(March 3) WASHINGTON, D.C. — Despite expected gains in exports, the slippery slope of trade deficits will grow significantly steeper for fresh fruits and vegetables in the next decade, according to projections from the U.S. Department of Agriculture.

Contrasting trends of a widening U.S. agricultural trade surplus and an expanding trade deficit for fresh fruits and vegetables were evident when the USDA released long-term estimates of agricultural trade at the Feb. 20-21 Agricultural Outlook conference.

Despite an expected surge in overall U.S. agricultural export performance, U.S. trade deficits for fresh fruits and vegetables will widen by more than 50% in the next decade, according to USDA projections.

Agriculture Secretary Ann Veneman said trade agreements could improve the trade outlook. She noted U.S. exports to its North American Free Trade Agreement partners have grown 76% during the past 10 years, while exports to the rest of the world grew just 12%. World Trade Organization negotiations were at a critical juncture in February, and she noted talks were under way for the Free Trade Area of the Americas and other bilateral agreements.

In its baseline projections, the USDA reported total U.S. agricultural export value will grow at an average annual rate of 3.6%, from about $53 billion in 2002 to $76 billion in 2012.

Total value of imports of agricultural goods are projected to increase from $44.9 billion in 2002 to $54.8 billion in 2012, an average annual growth rate of 2.2%. The net effect will widen the overall U.S. agricultural surplus from $12.3 billion in 2002 to $21.2 billion in 2012.

The story is somewhat different for produce.

U.S. exports of fresh fruit are projected to rise from $2.09 billion in 2002 to $2.64 billion by 2012, a gain of 26%.

Imports of fresh fruit are expected to rise 37% in 10 years, from $3.48 billion in 2002 to $4.78 billion in 2012.

That means the fruit trade deficit is expected to grow from $1.39 billion to $2.14 billion by 2012, a gain of 54%.

In fact, 2003 estimates for long-term trade were less optimistic than last year’s USDA baseline projections. The fresh fruit trade deficit in 2008 was projected last year at $1.65 billion, while this year’s estimate of the fruit deficit in 2008 is $1.84 billion.

The balance of trade in vegetables also will continue to swing toward imports. The USDA projects growth in U.S. vegetable exports from $1.12 billion in 2002 to $1.51 billion in 2012 — a gain of 35%.

On the other hand, U.S. imports of fresh vegetables are expected to rise 47% in 10 years, from $2.35 billion in 2002 to $3.47 billion in 2012.

The resulting trade deficit in fresh vegetables will be stretched from $1.23 billion in 2002 to $1.96 billion in 2002, which translates to a 59% increase.

The USDA’s trade deficit projections for fresh vegetables also widened this year compared to last year. The agency’s estimate last year for the fresh vegetable trade deficit in 2008 was $1.59 billion. That compares with this year’s baseline data, which projects a fresh vegetable deficit of $2.03 billion by 2008.

Stabilizing economy: Other USDA projections released at the conference include:

  • The U.S. economy will stabilize and show a long-term growth rate of 3% in the next 10 years. The U.S. dollar will continue strong.


  • Developing countries’ econo-mies are expected to grow at a 4.5% average annual rate in 2003, increasing to an average of 5.2% from 2006-12.


  • Economic prosperity for Russia and eastern Europe is projected to increase at a 4% annual clip, which is a much better performance than during the recessions those economies faced in the 1990s.


  • Japan’s economy will continue to struggle, and the USDA predicts the country’s share of the world gross domestic product is expected to decline to 12% by 2012, down from 18% in 1991.


  • World population growth will decline from an annual rate of 1.7% in the 1980s to 1% per year by 2012.


  • Food price inflation is expected to be less than overall consumer inflation in the U.S.


  • Oil prices will rise only slightly faster than the general inflation rate in the next 10 years.