With so much news coverage, most consumers do not realize that U.S. agriculture has reached a “turning point” in its history. No, we are not talking about production volumes or prices. We're talking about a record agricultural trade deficit in just the last 10 years.
Simply put, this means that the United States buys more agricultural goods such as fruits, vegetables, meat and fish from other countries than it exports.
The numbers speak for themselves. As recently as 2014, the United States maintained an agricultural trade surplus of nearly $35 billion, according to the USDA. However, by 2019, the United States was facing an agricultural trade deficit. In 2023, that deficit grew to more than $21 billion. And in 2024, the United States reached a $37.6 billion agricultural trade deficit, the largest in the country's history.
In an article about this unexpected deck of cards, Andrew Rechenberg, senior economist at the Coalition for a Prosperous America, describes it this way: The U.S. agricultural trade balance has gone completely negative.
And now this. . .
On August 29, the US government ended the so-called de minimus exception. Now every batch, regardless of size or origin, will be subject to full FDA inspection.
Prior to this change, shipments valued under $800 could clear U.S. Customs duty-free and tax-free with minimal paperwork. Overall, this exemption amounted to nearly 1.4 billion packages entering the United States duty-free each day.
The liberation allowed for the daily supply of food and groceries from abroad, as well as huge quantities of nutritional supplements and hundreds of shipments of sweets and baked goods. However, the bulk of supplies are made up of goods such as clothing, shoes and small electronics.
“But the loophole is now closed,” said David Lennartz, president Registrar Corporation.
When it comes to food in general, food items that were previously exempt are likely to cost more due to the additional costs of importing them into the United States.
According to Registrar Corp., the elimination of this exemption, coupled with sweeping tariff changes, would create significant challenges for the food industry.
“The real question will be whether consumers will get to the checkout and ask themselves if the extra cost of olive oil from a small farm in Italy is worth it,” Lennartz said. “Or whether the consumer decides to look for another product.”
What about food safety?
As for whether previously exempt products will be safer now that the exemption has ended, Lennartz said it will be difficult to say because there is not yet enough data to compare the two products. But he also said FDA teams will be on the ground and at ports of entry. Despite this, he said it is still a question whether the agency will have the funds needed to do so given the agency's current funding cuts.
“Obviously the FDA will be paying more attention to food,” he said. “And companies will have to make sure that they comply with food safety regulations. We'll see how things go once we have more statistics on this. We'll definitely see a huge increase in volumes coming into this country.”
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