up 20.5% from $1.29 billion a year earlier; on a fiscal-year basis, October–June shipments total $2.24 billion, up 9.9%, and are on pace to top fiscal 2025’s $2.81 billion. Volumes through May totaled 5.06 million metric tons, a 14% year-over-year increase, with May shipments of 1.08 million metric tons up 6% from April.

Mexico remains the anchor buyer, with South Korea, Indonesia, Vietnam and the European Union rounding out the top tier — together accounting for roughly two-thirds of recent shipments. One market that hasn’t come back: China, which took just $0.7 million of U.S. distillers grains in the first half despite the broader thaw in ag trade. The coproduct story reinforces the ethanol complex’s growing dependence on trade: with U.S. livestock numbers historically tight, foreign feed demand is absorbing supply that domestic rations can’t.

Sources: USDA/FAS GATS BICO reports, June 2026; Renewable Fuels Association trade monitor (July 2026).

Biofuel Feedstock Trade Redrawn: Soybean Oil Exports Collapse 63% as the Domestic Market Claims the Barrel

Soybean oil exports are down 63% calendar-year and 53% fiscal-year; biodiesel imports are up 30% on the calendar clock but down 66% on the fiscal one — and Chinese UCO is down 67% as 45Z reshuffles the feedstock deck.

The clearest biofuel signal in the June GATS data isn’t an export boom — it’s an export collapse, and it shows up on both calendars. U.S. soybean oil exports fell 62.6% on a calendar-year basis, to $336 million from $896 million, and 53.3% on a fiscal-year basis, to $523 million from $1.12 billion, as domestic renewable diesel and biodiesel demand claims the barrel. USDA projects soybean oil use for biofuel climbing from 11.8 billion pounds in 2024/25 to 14.6 billion this year and 17.8 billion in 2026/27 — when it would account for roughly 54% of total U.S. soybean oil consumption. Animal fats exports are down about 12% on both bases, while vegetable oil imports are up 11.2% calendar-year (up 2.9% fiscal-year) at $6.1 billion to backfill food and industrial uses.

The waste-feedstock reroute continues in parallel, driven by tariffs and the 45Z clean fuel production credit’s tilt toward domestic, lower-carbon feedstocks. Used cooking oil imports are running 38% below year-ago levels, with Chinese-origin UCO down 67% — from 1.12 million metric tons to 368,000 — per trade data analyzed by Fastmarkets. Malaysia (up 38%) and Vietnam (up 186%) have filled part of the gap. Tallow imports are flat overall, but Brazil is down 23% while Australia is up 24% and the UK and Ireland are up sharply from small bases.

Biodiesel trade itself remains a shadow of its former self, and here the two calendars diverge sharply. Calendar-year exports of $154 million are down 6.2%, while imports of $63 million are up 30% from a very low base. But on a fiscal-year basis imports are down 65.8% — because the October–December 2024 quarter, when importers rushed product in ahead of the 45Z credit switchover, drops into the prior-year comparison. Both figures compare with well over $1 billion in the mid-2020s peak years. For crushers and soybean growers, the import reroute and the export collapse are the policy working as intended; for renewable diesel producers built around cheap imported waste feedstocks, it’s a margin squeeze.

Table 3. Biofuel-related trade flows on calendar- and fiscal-year bases. Source: USDA/FAS GATS, June 2026.

Sources: USDA/FAS GATS BICO reports, June 2026; Fastmarkets (July 28, 2026); USDA World Agricultural Supply and Demand Estimates.

Beef Trade Flips: Imports Surge 28% to Record Pace While Exports Slip

First-half beef imports hit $9.4 billion against $4.7 billion in exports; pork exports edge up 2.5% despite Mexico’s variety-meat restrictions.

The cattle cycle is writing itself into the trade data. With U.S. beef production tight and cattle prices at records, first-half beef imports jumped 28.3% to $9.4 billion — on pace to shatter last year’s record $14.3 billion calendar-year total — while beef exports slipped 3.7% to $4.7 billion. The U.S. is now importing roughly two dollars of beef for every dollar it exports, a dramatic reversal from the near balance of just three years ago. Live animal imports, by contrast, fell 23.4%, reflecting the screwworm-related closure of the border to Mexican feeder cattle.

Export unit values are holding up even as volumes shrink: May beef exports of 91,925 metric tons were down 5% from a year earlier, but value rose 2% to $818 million, and export value per head of fed slaughter hit $468 — the highest in nearly four years, per the U.S. Meat Export Federation. The missing piece remains China, where first-half beef sales collapsed 94% to just $29 million pending resolution of plant-registration issues.

Pork is the steadier story: first-half exports rose 2.5% to $4.2 billion. May volume of 245,874 metric tons was up 10% year-over-year despite Mexico’s pseudorabies-related restrictions cutting variety meat shipments there by 80%; Japan took its largest volume since 2021, and Colombia and Central America posted standout results.

Sources: USDA/FAS GATS BICO reports, June 2026; U.S. Meat Export Federation (July 2026).

China’s Comeback Runs on Two Calendars: First-Half Sales Nearly Match All of 2025, but the Soybean Marketing Year Shows the Scar

On the calendar-year basis that governs Beijing’s three-year, $17 billion-a-year purchase pledge (2026 prorated), first-half ag sales are up 48% at $8.2 billion; on the September–August marketing-year clock that frames the soybean trade, shipments are down 47%.

Which China story you tell depends on which calendar you use. On a calendar-year basis — the clock that governs Beijing’s pledge, announced May 17, to buy at least $17 billion annually in additional U.S. agricultural products in 2026 (prorated for the partial year), 2027 and 2028, separate from the soybean commitments made in late 2025 — exports to China reached $8.2 billion in the first half of 2026, up 48.4% from a year earlier and within a rounding error of the $8.3 billion China took in all of calendar 2025. Because the 2026 target is prorated from mid-May and excludes the separately pledged soybeans, first-half shipments can’t be scored directly against the full $17 billion; the harvest-quarter surge will be the first real test of the pledge. Calendar-year soybeans tell the recovery story: $4.8 billion and 10.8 million metric tons through June, up 94% and 82% respectively from a year earlier, while sorghum-led coarse grain sales exploded to $831 million from just $24 million, wheat returned, cotton rose 20.5% and tree nuts doubled.

The soybean pledge is a separate category entirely: the commitments announced in late 2025 call for purchases of 25 million metric tons a year, and the soybean trade is scored on the September–August marketing-year clock — which tells a harsher story. GATS monthly data show marketing-year 2025/26 shipments to China of just 12.0 million metric tons worth $5.3 billion through June, down 47% by volume from 22.7 million tons worth $9.9 billion at the same point of 2024/25 — and less than half the 25-million-ton benchmark with only the slow summer shipping months left before the marketing year closes Aug. 31. The hole was dug in the fall: China took essentially zero U.S. soybeans from June through October 2025, and the marketing year didn’t record its first meaningful cargoes until December. That makes this fall’s new-crop buying — the opening of marketing-year 2026/27 — the real proving ground for the tonnage pledge.

The recovery is also uneven across products: beef sales collapsed 94% to $29 million on unresolved plant registrations, pork was flat, and corn remains essentially absent. And the total is still less than half the pace of the peak years — China took roughly $38 billion of U.S. ag products in calendar 2022. Perspective for the fall: the fourth quarter is where both categories converge. New-crop soybean buying at harvest starts the clock on the 25-million-ton marketing-year 2026/27 pledge, while non-soybean purchases over the balance of the year provide the first read on the prorated 2026 installment of the separate $17 billion commitment — and the harvest window is exactly where China walked away a year ago.

Table 1. U.S. soybean exports to China, calendar-year vs. marketing-year basis. The late-2025 soybean pledge (25 MMT/yr) is separate from the $17 billion annual commitment for 2026 (prorated), 2027 and 2028. Source: USDA/FAS GATS, June 2026.

Sources: USDA/FAS GATS BICO reports and standard query, June 2026; White House fact sheet (May 17, 2026) via American Farm Bureau Federation and High Plains Journal; NDSU Agricultural Trade Monitor (May 2026).

Editor’s note: The lead trade article is on a fiscal-year basis (October 2025–June 2026, vs. the same nine months a year earlier); the China article shows both calendar-year and September–August marketing-year figures; the ethanol, distillers grains and biofuel-feedstock articles show both calendar-year (January–June) and fiscal-year (October–June) figures; the remaining articles use calendar-year-to-date values. All figures are nominal dollars from GATS, released Aug. 4, 2026. Volume detail for June (gallons, tonnes) follows in RFA and USMEF monthly reports. July trade data will be released Sept. 3, 2026.

AG POLICY & MARKETS DAILY   |   SPECIAL REPORT  |  AG TRADE & BIOFUELS — TUESDAY, AUGUST 4, 2026